Council offers tax incentives for two facilities

The Oklahoma City Council voted Tuesday to offer tax incentives to General Electric and Baker Hughes for new facilities expected to create hundreds of high-paying jobs. Baker Hughes will receive $850,000 and General Electric will receive $1 million, assuming each company meets job creation expectations.

The council voted unanimously to approve the incentives, but Ward 2 Councilman Ed Shadid questioned the need for tax breaks to lure large corporations.

“I don’t believe that if we vote no they are not going to come,” Shadid said. “If you are going to give incentives, it’s a state responsibility. We have no idea where these [new] employees will live.”

General Electric announced last year that it planned to build a new global research center northeast of downtown that would create 133 jobs with an average salary of $129,800. The council approved an incentive of $1 million to GE and another $750,000 for site clearance and public improvements.

Shadid said he had previously met with GE officials and did not believe the tax incentive was necessary to attract the new research center.

“We met with the GE representative, and he gave us 10 to 15 great reasons why they would be in Oklahoma City,” Shadid said. “This [tax incentive] was not one.”

Ward 8 Councilman Patrick Ryan disputed Shadid’s claim and said he did not know whether or not a tax incentive was necessary.

The incentives are offered through the Oklahoma City Strategic Investment Program (SIP), which attempts to fund the creation of quality jobs. Incentives are disbursed according to a performance schedule and are not issued if job creation thresholds are not met.

Oklahoma City has worked with 25 projects through the SIP program and not one has received the full amount of promised funds due to not meeting specific criteria. SIP is funded through bonds approved by voters in 2007, and the city council is tasked with approving each project.

Brent Bryant, the economic development program manager for Oklahoma City, said each proposed project is weighted through a formula that predicts how much tax revenue each job might bring. The program also puts the city on par with other states and cities running similar programs.

“Incentives are one piece of the puzzle,” Bryant said. “How big a piece? It’s not always easy to tell.”
Oklahoma City has issued over $9 million in payments through SIP as of February, which includes payments to Chesapeake Energy and Boeing.

Ben Felder

Ben is an urban affairs reporter covering local government and education in Oklahoma City. He lives in OKC with his wife, Lori, and son, Satchel. Ben holds a masters in new media journalism from Full Sail University and is an OKC transplant from Kansas City, Mo. Twitter: @benfelder_okg

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