MuskogeePhoenix.com, Muskogee, OK

Oklahoma News

September 29, 2013

Quality Jobs Program pays companies despite layoffs

OKLAHOMA CITY (AP) — An Oklahoma program intended to attract jobs through incentive payments to companies has continued making the payments to some recipients even though they’ve laid off hundreds of workers.

The Quality Jobs Program enrolls companies that agree to create a minimum of $2.5 million in new payroll within three years and meet minimum wage and benefit requirements. If they maintain a minimum number of employees, there are no consequences for layoffs.

The companies receive up to a 5 percent rebate on payroll taxes for up to 10 years in exchange for creating new jobs in Oklahoma.

The law, adopted in 1993, has no “clawback” provision to require companies to repay the money if they lay off workers, go out of business or move out of state.

The Oklahoman reported that Oklahoma City-based Chesapeake Energy Corp. has received $8.27 million in incentives in 2013. The company said it laid off 86 workers last week, after eliminating an undisclosed number of employees earlier in September. More layoffs are expected at Chesapeake.

The company declined comment.

SandRidge Energy Inc. has accepted $2.48 million in 2013. In January, the company laid off an undisclosed number of workers in Oklahoma City. Houston-based Halliburton Co. has received $1.29 million through August despite laying off 130 workers in Duncan.

SandRidge exited Quality Jobs in the first quarter of 2013, after reaching the maximum dollar amount it could receive from the program.

“Quality Jobs establishes a baseline for companies upon entering the program,” SandRidge spokeswoman Leslie Weiher said in a statement. “Benefits are based on payroll only for jobs created above baseline employment on or after the projected start date for the duration of the agreement.”

Halliburton remains eligible because it keeps a presence in Oklahoma above the baseline of 2,666 jobs outlined in its Quality Jobs deal with the state.

“The program pays companies based on employee number increases above that base number each quarter,” company spokeswoman Susie McMichael said. “If the number falls to the baseline or lower, we get no payment.”

Oklahoma House Speaker T.W. Shannon, R-Lawton, calls the program a success in attracting and keeping companies and jobs in the state.

“The Quality Jobs Program is a good program because it works. It’s not a giveaway because a company only gets rebated a portion of what they pay,” Shannon said.

But Rep. Mike Reynolds, R-Oklahoma City, a longtime critic of the program, said many companies that receive the incentive payments would expand or start operations in Oklahoma even without it.

“The problem with the Quality Jobs Program is that companies do not hire people based on tax incentives,” Reynolds said. “It’s an artificial incentive to hire somebody, and all it does is helps the taxpayers of Oklahoma pay for the salaries of those workers.”

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