The Business Of Attracting Business
Attracting aviation/aerospace businesses and the highly skilled workforce needed to operate them is an ongoing concern of many state business drivers, including the Oklahoma Department of Commerce. To that end, the Aerospace Industry Engineer Workforce Tax Credit was reinstated as one of Gov. Mary Fallin’s first actions in office.
“With the tax credit, an engineer hired in aerospace is qualified to get up to $5,000 (in individual) tax credit annually for five years, as does their employer,” says Bird.
Employers can receive a tax credit of 10 percent of an eligible employees’ compensation for the first five years of employment if that individual holds a degree from an Oklahoma college. The credit goes to five percent for employees who graduated from an out-of-state school. The employer can receive up to $12,500 per year for each employee.
Bird notes that this tax credit also applies to experienced engineers moving into the state and not only to new graduates.
“The older engineers that helped us win the Cold War are retiring in droves,” says Bird. “So we need to get older, skilled and experienced engineers as well as new ones just out of school.”
Another state incentive, 21st Century Quality Jobs, was created to attract growth industries and sectors to the state through a policy of rewarding businesses with a highly skilled, knowledge-based workforce, says Donald R. Hackler Jr., deputy director-legal/public relations officer for the Oklahoma Department of Commerce. The program is based on the Quality Jobs Program developed in 1993.
“Qualifying companies may be eligible for up to twice the net benefit rate of the Quality Jobs program, or 10 percent of the taxable payroll of these new jobs, to be paid in cash on a quarterly basis,” Hackler says.
Ten percent of the state’s economic output comes from aerospace/aviation jobs, says Bird. One out of every 11 jobs in this industry has an average salary of $60,000 a year, almost double the annual average in the state of $33,000.
One Oklahoma success story is Pro-Fab, an Oklahoma City firm with about 175 employees with contracts working for the U.S. Department of Defense on the F-35 Joint Strike Fighter. Pro-Fab and other aviation firms need a highly educated, highly skilled workforce.
“We have to have engineering talent,” Bird says. “That is why we passed the tax credit. Boeing moved workforce from Long Beach to here, and we’re so glad they did because of the economic impact of engineers. In this case, 340 engineers were hired, and it cost the state $3.3 million in tax credit. But with an economic impact of $270 million, that was a very good investment. Engineering is at the core of any aviation/aerospace success. The industry also needs skilled, well-paid workers like technicians and machinists to keep the industry viable.”
ASCO Industries, headquartered in Zaventem, Belgium, took over the former Mercury Marine facility in Stillwater to manufacture components for commercial firms, including Boeing and Lockheed. Bird says this is due to Fallin’s annual trips to the Paris Air Show to tout the state’s aerospace acumen. Now, ASCO boosts Oklahoma’s economy by employing about 400 workers.
MRO work requires skilled, educated workers. Bird credits the state’s education system, especially universities, CareerTech and Spartan, for producing a skilled workforce. However, more are needed if future needs are to be met.
“We’re not like the energy industry, as aviation/aerospace doesn’t put out a lot of commercials or public awareness for this [educational] need,” Bird says. “We do have this favorable business climate going for us, though. More than 20 states have tried to copy our aviation incentives, such as our tax credits, but they just don’t quite match up to Oklahoma.”