After record cash infusion, $14M sought for Gov. Stitt's economic development fund
The Oklahoma Department of Commerce seeks additional money for an economic development fund dedicated to attracting businesses and jobs to the state.
The department is requesting state legislators appropriate $14 million next year to the Quick Action Closing Fund — a pot of money Oklahoma’s governor can use to cover infrastructure and development costs for businesses relocating to the state.
The request comes after the Legislature appropriated more money for the fund this year than ever before.
At Gov. Kevin Stitt’s behest, legislators appropriated $14 million to the fund this year on top of a $5 million supplemental appropriation approved in March.
“Cumulatively, that was more than we had put in there since the foundation of the program,” said Brent Kisling, the department’s executive director. “We’re just asking that we maintain that baseline of $14 million for another year so we can see that growth.”
In 2019, legislators appropriated $4 million to the fund, the most up to that point with the exception of the initial $6.7 million cash infusion in 2012.
Kisling, who was appointed by Stitt, recently updated state legislators on the status of the fund as he outlined the agency’s budget request for the fiscal year that starts July 1, 2020.
About $14 million in closing funds have been committed to companies that have committed or will invest $3.4 billion into Oklahoma, according to Commerce Department data. Nearly $10 million in closing funds have been paid out to companies that invested $712 million in the state.
Roughly $8 million remains in the fund, Kisling said.
After the Legislature created the closing fund in 2011, the economic development incentive tool was used sporadically. But Stitt made boosting funding to attract businesses to Oklahoma a top priority last year and hopes to do the same next year.
In the process of crafting his executive budget, Stitt said he's looking over all the budget proposals from state agencies. The closing fund dollars are on a list of priorities, now it's just a matter of seeing if there are enough state dollars to fund the request, Stitt said.
"Job creation, the economy, making sure we're a business-friendly state are high on my priority list," he said.
Legislators created the fund when they realized Oklahoma had to compete against neighboring states, like Texas and Arkansas, that could offer millions of dollars in incentives from their closing funds to lure companies and new jobs.
Before granting any funds, the Department of Commerce conducts an economic analysis to determine the state’s return on investment. The analysis looks at how many jobs will be created, the salaries for those jobs and the resulting tax revenue from the company either locating or expanding in Oklahoma. the amount of closing funds granted to a company can vary based on those factors.
“Every time we write a check through our incentive programs … it has to be a net benefit to the state,” Kisling told legislators. “We’re not going to write them a check that’s bigger than the check they’re going to write back to us in taxes."
Closing fund incentive deals include claw-back provisions for the state to recover its money if a company does not meet certain capital investment or job benchmarks within a specified time frame.
General Electric, which received $3 million to help construct an Oklahoma City facility, and Commercial Metals Company, which built a facility in Durant, have received the largest payouts from the fund.