With Fallin’s signature, aerospace engineer credit will be restored on July 1
Published: April 4th, 2011
Today (Monday, April 4), Oklahoma Governor Mary Fallin signed legislation that will, effective July 1, remove an aerospace industry credit from a list of tax credits put on “moratorium” last year.
Fallin’s signature brings to completion a project that got a fast start early in the legislative session, when the Senate Finance Committee moved to end a moratorium on aerospace industry incentives.
Enthusiasts for House Bill 1008, by Rep. Skye McNiel of Bristow and Sen. Mike Mazzei of Tulsa, say the measure will help grow the aerospace industry in Oklahoma and create jobs. At a time when many tax credits and business incentives are under critical scrutiny, the legislation received bipartisan support in both the House and Senate as it moved through the process.
“Restoring this credit will help grow our state’s economy and bring more high-paying jobs to Oklahoma,” said State Chamber President Fred Morgan.
Morgan and other Chamber leaders contend these credits are “proven job-creators,” as they can only be claimed after companies have hired new aerospace engineers. New jobs are a requirement to claim the credit.
The credits were fashioned in legislation passed in 2008. The aim is to help encourage Oklahoma companies to hire aerospace engineers and also incentivize engineers to move here from other states. The credits allow engineers to receive some tuition reimbursement if they come to work for a company in Oklahoma within one year of graduation. The law also grants a tax credit to an aerospace company for compensation paid to a qualified employee.
In 2009, the only year the tax credits were fully in place, 348 new engineers were hired. The fiscal impact of the credits to the state was $3.5 million that year, but the direct economic impact to Oklahoma resulting from the hiring of the high-paid engineers was estimated to be over $270 million, according to analysis from the Chamber.
During the 2010 legislative session, aerospace incentives were included with nearly 30 others that were put on a two-year moratorium to help balance the state budget. The job-creating incentives will now be restored as of July 1.
The measure cleared the Senate, where Mazzei had sponsored S.B. 3 (essentially the same proposal) 41-6. In a statement sent to CapitolBeatOK last week, Sen. Mazzei said, “When we placed this credit, along with 30 others on hold because of the recession, we said we would revisit the issue and restore those that have been proven to create jobs.
“We know for a fact that this one has already brought engineering positions to the state, and is responsible for 550 additional aerospace jobs that Boeing has already announced.”
Mazzei continued, “These are some of the highest paying jobs we can bring to Oklahoma, and as a result, it will help us increase our tax base and fuel additional growth throughout the private sector. It is an investment with enormous return for our state.”
In her statement provided to CapitolBeatOK, McNiel said, “These aerospace incentives have been effective in the past in creating jobs in our state, and I am confident they will again once they are removed from the moratorium list. In this economic environment, we must do all we can to incentivize investment and growth, especially in high-paying sectors like aerospace.”
NOTE: Editor Patrick B. McGuigan contributed to this report.