The Tulsa World reported last Friday morning that Tulsa may attempt to lure Boeing to locate its 7E7 final assembly plant in Tulsa. There is speculation that incentive packages for Boeing and American Airlines could be a major component of the "Vision" package to be put before Tulsa County voters this fall.
A story in the San Bernadino Sun reports that the legislature of State of Washington voted to authorize $3 billion in incentives to keep Boeing's new facility in state. Tulsa County sales tax revenues amount to about $70 million per year per penny of tax, so I assume that if Tulsa is to compete at this level, we'll need the state government to help. It remains to be seen whether the state government can get its act together to help, with our governor MIA and our de facto ruler in rehab.
Meanwhile, in Indianapolis, United Airlines' maintenance hub has closed after 10 years. Indy used $300 million in incentives to woo UAL, beating out OKC in the process. Indianapolis did have the sense to get UAL to sign a "pre-nup" of sorts, with UAL agreeing to pay penalties if they failed to live up to their promises of jobs and investments. UAL never provided more than 3000 of the 7000 jobs promised, but they aren't in a position to pay penalties, and now Indianapolis is asking a bankruptcy judge for the $117 million UAL owes. I expect the judge's ruling will be, "Get in line, pal."
The Wichita Eagle has a good analysis piece looking at the competition for the Boeing facility and recounting some of the hazards in this approach to economic development.
Will Tulsa's leadership fall in this pit just as other cities are wising up?
Another World story reported that Tulsa continues to suffer a huge year-over-year job decline -- at 4.5% (18,300 jobs), it's second only to San Jose of all the metro areas in the country. I suspect that a large number of these lost jobs were from our high-tech companies, or the secondary economic impact of high-tech layoffs. More manufacturing jobs would be great, but we really need act now to retain our high-tech knowledge workers before they all move to Texas to find jobs.
I keep thinking back to Joel Kotkin's speech in Tulsa last May, and the importance of attracting and retaining "knowledge workers". (Here's what he wrote in the Wall Street Journal, and a Tulsa World column about his visit.) The Boeing and American initiatives represent skilled manufacturing jobs. It's important that we have those kinds of jobs, but such jobs do not help the high-tech knowledge workers who lost their jobs at WorldCom and Williams and who are now crossing the Red River in search of work. More blue-collar jobs will help local service businesses and retail, but will not generate the high-tech jobs we need for Tulsa's future.
Instead of dumping a pot of money in some company's lap, let the Legislature reconvene and reform the laws that interfere with capital formation and deter entrepreneurs. It's about time we made Oklahoma friendly to wealth creation and investment.
