Despite Michelin, state remains attractive to business

Ray Carter | November 1, 2023

The announcement that Michelin North America will cease tire production at its Ardmore facility, eliminating roughly 1,400 jobs, is a harsh shock for that community. But it is not a signal that businesses generally view Oklahoma negatively, state officials told lawmakers on Tuesday.

“We have, at any given month, 95 to 100 open projects on my desk right now,” said Lt. Gov. Matt Pinnell, who works closely with the Oklahoma Department of Commerce in his capacity as Secretary of Workforce and Economic Development for Gov. Kevin Stitt. “So these are 95 to 100 different companies. Some of them in the state of Oklahoma that want to grow, most of them outside the state or outside the country looking to re-shore operations. Those are companies that have come to us.”

Pinnell and other officials discussed the Michelin closure and Oklahoma’s status as an attractive place to do business during a meeting of the state Senate Select Committee on Business Retention and Economic Development.

The committee was formed this year and has held sporadic meetings since March to consider how to improve business growth in Oklahoma.

Bill Murphy, president of the Ardmore Development Authority, told lawmakers it appears there is little that state or local officials could have done to alter Michelin’s decision to close the Ardmore plant.

“The case of Michelin, certainly as a global company, sometimes the best efforts can’t prevent decisions of a corporate, private-sector entity from closing a facility,” Murphy said.

But Pinnell said Oklahoma continues to receive strong interest from other businesses, including both those looking to relocate or open new facilities and those already in Oklahoma looking to expand.

“We’re going to get phone calls because Oklahoma, truly, today is a very appealing state for a lot of deal flow,” Pinnell said. “You talk to Department of Commerce employees that have been there multiple decades, they haven’t seen an environment like this.”

Pinnell acknowledged that efforts to attract huge new businesses to Oklahoma in recent years have received “the above-the-fold headlines,” but said that 70 percent of Oklahoma Department of Commerce staff time “is spent on existing businesses in Oklahoma.”

Rather than focus on making Oklahoma a better place for all to invest and work, officials at the Oklahoma Capitol have focused much effort in the past two years on luring mega-plants with corporate-welfare-style programs.

Lawmakers have put aside $698 million to lure just two companies, both believed to be green-energy businesses, to Oklahoma. Neither company has yet indicated they will come to the state.

Some lawmakers have even cited a desire to preserve that $698 million for business subsidies as a reason to avoid broad-based tax cuts in Oklahoma.

But officials with the Oklahoma Department of Commerce previously told members of the Senate Select Committee on Business Retention and Economic Development that most of Oklahoma’s job growth comes from existing companies, particularly small businesses.

State Sen. Jerry Alvord, R-Ardmore, said lawmakers should focus more on support of the state’s existing businesses.

“We’ve spent concerns and time fishing for the big industry coming in,” Alvord said. “And I think one of the things we kind of need to look at is feeding the ones we have, creating big fish, and attracting big fish in that fashion. Because if we strengthen and bolster the ones that exist that will attract the ones that need somewhere to go.”

Lawmakers did not discuss the role that state tax policy plays in allowing existing businesses to grow and attracting new businesses to Oklahoma.

Gov. Kevin Stitt has called for reducing Oklahoma’s personal income tax from the current 4.75-percent rate to 4.5 percent, and also wants to put the state on the path to full elimination of the personal income tax.

Although Oklahoma has become a destination state for many workers leaving high-tax states, with net positive migration, states with no personal income tax have generally boomed at an even faster rate.

Both proposals enjoy strong voter support in Oklahoma. A survey conducted by WPA Intelligence (WPAi) on behalf of the Oklahoma Council of Public Affairs (OCPA) and Americans for Prosperity (AFP) showed that 65 percent of Oklahoma voters support cutting the state income tax, while only 22 percent oppose income-tax cuts. The survey also found that 67 percent of voters support full elimination of Oklahoma’s income tax.

Lawmakers convened Oct. 3 in a special session called by Stitt to address tax policy, and House Speaker Charles McCall, R-Atoka, said House Republicans were prepared to advance tax cuts. But members of the Senate instead voted to adjourn the session the same day, killing any chance for further discussion and debate on tax policy.

Pinnell told lawmakers the proper policy choices can keep Oklahoma on a path of stronger economic growth and job creation.

“If we address issues when it comes to retaining Oklahomans and making Oklahoma the most business-friendly state in the country—with the brand of the best state to live, work and raise a family—then we’re all, Republican, Democrat and independent alike, going to get what we want as a state,” Pinnell said. “And that’s to be a state that’s growing and not losing citizens.”

Ray Carter Director, Center for Independent Journalism

Ray Carter

Director, Center for Independent Journalism

Ray Carter is the director of OCPA’s Center for Independent Journalism. He has two decades of experience in journalism and communications. He previously served as senior Capitol reporter for The Journal Record, media director for the Oklahoma House of Representatives, and chief editorial writer at The Oklahoman. As a reporter for The Journal Record, Carter received 12 Carl Rogan Awards in four years—including awards for investigative reporting, general news reporting, feature writing, spot news reporting, business reporting, and sports reporting. While at The Oklahoman, he was the recipient of several awards, including first place in the editorial writing category of the Associated Press/Oklahoma News Executives Carl Rogan Memorial News Excellence Competition for an editorial on the history of racism in the Oklahoma legislature.

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