Imagine a place rich in aerospace tradition that also boasts one of the lowest costs of business anywhere in the United States. That place is Oklahoma, where low costs in virtually every area of measurement combine with a high quality workforce, superior incentives, and a pro-business attitude. Oklahoma, in fact, ranks fifth lowest among all states for total cost of doing business. While the state's major metropolitan areas represent great location opportunities for aerospace companies, our state's extensive aerospace operations mean there are numerous smaller communities that also offer aerospace infrastructure, training, and facilities.
Low Cost Metro Areas Simply put, the cost of business in Oklahoma's two large metropolitan areas, Tulsa and Oklahoma City, are almost impossible to beat. Tulsa, where two major aerospace clusters already are located, ranks third and Oklahoma City fourth among metropolitan cities for lowest Cost of Doing Business for 2004 according to Forbes magazine.
Oklahoma labor costs run well below the national average.
Oklahoma offers abundant local access to reliable and affordable energy sources.
Oklahoma has one of the lowest per capita tax rates in the nation.
Pollina Corporate Real Estate in its 2006 report ranks Oklahoma as one of America's Top 15 Pro-Business states. Oklahoma's low cost of business already has attracted numerous companies to the state and more are on the way every day.
Labor
With a trained, experienced and plentiful labor force, Oklahoma offers aerospace firms a distinct advantage when it comes to labor costs compared to other states. Take the median base salary for the following key aerospace occupations: Electronics Assembler, Aircraft Mechanic and Engineering Technicians.
Median Base Salaries:
Job/City
OK
TX
WA
AL
FL
GA
NC
CA
Aerospace Engineers
$73,290
$71,000
$80,600
$84,870
$73,230
$73,600
$77,870
$88,050
Avionics Technicians
$47,660
$42,000
$49,000
$35,440
$44,740
$43,480
$41,270
$50,590
Aircraft Mechanics
$42,630
$44,080
$48,710
$34,190
$43,650
$56,810
$43,130
$52,140
Engineering Technicians
$48,160
$52,040
N/A
$62,130
$49,940
$54,850
$54,600
$59,310
Engineering Technicians, all other
$49,860
$48,460
$56,890
$49,850
$46,100
$47,690
N/A
$49,860
Machinists
$31,610
$31,120
$38,850
$32,070
$31,200
$34,540
$31,890
$36,220
Electricians, all types
$37,360
$36,550
$52,390
$35,050
$33,440
$36,670
$35,180
$49,670
Welders
$27,840
$29,010
$37,240
$29,600
$28,810
$30,420
$30,820
$33,110
Engine & Other Machine Assemblers
N/A
$32,140
$33,650
$26,530
$29,090
$30,920
$30,500
$32,690
*2003 Economic Research Institute, Geographic Reference Report, ERI
Other occupations ranging from material handler to electrical engineer to accountant also have significantly lower labor costs compared to other states.
Incentives
Oklahoma offers aerospace firms several rewarding incentives including cash back for jobs created, tax credits and exemptions and a unique federal tax incentive.
Oklahoma's Quality Jobs program promises quarterly cash payments for new payroll for 10 years for qualifying companies
Investment tax credits equaling 1 percent of investment in depreciable property for five years, which doubles in an enterprise zone
Sales and use tax refunds on taxes paid on construction materials in new manufacturing facilities
Property tax exemptions including a five year abatement on 100 percent of property tax on new investment in manufacturing space
Sales and use tax exemption available for machinery and equipment used in manufacturing including property consumed
Accelerated federal property tax depreciation that provides a 40 percent shorter recovery period for depreciable property on Indian land
Take the following example for an aerospace manufacturer:
Oklahoma Incentives Analysis Example for Aerospace Manufacturer
A. SIC 3271 -- aircraft (parts/engines)
B. 1,000 jobs created
C. $40,000 average third year worker's salary
D. $100 million investment
E. 60% ratio of machinery and equipment to investment
F. located in an Oklahoma Enterprise Zone
State Incentives and tax exemptions:
Option 1: Quality Jobs Incentive
$18.6 million over 10 years
Option 2: Investment Tax Credit
(Alternative to Quality Jobs) Incentive
Sales and Use Tax Reimbursement on Construction Materials
$9.5 million over five years
$1.14 million, one-time
Five-Year Property Tax Exemption
$4.1 million over five years
Sales Use Tax Exemption on machinery and equipment
$4.275 million, one-time
Freeport (Inventory) Tax Exemption
$625,000 annually
Sales and Use Tax Exemption on Goods Consumed in Manufacturing
$9.375 million annually
Sales and Use Tax Exemption on Energy Used in Manufacturing
$93,750 annually
With Option 1, the Quality Jobs Cash Incentive Program, the estimated value over 10 years totals in excess of $128 million
With Option 2, the Investment Tax Credit Package, the estimated value over 10 years totals up to $120 million
Federal Incentives (applicable in qualifying Native American Lands):
Present Value of Savings from Accelerated Depreciation: $3.6 million
Native American Employee Tax Credit (four years): $384,000
Oklahoma provides an established, state-of-the-art aerospace training infrastructure that begins at the high school level and continues through advanced degrees. In fact, state programs will provide free worker training for qualified companies that establish training standards. See the Labor and Productivitysection for more information.
Facilities
From aircraft hangars to manufacturing and maintenance facilities, Oklahoma has what aerospace companies are looking for. There are more than 200 industrial parks and hundreds of ready to go office, plant and building sites. Prime locations are available in key aerospace clusters located near ample rail, road and port access.
Lease rates per square foot for both industrial and office space in Oklahoma are more competitive than most other states. In fact, industrial and commercial construction and land costs average 5-10 percent lower nationally and 20 percent lower than the East or West coasts. Additionally, Oklahoma real estate sales prices are lower than other areas. Suburban Industrial Real Estate prices in Oklahoma City and Tulsa, for example, run from $19-$22 respectively for 100,000 to 250,000 square feet. In Dallas/Ft. Worth the rate is $28; St. Louis, $40; and Seattle, $43.
Utilities:
Oklahoma possesses a significant cost advantage over other states and cities with among the lowest electric and gas rates in the nation with long-term energy supplies assured. The Industrial Monthly Electric Costs per 1,000/kw/400MWH is far lower than other cities including Dallas/Ft. Worth, Houston, Atlanta and Seattle
