OCPA: Jobs leaving Oklahoma at the speed of Hertz for lower-tax climate

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By Dave Bond,

A few weeks ago, rental car giant Hertz announced it’s moving its headquarters from New Jersey to Lee County, Fla., which features the city of Fort Myers and backs up to Naples. While the $50 million Hertz will spend to build in Florida and the 700 jobs it will bring are significant, Oklahomans will be most sensitive to the 120 jobs the city of Tulsa is expected to lose in the move. Those 120 jobs are from Tulsa-based Dollar Thrifty Automotive Group, which Hertz acquired last year. Hertz executives indicated their New Jersey employees weren’t interested in relocating to Oklahoma. According to a Tulsa World story, most of the jobs headed from Oklahoma to Florida are executive-level positions. As reported by a south Florida newspaper, the average salary for all 700 jobs going to Florida is $102,000.

Some will say Florida’s beautiful gulf coast beaches are explanation enough for Tulsa’s loss of financial and human capital. But then why not move Hertz’s HQ to Mobile, Ala., or Biloxi, Miss.? Cost-of-living in either, or in Tulsa, is lower than in Fort Myers or Naples.

In a press conference with Hertz’s CEO, Florida Gov. Rick Scott pointed out that a big reason his state is a “top destination” for business is its lack of a personal income tax. Florida is one of only nine states with this distinction. Oklahoma has a top income tax rate of 5.25 percent, ranking it 20th nationally. Alabama’s top rate is 4.25 percent and Mississippi’s 5.00 percent – 12th and 16th, respectively.

Oklahomans lamenting the Hertz move may be reminded of Ponca City and Bartlesville. Since 2002, when energy titan ConocoPhillips began pulling out of Oklahoma, its home state, and officially relocating its corporate operations to Houston, those two communities have seen losses of wealth and human capital.

In Ponca City, local economies that grew around Conoco Inc. have thinned out. And though Bartlesville wasn’t hit as hard, it has seen an outflow of intellectual and leadership capital as many ConocoPhillips retirees leave for Dallas or other destinations south of the Red River. Texas, like Florida, doesn’t penalize its citizens for earning a living.

Meanwhile, moves into Fort Myers and out of Tulsa reflect economic trends. According to Internal Revenue Service data, processed by the How Money Walks project ( from 1995 to 2010, Lee County, Fla., gained over $9 billion, cumulatively, in adjusted gross income. Over that same period, Tulsa County, Okla., lost a total of $1 billion in AGI.

Oklahoma’s recent landmark reform to move workers’ compensation claims out of an adversarial court environment and into an administrative system will do much to improve our state’s business climate. But Oklahoma can’t ignore that tax rates matter and that corporate executives keep tax considerations in mind when making decisions that directly or indirectly affect thousands of people and entire communities.