Local Business Preference Ensures ‘The Buck Stays Here’

Mayor of Tulsa

The likelihood of Tulsa’s local economy to resume its strength and vitality will depend upon the stability and growth of our local small businesses. More than 75 percent of those employed in Tulsa work for a business of 50 employees or less. When the effects of a recession hit a community, it is small business that is hit the hardest and takes the longest to recover. Local businesses are committed to Tulsa and that’s why the City of Tulsa needs to be committed to them to do whatever the city can to help their recovery and growth.

This past spring I held five business forums with small business owners to listen to their concerns and the challenges they face when doing business with the City of Tulsa. As mayor, and a small business owner myself, I wanted to know how the city could help small businesses. I found that often times that meant making their dealings with the City more customer friendly, either by simplifying the processes they have to go through or removing government barriers that were both time intensive and expensive.

One thing I learned from these forums was the frustration many small businesses felt when it came to bidding for work or projects with the city. Many small business owners reported to me their dismay to see City of Tulsa projects and millions of local tax dollars being awarded to out of state companies. While some of the jobs created and dollars spent by the out of state companies remained in Tulsa, much of the tax dollars left Tulsa. I decided to see what I could do to keep more of these jobs and dollars in Tulsa.

The principal argument for local purchasing preferences is that by favoring local vendors, the city can stimulate local economic activity. Local vendors paying local taxes may be more likely to invest locally, employ local residents and spur additional local spending by their employees and suppliers. In fact, I learned that for every $1 spent locally an additional $3 is spent locally.

I learned that at least 11 cities across the country have adopted or considered local purchasing preferences. Also, at least six states have enacted “reciprocity laws” that require public agencies to add a percentage to each out of state bidders price equal to the preference given to a local vendor in the bidder’s home state. So, if the low bidder is from a state that grants a 10 percent preference to in-state bidders, the agency must add 10 percent to that bidder’s price when evaluating the bid.

Often times the city can do or not do only that which the State of Oklahoma is authorized to do. I believe that if there was a state law allowing a state preference with state bidding contracts, the City of Tulsa could follow suit and adopt our own local ordinance allowing the same.

I contacted Representatives Danny Morgan from Prague and Rep. Sue Tibbs from Tulsa, who agreed this was good for both Oklahoma and Tulsa. Together, they cosponsored the local preference bill. This bill, considered by some the “tie breaker” bill, had three parts: (1) give preference to goods and services that have been manufactured or produced in this state if the price, fitness, availability and quality are otherwise equal, (2) give preference to goods and services from another state over foreign goods or services under the same conditions, and (3) add a percent increase to the bid of a nonresident bidder equal to the percentage, if any of the preference given to the bidder in the state in which the bidder resides.
I am pleased to say the bill passed the Oklahoma Legislature and was signed into law by the governor early in June. With that the City of Tulsa will begin drafting our local ordinance to mirror the content and spirit of this pro business legislation.

This is but one small victory for local small business that I believe will pay dividends for many employers and employees. I want to thank all who attended any of my business forums. It was from each of you that I learned what I could do for you and I hope this is the first of many steps in my pledge that “The Buck Stays Here.”

Updated 07-07-2010

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