Sunday, July 14, 2013

State wants refund of corporate incentive payments

Posted By on Sun, Jul 14, 2013 at 7:47 AM

HE SAID WHAT? Grant Tennille says state will seek repayment of corporate incentives from companies that fell short of hiring goals.
  • Arkansas Business
  • HE SAID WHAT? Grant Tennille says state will seek repayment of corporate incentives from companies that fell short of hiring goals.
Another reason to appreciate Grant Tennille, the director of the Arkansas Economic Development Commission.

Tennille made headlines last week for making — as Democrat-Gazette columnist Philip Martin observed smartly today — "common sensical" remarks that it would be good for Arkansas to be seen as a welcoming place by repealing law that discriminates against gay people.

It wasn't his first bout of common sense. Earlier, while expressing no intention to end the corporate welfare game, he has said states need to be smart about paying out incentives to industrial prospects. He also has taken pains to attempt to educate legislators and others on the fact that low taxes alone don't drive economic development decisions. Indeed, most business people will tell you taxes tend to exert influence on the margins, at best, compared with infrastructure (which require taxes), workforce education, natural resources, transportation and other factors (including culture, aesthetics and prevailing general attitudes).

Now, I read on Stephens Media, Tennille's forthright assertion that the state of Arkansas WILL seek clawbacks from companies that received rich subsidies to locate facilities here, but have now laid off hundreds of workers. The state is obligated to do no less, but I can't recall a single previous AEDC director talking so openly about getting some state handouts back when companies didn't deliver.

It will take a while, but the state is reviewing payments and unfulfilled promises from Hewlett Packard for its sales and service center at Conway and the Nordex wind turbine component factory in Jonesboro.

“The process now is working with both companies and both companies have acknowledged to me personally that they will owe us some money back,” said Grant Tennille, director of the Arkansas Economic Development Commission. “It’s not a question of if we can get any back. In both cases we will get clawback.”

Common sense. Let it roll down on us like water.

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