Thursday, July 31, 2014

Hypocrite of the week: John Correnti, state welfare king

Posted By on Thu, Jul 31, 2014 at 6:06 AM

click to enlarge HYPOCRITE OF THE WEEK: John Correnti. - ARKANSAS BUSINESS
  • Arkansas Business
  • HYPOCRITE OF THE WEEK: John Correnti.
John Correnti, the chief executive of Big River Steel and other ventures, gave an interview to Arkansas Business that easily won him hypocrite of the week honors and puts him in the running for the biggest hypocrite of the year.

He was asked about the government role — extensive in the case of the steel mill he's building in Mississippi County as well as some other ventures. He responded on government's role, with some emphasis supplied.

Stay out. You might say, ‘Wait a minute. You’re being hypocritical, John. Look what the state put up.’ And that’s true. But you’ve got to stay competitive as far as a state’s concerned. You can ask Grant Tennille at AEDC. His competition is Tennessee, Texas, Louisiana, Mississippi, Alabama, Georgia, North Carolina. Is it better for the state to invest in a company like Big River? Or is it better to invest in more SNAP cards and more welfare? The governor and Grant Tennille — they didn’t give away the whole candy store. They used Amendment 82 the way that the citizens of Arkansas intended them to use it. But as far as government is concerned, they should stay out of private industry.

Welfare? The brass of this blowhard. Let us recapitulate the welfare enjoyed by Big John Correnti, in the course of being subsidized to provide direct competition to Nucor, which started pretty much on its own hook and was none too happy about Correnti emerging as a government-subsidized competitor in their backyard: The welfare list compiled for me by the AEDC:

BIG RIVER STEEL – Amendment 82

Authorized state to issue up to $125 million 20 year general obligation bonds

· $50 million loan to Big River Steel

· $50 million grant for site preparation

· $20 million grant for subsurface stabilization – pilings

· $5 million bond issuance cost

BIG RIVER STEEL STATE INCENTIVES in Addition to Amendment 82

· Tax Back - provides sales tax refunds on building materials, taxable machinery and equipment associated with the project.

· Advantage Arkansas – 4% income tax credit based on new payroll for new jobs for five years.

· Training Funds — $10 million ($5 million Governor’s Quick Action Closing Fund, and $5 million Department of Workforce Services Trust Fund)

· Recycling Equipment Tax Credit — income tax credit equal to 30 percent of eligible recycling equipment costs. These tax credits will carry forward for 14 years.

· Sales Tax Exemption on Utilities –provides full exemption of sales tax associated with the sale of natural gas and electricity.

· Arkansas Development Finance Authority (ADFA) agreed to make $5 million in bridge-gap funding available to Big River Steel. The $5 million assures the $14 million in local incentives (see below) will be immediately available. Mississippi County/Osceola has more than $9 million in the bank for Big River Steel and the remaining $5 million is to be collected by the end of 2014 via a half-cent sales tax for economic development. ADFA’s $5 million simply makes the full $14 million available today.


LOCAL INCENTIVES

· $12 million from Mississippi County and $2 million from the City of Osceola.


ARKANSAS TEACHER RETIREMENT SYSTEM

· Trustees of the Arkansas Teacher Retirement System (ARTRS) have approved investment of up to $125 million in system funds in Big River Steel (ARTRS originally announced a total investment of $60 million but recently authorized an additional $65 million investment).

That's tens of millions in direct handouts and tax giveaways. That retirement system investment was contributed by taxpayers to the fund that pays for teacher pensions. Those same venture capitalists — Arkansas taxpayers — have put $18 million in another Correnti project, an electronics recycling business.

Stay out?

If government stayed out of John Correnti's business, he'd have no business.

A good return on my investment from John Correnti would be a polite thank you. And him shutting up.

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