The case for corporate welfare | Arkansas Blog

Wednesday, September 7, 2011

The case for corporate welfare

Posted By on Wed, Sep 7, 2011 at 10:44 AM

Hugh McDonald, Entergy Arkansas boss and boss of Little Rock Regional Chamber of Commerce, and French Hill, boss of Fifty for the Future, give on the jump the corporate bosses' pitch for a $38 million corporate welfare slush fund in the pending proposal to raise the Little Rock sales tax by 200 percent so city government can increase operating spending by 26 percent a year.

They say it's misleading to say the chamber will control this money. From a seat on the research park boondoggle dedicated by law to a chamber appointee to other people, already appointed, who are closely tied to the chamber on that board; to an unaccountable $200,000 corporate welfare payout to the chamber each year in city taxpayer money;' to an anti-impact-fee mayor (bought by real estate contributions to his tax campaign), to an anti-labor political climate, how can anyone doubt that the chamber calls the shot in Little Rock city government, whether de jure or de facto?

The corporate bosses make clear that they are not through asking the poor people of Little Rock for more money to extend corporate bribery to a corporate America that long ago stopped believing in true free enterprise in favor of regressive taxes that soak the poor, corporate welfare for the rich and guaranteed profit for a favored few. This vote is just the first of larger pleas for more subsidies. The chamber has long campaigned for a tax dedicated solely to corporate welfare. This is a mighty first step.

Do we really want to give away $9 million in grocery sales taxes to lure an M&M plant? (In Kansas, Topeka cut the throat of other Kansas locations for the candy factory. State incentives are one thing; mutually destructive intrastate incentives are another.) Hugh McDonald and French Hill say we do need this sort of thing. Do we really want to be more like Oklahoma? The corporate bosses say we do. I do agree with them that we want a safe, well-repaired and aesthetically pleasing city. However, I don't believe, as they seem to think in the structure of their editorial, that this should be an afterthought and that the top priority should be handouts to other corporate bosses.

See how easy it is to throw that "boss" label around, as the chamber bosses love to do when they talk about the puny, almost non-existent unions of Arkansas? I leave it to you to decide which bosses call the shots at City Hall.

By Hugh McDonald (Chairman, Little Rock Regional Chamber of Commerce), J. French Hill (President, Fifty for the Future)

For much of the past 60 years, cheap land and low-wage labor drove economic development in the South.

Today, economic development is driven by people. Sure, a community must have pad-ready, fully infrastructured sites and competitive incentives. But without a superior quality of life to attract and keep talent, business will not come or stay.

The business community is generally characterized as adverse to tax increases. While business abhors waste and onerous regulations at all levels of government, it understands that strong public safety, excellent public education, robust infrastructure, and overall quality of life are all vital for real and sustained economic development.

The Little Rock Port, which has driven economic development in the City for the past four decades, is now victim of its own success. In the past six years, the Port has seen more locations and expansions than in other period in our history. As a result, only two sites remain in the 2,460-acre park. Without immediate expansion, there will simply be no place for businesses to locate or expand in the City of Little Rock, even if they wanted to. That means we will lose those good jobs to our competition.

Just as the City and business leaders came together to create the Port in 1971, now is the time to expand it for the present and next generations.

Little Rock is blessed with, perhaps, the greatest concentration of medical talent of any community its size in the world. Further, the proximity of UAMS , UALR and Arkansas Children's Hospital create an opportunity for a research and development park which will commercialize and retain the high volume of intellectual property being created among these campuses, as well as by other researchers in the region. The Little Rock Research & Technology Park will bring and keep high wage, knowledge-based jobs for the City, empowering the Park to drive economic development now and into the future.

Kansas recently landed one of the nation's most hotly contested economic development locations when Mars chose to build its new M&M plant in Topeka. The planned Platinum-LEED certified plant will be one of the most green advanced manufacturing facilities in the world. In addition to state incentives, the city and county of Topeka put $9 million in incentives on the table to attract the plant.

Another of Little Rock's major competitors - Oklahoma City - has $75 million in publicly funded local economic development incentives. And that's on top of an annual private investment of $4.9 million.

One may not like economic development incentives, but without them, a community simply cannot compete for jobs in the global economy. For Little Rock to continue to succeed, it must have its own economic development incentives to complement those of the Governor and State of Arkansas. Despite the deliberately misleading statements of some in opposition, not one cent of this fund would go to or be controlled by the Little Rock Regional Chamber of Commerce. On the contrary, the fund would simply give the elected Mayor and City of Little Rock Board of Directors tools comparable to those of the Governor and Legislature and only be used when state incentives are applied for economic development projects.

Even some supportive of the penny increase in the City sales tax have suggested that expansion of the Port, creation of the Technology Park, and funding of local economic development incentives should have been presented to the voters as a separate initiative. However, economic development and the health of our City are inseparable. We simply will not attract and keep talent and business if our City is unsafe, in disrepair and aesthetically displeasing.

Beginning with early voting on September 6th and through election day on September 13th, we strongly encourage representatives of Little Rock's business community to vote YES twice and encourage their Little Rock resident employees to do the same. Our economy and City are inextricably linked. One simply cannot be successful without the other. United we succeed; divided we fail.

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