Hutchinson says bond issue for Lockheed Martin would be $87 million | Arkansas Blog

Thursday, May 21, 2015

Hutchinson says bond issue for Lockheed Martin would be $87 million

Posted By and on Thu, May 21, 2015 at 11:41 AM

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Gov. Asa Hutchinson talked with reporters this morning about the items on his call for a special session to begin next Tuesday including $87 million in corporate welfare for a major defense contractor with a budget bigger than the state of Arkansas.

Among others, he said the state bond issue to pay for Lockheed Martin to expand a Camden facility in a bid to produce new military vehicles would be $87 million, counting expenses. No details yet on the terms of the payback and how much the state has committed to spend to train the workforce. 

Reminder: Lockheed Martin reported more than $5 billion in gross profit in 2014 on sales of $45 billion. The state of Arkansas makes about $5 billion in general revenue each year. UPDATE: Hutchinson did say that the bond issue would be "the only commitment from the state of Arkansas; there's not any additional funds that are a part of it." In the case of the Big River Steel superproject in Mississippi County, the state also provided other incentives in addition to bond issues under Amendment 82, including various tax credits and a major equity investment from the Arkansas Teacher Retirement System.

Hutchinson also said he hoped to save a million or more a year with some small government reorganization, which includes moving the small Rural Services Department into the Arkansas Economic Development Commission. If this move has the effect of removing the decided pork flavor from that agency's distribution of funds around the state, it could be a good thing. Other moves put the Arkansas Science and Technology Authority in AEDC; the Division of Land Survey moves from Agriculture to the Geographic Information Office, and the Arkansas Building Authority will be subsumed into the Department of Finance and Administration. This will produce immediate budget savings of more than $1 million through job eliminations, most already vacant, and potentially produce an equivalent amount in savings from future job attrition. UPDATE: Hutchinson said that all four of these moves combined would result in "potential savings of approximately $10 million over five years" as well as "better delivery of state services [and] better coordination on economic development."

Hutchinson insisted that moving the 2016 Arkansas primary elections to March would be to give Arkansas a voice in the presidential election. Presumably he means a voice in selecting the Republican nominee. Hutchinson is backing Mike Huckabee, the Florida resident who once lived in Arkansas, and Huckabee's hopes are pinned on a big day in the Republican plan to have all Southern primaries on the same day in March so that the South will dictate the nominee. The move will wreck the regular primary elections and depress challenges to incumbents, plus help incumbents by freeing them from fundraising restrictions around the legislative session. It will be moved from February to April in 2016. Hutchinson said he hadn't talked to Huckabee, but had talked to some other Republican candidates. He insisted the move wasn't merely to help Huckabee. Nobody asked about the larger issue of messing with the primary election date for everyone else.

UPDATE: A reporter asked the governor about controversy over his pick of former state legislator Denny Altes to serve as state drug director, including an email exchange highlighted by the ACLU in which Altes makes reference to being "overrun" with illegal immigrants and "being out populated by the blacks also." The reporter also asked whether Altes can serve as drug director given that he currently holds a position on a quorum court.

Hutchinson's response, in full: "In reference to the fact that Mr. Altes is on the Quorum Court in Sebastian County — I understand that there's an Attorney General's review of that. I'm not aware of any legal impediment to that, but the AG will make the determination on that and we will look at it very carefully, obviously. In terms of, ah, Mr. Altes served in the legislature for many years, and I think that he will do a fine job as drug director."

The governor also addressed recent reports that C-H Mack, an IT contractor with the Department of Human Services, failed to provide services to the agency despite being paid some $4.8 million. That contract ended last year. Hutchinson said it appeared "the state of Arkansas did not receive any significant benefit for [the contract]" due to "poor contractor performance. ... Quite frankly I don't believe it had the oversight that was needed from the government side." 

"I've spoken with the Attorney General in reference to contract and asked for them to review it, as well as in terms of whether there is any potential claim against the company — whether there is any possibility of recovery on behalf of the state of Arkansas," he said.

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