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There may be no organized opposition to Amendment 2, which would let the legislature, rather than voters, approve state general obligation bonds in support of large industrial projects. But there are many reasons to oppose this hastily drawn and badly flawed amendment.
  • Backers keep saying the bonds would be "limited to infrastructure." This is a lie. The amendment says the money may be used "to finance infrastructure OR OTHER NEEDS [my emphasis]." Voters were scammed like this before by the tax increment financing amendment, which allows school property taxes to be diverted to private business projects. TIF legislation is written to make it appear that it is meant to combat blight. Wiggle words say the money may be used for any purpose. In Little Rock, developers already have tried to divert school tax money to an upscale shopping center in the richest part of town. Rogers is about to expropriate school tax money to build freeway access to rich folks' office buildings. Some blight.
  • The amendment says bonds may be used only to support "projects investing a minimum of $500 million in capital expenditures." Does that figure count the state's capital investment, or only the private investment?
  • How much money may the state raise for a private project? The amendment says bonds may be issued up to 5 percent of state general revenues in the most recent fiscal year. Even backers of the amendment disagree on whether that refers to gross or net general revenues, a difference in the tens of millions.
  • How often could bonds be issued? Some think you could float an unlimited number of issues up to the limit. Others claim there's a limit, though it's not visible in the amendment to the naked eye.
  • Bonded projects must create a minimum of 500 jobs. Does that include construction jobs, too, or only permanent jobs? Even then, how soon must the jobs be created? Five years? Twenty years? Amendment doesn't say.
  • The amendment offers no way to recapture state money if industries don't deliver.
  • The amendment provides no accountability. Under current law - and the corporate welfare crowd isn't likely to change it - the Freedom of Information law allows secrecy for the specific tax breaks and public expenditures a private company receives. The private companies also may keep job creation figures secret, again in the name of competitive advantage. History shows that economic development officials don't rigorously monitor corporate welfare recipients for delivery on jobs promised. They don't like to uncover their own mistakes. The message of the amendment seems to be that the people can't be trusted to vote wisely. Backers counter that their objective is only a speedier response to potential new industry. But it takes time to call special legislative sessions and soberly consider huge commitments of public money. It also will take time to pass legislation to correct the blunders in this amendment. It will take even more time for a test lawsuit to resolve what the amendment means. No reputable law firm will sign off on a bond issue until that happens. Funny thing. We are typically encouraged to distrust politicians Here the lobbyists say, "Yes, this is a pile of legal dung. But the legislature can fix it. Trust us." Sorry. I don't. They wrote it.
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