Process begins to approve alliance funding

Arkansas Rep. Tracy Pennartz, D-Fort Smith, has gained Joint Budget Committee approval for a plan designed to help support regional groups focused on economic development.

On Tuesday (Jan. 24), the Joint Budget Committee of the Arkansas Legislature approved the transfer of $250,000 to the Arkansas Economic Development Commission to fund Act 895 of 2011 (Link here for the PDF of the Act). The money, pulled from a $72 million state surplus, would be managed by the AEDC and provided only to “certified regional economic development alliances,” Pennartz said during a Tuesday interview with The City Wire.

The funding is not entirely supported by Gov. Mike Beebe.

Act 895 created the legal mechanism by which regional economic development partnerships could be formed, and what such alliances must do to qualify for state support.

“When economically feasible, the state should assist regional public-private efforts to promote economic development by providing state funds to share the cost of eligible marketing and promotional expenses associated with implementing a regional strategic plan,” according to Act 895 language.

The bill did not identify a funding source. Also, the Joint Budget Committee approval must be followed with full Legislative approval in the upcoming Fiscal Session.

“That was just a step in the process we started today,” Pennartz said. “Now, in the actual session, I’ve just got to make sure we get enough votes … so this recommendation stays in and the Legislature votes to approve it.”

Pennartz said entities like the recently formed Fort Smith Regional Economic Development Alliance and the more established Northwest Arkansas Council. Pennartz said staff with the Northwest Arkansas Council helped her and Rep. Uvalde Lindsey, D-Fayetteville, craft language for the bill that eventually became Act 895.

“You have to get county governments and the cities to get together and say, ‘Yes we really do want to work together to market our area,’” Pennartz explained.

Alliances, councils and other groups must meet a detailed list of criteria — as established in Act 895 — to be eligible for grant funding under the proposed plan. The funding also requires a 2-1 match from the applying entity.

Allowable uses include research studies, purchase of demographic information, website promotion, direct mail to economic development groups or individuals, public relations, and site tours for consultants and prospects. Salary or salary support, membership dues, construction costs and purchasing alcohol are some of the items not allowed under Act 895.

“The bottom line of all this activity is the creation of jobs,” Pennartz said.

Paul Harvel, president and CEO of the Fort Smith Regional Chamber of Commerce, said the Fort Smith Regional Alliance would likely be interested in pursuing grant funds if the $250,000 program is ultimately approved.

“First of all, we’ve got to do our own budgeting, but if we had something programmatic we needed to do for the alliance … sure, we would apply for a grant,” Harvel said. “But we would not go after anything unless we felt we really needed it.”