Beebe not happy with Whirlpool; talks tax cuts

by The City Wire staff ([email protected]) 144 views 

Gov. Mike Beebe isn’t happy with Whirlpool, believes some of U.S. Rep. Paul Ryan’s federal budget plans could be “problematic and troublesome,” and is willing to put his tax-cutting credentials up against Republicans.

During a Monday morning (Aug. 13) interview with Roby Brock of Talk Business, Beebe also said his favorite Olympic sport is the men’s 400-meter relay. The Jamaican team took the gold in Saturday’s race, with the U.S. team capturing the silver.

“So, I was disappointed,” Beebe said.

He is also disappointed with execs at Benton Harbor, Mich.-based Whirlpool Corp. The company in late 2011 announced it would close its refrigeration production plant in Fort Smith. The move resulted in about 1,000 lost jobs when the plant closed in June. However, Whirlpool, which employed more than 4,500 at the Fort Smith plant in 2006, moved production out of the plant for several years prior to the closing.

“What’s happened in Fort Smith is just heartbreaking. … I’m sorry, I’m just not happy with Whirlpool,” Beebe said during the interview, adding that he’s not happy with any company that moves to Mexico simply for cheaper labor.

Beebe said Whirlpool execs made a bad decision, and are now operating facilities in Mexico where there social unrest.

“I communicated it with them when they were here and talking about doing it,” Beebe said when asked if he directly told Whirlpool officials about his displeasure.

He said state officials and chamber and city officials in Fort Smith are doing “everything we can” to find another tenant for the almost 2 million square foot plant.

“Problem is, Whirlpool still owns it and doesn’t want it marketed to a competitor,” Beebe explained.

Beebe, who has conducted trade trips to China and France, said Arkansas officials are working to recruit jobs “everywhere we can.”

“There’s not a place in the world where we don’t think we can be competitive,” he said.

Beebe just returned from a Southern Governor’s Association conference in Puerto Rico. Part of the discussion there focused on recruiting companies back from China, he said.

Rising labor and transportation costs have pushed some companies to move production or other operations out of China, and sometimes back to the U.S., Beebe explained.

On state politics, Beebe was quick to tout his tax-cutting record when asked about Arkansas GOP plans to create a more “equitable” tax structure by making changes in Arkansas’ individual income tax.

The tax generated $2.895 billion in fiscal year 2012 (June 2011-July 2012), or almost 49% of all state revenue for the year.

Beebe said there are “legitimate points of debate” in consideration of tax cuts, but if Republicans want to make deep cuts in the income tax “you better figure out where you’re going to get a couple billion.”

According to Beebe spokesman Matt DeCample, during Beebe’s term to date, the state has seen $1.26 billion in tax cuts and $530 million in tax increases — a $730 million net reduction in taxes.

“They talk about it. I’ve done it,” Beebe said. “When it comes to credibility about tax cuts, I’d argue with any of them. … However, we do it in a responsible manner” so deep cuts don’t negatively impact education, public safety and basic social “safety nets.”

Beebe did say he was willing to visit with Rep. Davy Carter, R-Cabot, and other legislative leaders on tax code changes. He said Carter is a “a very intelligent, thoughtful, responsible and pragmatic” legislator.

“I hope that doesn’t get him in trouble in Cabot,” Beebe joked after praising Carter. “I’m open minded and will always sit down with Davy.”

Beebe warned Republicans that Arkansans just want their political leaders to be honest and not make promises they can’t fulfill. He said a reason for his popularity in Arkansas across party lines is his approach to “underpromise and overdeliver.”

Beebe said his administration is seeking answers from federal officials about “flexibility” if Arkansas accepts more federal dollars to expand Medicaid services to an estimated 250,000 Arkansans.

When the U.S. Supreme Court ruled the federal Affordable Care Act was constitutional in late June, the high court also declared that states could not be penalized for choosing to not participate in the law’s proposed Medicaid expansion. Medicaid is federal-state program that provides health care funding for poor, uninsured citizens.

The law says the federal government will pay for 100% of the Medicaid expansion from 2014 to 2017. At that point, states would begin picking up a portion of the tab, ultimately matching 10% in state funding with 90% of federal funds by 2021.

Beebe said he would like to be able to opt out of the program if the expansion becomes unaffordable. He said “preliminary word” from federal officials is that states will have that flexibility.

Arkansas Republicans have said they oppose expansion of the program, or have recommended an incremental phase in. Beebe said he is open to all options, but told Brock that members of both parties in the Arkansas House and Arkansas Senate will have to agree on a plan because expansion will require a three-fourths vote.

“Republicans and Democrats are going to have to agree on this or it’s not going to happen,” Beebe said.

Rising health care costs and health insurance premiums are a “hidden tax” because hospitals and insurance companies increase costs to cover the services provided by those who can’t afford to pay. He said expanding Medicaid in Arkansas could reduce the problem.

Related to Medicaid, Beebe said the budget plan from U.S. Rep. Paul Ryan, R-Wisc., “scares me a little bit” with respect to cuts to seniors. Ryan on Saturday was picked as a running mate by presumptive Republican presidential nominee Mitt Romney.

Beebe described Ryan’s plan as “problematic and troublesome,” especially if it is proven that the plan includes “significant cuts.” Later in the interview, Beebe said voters will likely learn more about specifics of Ryan’s plan as the election nears.

Beebe said was “surprised” and “saddened” when learning that 2nd District Congressional Candidate Herb Rule was recently arrested for DWI by the Washington County Sheriff’s office.

Rule, who faces U.S. Rep. Tim Griffin, R-Little Rock, refused to take a blood alcohol test and says he is innocent. He plans to fight the arrest in court.

Rule was arrested and charged with DWI in 2010, but was found not guilty after the case went to trial.

Beebe said he still supports Rule, and denied any knowledge about Rule being pressured to drop out of the campaign.