Debunking the ‘Job magnet plan’

Kindly allow me, City Council member and Democratic Candidate Adella Gray, to accept my invitation to respond to a well-written guest commentary from my opponent, Republican Representative Charlie Collins of Fayetteville. His opinions were published here by The City Wire on Aug. 31, 2012.

Rep. Collins’ point is that more jobs will assuredly come to Arkansas if only we cut our top income tax bracket from 7% to 6%. His solution is to “become a jobs magnet” by cutting taxes on the wealthy.

He proposes that we continue to provide police protection, fire protection, highways and county roads, health care for the indigent, and also fund all levels of education. He says we can do this by slowing the growth of state spending.

He says “common sense tells us labor costs help determine where employers add jobs.”

All that sounds good and it is politically expedient in an election year. But I have to question whether now is a good time to experiment with our very complex economy by cutting taxes on the wealthy in hopes of kindling a fire on our jobs market.

Let’s look to the professionals for expert guidance here. Who are the professionals? I recently found an article reporting what the Arkansas Economic Development Commission has to say about this. As you may know, the purpose of the AEDC is to aggressively promote our state as a jobs recruiter. They know what it takes to bring jobs to Arkansas because that’s what they do day in and day out.

Only a few months ago, the Director of the AEDC Grant Tennille testified before the Joint Revenue and Tax Committee, of which Rep. Collins is a member. The purpose of Director Tennille’s testimony was to comment on essentially what Rep. Collins is proposing in this election cycle. The issue for discussion was whether changing the Arkansas tax code would be an effective incentive for more jobs.

According to Director Tennille, many of the state’s existing tax incentives are corporate income tax-based, not personal income tax-based. Let me be clear; Rep. Collins is not talking about cutting corporate taxes in his article, he is talking about cutting personal income taxes primarily for the wealthiest of Arkansans.

Tennille testified how in nearly five years of sitting at the table and in closing economic deals, he has never once heard the subject of taxes as having been mentioned as a deterrent to relocating or expanding in Arkansas.

“I have yet to hear a company tell us, ‘We’re not coming to Arkansas because of the tax treatment our company would be subjected to,’” said Tennille. “The Chinese companies are interested in Arkansas because of our geographic position in the U.S. and our geographic position in the western hemisphere.”

“Most of the people we talk to and work with are looking here because they see something about our resources – and lately it’s been logistics, logistics, logistics – that they like,” Tennille told the tax panel.

Another big recruiting advantage, particularly with foreign firms, is proximity to Wal-Mart’s corporate headquarters in Bentonville.

In my candidacy for Representative, I have made it my point to talk to people on both sides of the aisle.

My goal on the campaign trail is to listen to all people and even seek out those people who are the best position to know what works. My goal is to find the win-win solution.

Take for example how we host nearly 30,000 university and community college students from our state and nation. New students and incoming faculty help all of us stay strong, even in tough economic times. New faces bring steadiness to our local economy, reliability to our housing market, and diversity to our quality of life.

Accordingly, I have promised to serve as a strong advocate for our colleges and universities if elected.

As another example, our community is a shining star for business as well. Wal-Mart and other world industry leaders call our home their home. Our community is ranked top tier nationally for a reason. Our rankings help prevent our business leaders from looking elsewhere.

I hope you agree with me that our community is strong today because the people who have served in the past have used their own good common sense.

We keep our budget balanced, we give business a reasonable environment in which to thrive, and we devote sufficient resources to quality education.

Those are the forces that create a good jobs magnet, in my opinion.