• Senate Report: Week 4 review
The 89th General Assembly has passed a few bills thus far and has made headway on a few topics. We have had genuine conversation in our caucuses and committees about substantive things.
The press has briefly reported on those things, and mainly tended to focus on anti-abortion and gun bills. I can understand their fascination. Everyone has an opinion and every story elicits a response – exactly the ingredients for typical news fare.
This became quite clear to me upon a trip to Little Rock early one morning this past week. I was fortunate to hear news updates about every 20 minutes and in the course of my journey, all I heard time and again was that the Legislature was concerned with these two issues.
First let me say I think these issues are important, and they should be.
Having said that, I believe it is time to talk about Jobs. You know, jobs at which people work. Jobs that allow you to buy things like milk, eggs, and even a car. Jobs that enable you to pay for a college education for your children so they can have it better than you do. Jobs that pay for the house you live in, and hopefully, a vacation every so often.
Jobs are important. Jobs fuel the economy and help take our mind off other problems like budget cuts, raising taxes, and painful service cuts.
Last Monday, Gov. Mike Beebe and the Director of the Arkansas Economic Development Commission Grant Tennille, along with 25 other “experts,” came to the Senate to share with us their due diligence and also answer questions about the Big Steel project I touched on in last week’s column.
I specifically have concerns that relate to using state dollars for incentives on something that may not pan out (anyone remember the Mitsubishi plant?).
As a legislator who will vote on the measure, I will quite candidly share my feelings. This is the first “Super Project” the state has ever entertained. To turn them down before they get started will likely end our chances at seeing another one. At the same time, we have the opportunity to help lay a foundation for creating an economic engine in Osceola that begins with a commitment to hire 525 people with an average salary of $75,000. I am quite sure if I presented that proposition to the people in our region and said it would be in the former Whirlpool location, it would be a resounding yes from an overwhelming majority.
Following are some key points from last week’s meeting in which I asked several pointed questions.
Return on our investment? The payback on the state’s portion of the deal is 4-6 years. Not bad at all. It is a $1.1 billion deal and the state is about 10% of the investment.
They (the other investors) will spend $250 million before any state dollars are spent. The Arkansas Teachers Retirement System has done a lot of research into the deal and is going to be a 20% partner in the deal with an investment of $60 million.
Of the $125 million the state will be investing, $50 million of that is a loan to be paid back. A majority of the remainder is for infrastructure and work that will benefit Big Steel or others and could be re-used.
All in all, there were about 2 hours of questioning, and you could be assured they had done their homework prior to the presentation.
It’s not a sure thing, but it has all the workings of a good deal for them and a good deal for the state of Arkansas.
Let’s wish them success, and better yet, a quick return on our investment.
Back to Jobs, particularly for the River Valley. The other part of the jobs discussion deals with taxes and fiscal responsibility.
You will begin to see this week, some activity in filed bills and discussions on ideas that allow capital to be rewarded instead of punished.
I believe many taxes are there to punish behavior. Government officials want you to quit smoking, so they raise the taxes on cigarettes. We need more money for roads, so we raise the taxes on fuel consumption. It is time for us to quit punishing the investment and use of capital and allowing us to be more competitive with our neighbors and more effective in the fight to bring dollars here.
I always find it amusing that during political campaigning, those fighting for your vote celebrate the number of jobs they have “created” while in office. I think people know better. Politicians don’t create jobs, businesses do. You do.
As legislators, we may help lay a foundation for more jobs, but that doesn’t create them. We may put policies in place that will encourage more job creation, but that doesn’t create them. The job creators are the ones who risk what they have, bet on the future, and make strategic decisions that hopefully earn them return on their investment.
In my real life and “other” job, we make these decisions on a daily basis and have in turn been successful in continuing to find work and be profitable.
I hope that we are able to move the conversation this week to what it takes to make Arkansas more competitive and enable us to attract more jobs, capital, and people. I am sure going to do my part to help, and I hope you encourage all legislators to do the same.
It’s time for action.