Arkansas Lawmakers Quickly Approve Bond Financing Bill For Camden Superproject

by Wesley Brown ([email protected]) 158 views 

Both the Arkansas House and Senate easily approved legislation Wednesday that would allow general obligations bonds under Amendment 82 to be set aside for Lockheed Martin’s bid to build the next-generation Joint Light Tactical Vehicle (JLTV) in East Camden’s Highland Industrial Park.

The Arkansas House of Representatives unanimously approved House Bill 1003 by a vote of 96-0 in Wednesday morning’s session, after which the full assembly of lawmakers stood and applauded the passage of the $87 million bond financing package. Four lawmakers were absent during the morning vote.

Not long after, the Arkansas Senate by a vote of 31-3 approved Senate Bill 6, its version of the same legislation. Both chambers will now have to approve each other’s version of the bond financing package this afternoon. The legislation will then go to Gov. Asa Hutchinson for his signature into law by the close of the special session, which is expected tomorrow.

Should Lockheed Martin win the contract, the company plans to invest more than $125 million in the East Camden facility. Approximately 600 new full-time positions will be created at the facility and as many as 655 indirect jobs will be created in South Arkansas as a result of this project.

According to Gov. Hutchinson and the provision in the 41-page bill, nearly $83 million from the bond financing will be handed over to Lockheed Martin for assistance in retaining its current 530-person workforce. Those funds will also be used to assist the company in expanding its current facility, and it will allow the Maryland-based defense giant to double its labor pool to handle the Pentagon’s award that will last through 2040.

The bond financing will also pay for an additional $1.6 million training grant to be used for construction and equipping of training facilities at Southern Arkansas University Tech in Camden. The remaining $2.5 million will pay for expenses related to bond issuance costs, debt service reserves, and other eligible financing costs incurred or paid by the state, officials said.

If the project falls through or if Lockheed Martin is not awarded the project, the deal is dead and Arkansas is off the hook for the money, said Hutchinson spokesman J.R. Davis. The payback of bonds for the state, which will be somewhere between 15 and 20 years, is dependent upon market conditions at that time.

State Rep. Matthew Shepherd, R-El Dorado, who carried the legislative for Hutchinson, told lawmakers that HB 1003 would help Lockheed Martin retain and add at least 1,000 jobs in South Arkansas.

“This is a tremendous opportunity for South Arkansas and the sole reason we are here at the state Capitol,” Shepherd told lawmakers on the House floor. “Perhaps no other community has suffered such an economic downturn over the last 20 years than Camden.”

Beyond the local economic impact, Shepherd said the bill would help Arkansas gain needed experience in auto vehicle manufacturing, telling a story that Arkansas was not in the running for the planned $500 million Volvo auto plant that went to South Carolina because the state’s labor force did not have the know-how and technical skills.

“This bill will allow Arkansas to bring an auto manufacturing plant to the state …, but not a conventional one,” he said. “But I would say this is better than the Volvos, the GMs, the Fords or any other manufacturer we can talk about because this legislation will allow for the building of tactical vehicles that will support our national security and keep our fighting men and women safe as they defend us around the world.”

Several other legislators also spoke in favor of HB 1003, taking up Shepherd’s economic development and patriotic themes as necessary reasons to support the legislation. A few also addressed claims by a smattering of critics that Gov. Hutchinson and the legislature were supporting “corporate welfare,” and that state government was now getting involved in the selection of losers and winners in the private sector.

Rep. Charlie Collins, R-Fayetteville, said told fellow lawmakers at the House podium that he was supporting HB 1003 after he voted against Amendment 82-sponsored legislative to give the Big River Steel a $125 million package to build a $1.3 billion steel mill in Northeast Arkansas.

“The principle involved in this (bill) is different in my eyes,” Collins told fellow lawmakers. “When I was in the Navy years ago, we use to make fun of the military for paying $400 for hammer or $6,000 for a toilet seat, but the federal government nowadays seems to be pursuing a path to say that we are going to spend $30 billion of your hard-earned federal tax dollars on this vehicle for our troops.”

Collins said the taxpayer-sponsored bond financing for the project will ultimately benefit Arkansas taxpayers over time. “To me, this seems like a very fair deal,” he said.

On Tuesday, the Arkansas chapter of Americans for Prosperity sent out a legislative alert opposing the Lockheed Martin bond financing package.

“Attracting jobs to our state is correctly a high priority for both the Governor and state lawmakers, and bold action should be taken by policymakers to improve the business environment in our state,” AFP said in a statement on its website. “Unfortunately, rather than working to expand opportunities for all Arkansas families and businesses, lawmakers are poised to consider legislation that would put taxpayers on the hook for a multi-million dollar, debt-financed giveaway to a single corporation.”

AFP also noted that each job created by the Lockheed Martin project financed by the bill would cost taxpayers approximately $145,000. At an average wage of $57,000, the direct jobs will result in an added payroll in the South Arkansas economy of nearly $34.2 million annually, or $855 million over the next 25 years, according to an analysis by Talk Business & Politics.