Editor’s note: Randy Zook is president and CEO of the Arkansas State Chamber of Commerce/Associated Industries of Arkansas, and is serving as vice chairman of the Jobs for Arkansas committee. Opinions, commentary and other essays posted in this space are wholly the view of the author(s). They may not represent the opinion of the owners of Talk Business & Politics.
“All politics is local.” It’s the often-repeated phrase used to illustrate that, even when weighing a broad policy issue, people care most about how it impacts them and their community. That sentiment applies even more fittingly to the world of economic development.
When it comes down to it, all economic development is about bringing good jobs to local communities. Issue 3, a proposed constitutional amendment for economic development on the General Election Ballot, is a prime example.
Issue 3 will arm all of our cities and towns – no matter the size – with the tools needed to effectively compete for jobs. Opponents have questioned whether local communities are equipped to decide whether a project is worth their investment. I say, our communities are in the best position to decide how to spend their own local dollars. The state always has and will continue to play a vital role in attracting new industries and companies to Arkansas, but our cities and counties are an essential part of the process.
Right now, ambiguities in our state Constitution have left our communities with their hands tied when it comes to using local resources to recruit employers. Issue 3 would provide clear, consistent definitions for “economic development projects” and “services” in our Constitution, eliminating the need for constant and varying legal interpretation of what kind of economic activities a city or county may engage in, letting them focus on creating jobs.
Issue 3 gives cities and counties clear authority to spend local dollars on economic development. Because the Constitution is currently unclear, so are the guidelines for local communities, which leaves them frustrated and vulnerable. For example, right now, some towns in Arkansas are sitting on reserves of public money, that voters specifically marked for economic development, but the community can’t spend it, for fear of a legal challenge under the current Constitution. Issue 3 will fix that, allowing local dollars to be spent to attract local jobs, and allowing our cities and counties to compete with other communities across the country.
Under Issue 3, with voter approval, cities and counties will also be able to issue bonds for economic development projects. Qualifying projects are closely defined, and any bond issue would require approval from voters, ensuring a system of checks-and-balances. Empowering Arkansas communities with this development tool puts them on an even playing field with our competitors in other states, and it will be a game-changer in our ability to compete for jobs at the local level.
Finally, Issue 3 will enhance Amendment 82, known as the “super project amendment.” This is critical for the state’s ability to recruit and land top employers. Currently, bonds issued under Amendment 82 are restricted to five percent of the state’s general revenue budget. That limits the number of large employers the state can land at one time. Issue 3 would remove that restriction, giving the state the flexibility to compete for multiple large projects at once. Those projects will still undergo multiple layers of scrutiny, including an independent, third-party economic impact study, which is required before a legislative vote. Opponents claim it’s “too risky” for the state to remove the Amendment 82 restriction. I argue the real risk lies in doing nothing.
The state issued Amendment 82 bonds for Big River Steel, a Northeast Arkansas employer, in 2013. That means over the next decade or more, we only have the capacity left to recruit one – maybe two – other large projects to our state. By not enhancing Amendment 82, we’re basically saying Arkansas is closed for business when it comes to attracting major, top-quality employers that bring with them higher paying jobs.
Opponents claim Issue 3 is “corporate welfare.” That’s just not the case. It’s not about bolstering businesses, it’s about growing communities.
And Issue 3 is vital for Arkansas’s ability to bring home good-paying, high-quality jobs to communities in every corner of the state. It doesn’t get more local than that.