State Sen. Trent Garner, R-El Dorado, filed a bill Monday (Feb. 1) to close Arkansas’ economic development office in China. But Arkansas does not have an office in China.
SB 252 states the Arkansas Economic Development Commission “shall not establish or maintain an office in China.” If an office is open, then the office would have to be closed when the bill becomes law, the measure reads. There is no emergency clause on the bill.
“It is simple: our tax dollars shouldn’t be supporting the Chinese Communist Party. This is the first step to move our government away from China and move jobs back to Arkansas,” Garner said in a tweet.
Gov. Asa Hutchinson told Talk Business & Politics he disagrees with the bill.
“Arkansas is in a better position for the future if we have the freedom to support our farmers and businesses to export products in that part of the world. China is the second largest economy in the world and while we closed our office in China some time ago, it is important to have the flexibility to work with businesses in Hong Kong, China and Taiwan. This is one way we support our businesses in the state. I am concerned that this bill limits that freedom and Arkansas’ ability to compete with the multiple other states that are present in that country,” Hutchinson said.
Arkansas had an office in China, but did not renew a contract for an employee there at the end of June 2020. It still contracts with a business agent who is U.S.-based, but travels to several Asian countries to help Arkansas with industry recruitment.
In addition to the exports referenced by the governor, two of Arkansas’ largest companies – Walmart and Tyson Foods – have major operations in China. Additionally, Hutchinson was successful in recruiting some Chinese manufacturing operations to locate in Arkansas earlier in his administration. The biggest prospect, the $1.5 billion Sun Paper Co., never came to fruition, however, in part due to tariffs and trade tensions between the U.S. and China during the Trump administration.
LEGISLATIVE BLACK CAUCUS MEETS
Rep. Mark Lowery, R-Maumelle, met with members of the Legislative Black Caucus on Monday to discuss two of his controversial bills – HB 1218 and HB 1231 – which restrict teaching of social justice and diversity, and the 1619 Project, a New York Times series that offers perspectives of slave voices in the American Colonial period.
Lowery said he was invited by the caucus to discuss the bills. While HB 1218 was briefly discussed, lawmakers spent most of the meeting asking about the 1619 Project ban.
“The 1619 Project, again, is a thesis in search of evidence. It is not one that should be taught as fact, it’s not one that should be taught as history, it is a narrative,” Lowery explained. “The writer says that all of American history is based on white oppression… It doesn’t take much to look around the room and to identify, in an uncomfortable way – in an almost child-abuse way – which students are the oppressors.”
While Lowery pointed to some students being uncomfortable, Rep. Vivian Flowers, D-Pine Bluff, pointed to her own experiences.
“Throughout my entire education, I was uncomfortable reading texts and talking about different issues that rarely included me,” she said.
Lowery’s consistent argument during the meeting was he was protecting people without a voice, but Sen. Joyce Elliott, D- Little Rock, also a former educator, said teachers do not determine who has a voice in class based on skin color.
“There are going to be voices that students haven’t heard before. There are going to be voices that are going to make students uncomfortable, but isn’t that what the world is?” Elliott said.
“There’s an assumption built in that if we’re talking about the 1619 Project, somehow that that is going to negate the voices of white students, that is just a 180 from what would happen in any good classroom,” she said. “Every voice matters in exploring those perspectives and this is one of the major methods we use to teach students to be critical thinkers.”
Both bills are awaiting a fiscal impact study before they can be voted on in the House Education Committee. A video interview with Rep. Lowery and Sen. Elliott can be found at the end of this article.
SENATE REVENUE & TAX
The Senate Revenue & Tax Committee discussed two bills with big price tags, but did not take a vote on either measure. State Sen. Dave Wallace, R-Leachville, said his bill, SB 10, would give tax relief to the working lower class. It would establish a working taxpayer relief credit based on the earned income credit provisions in the federal tax code.
The bill would save a full-time worker earning minimum wage up to $500 per year, Wallace said. It would scale along with the federal earned income tax credit, or EITC. It will cost the state $77 million in revenue each year if passed. It would impact about 9% of the state’s workforce, he added, roughly 289,000 workers.
“It helps the working class of Arkansas … It goes to people who are working for a living,” Wallace said.
Several senators brought up the fact the federal program has had instances of fraudulent filings through the years. About 25% of the federal EITC filers were not eligible in 2019. It was noted that part of that percentage included filers who had mistakes on their returns including mailing address errors and others.
State Sen. James Sturch, R-Batesville, advocated for SB 26, which would allow for a sales tax exemption for the use of coal when used as a utility in manufacturing. The state allows for a manufacturing sales tax exemption for natural gas, electricity, and other utilities.
One manufacturer in his district, Future Fuel based in Batesville, uses coal in its manufacturing process, Sturch said. Each year, coal used as a utility generates more than $800,000 in sales tax revenues. Future Fuel alone would save about $250,000 a year if the bill passed. Sturch said other utilities not now included, such as propane, may also be added to the bill or passed in a separate bill in the future.
The Department of Finance and Administration opposes the bill. Sturch said he’s aware it would impact state revenues, but he thinks the sales tax relief will allow manufacturers to reinvest in their businesses and employees.
No action was taken on either bill during the meeting. Committee chair Sen. Bill Sample, R-Hot Springs, said votes would not occur on major tax bills until later in the session when budget priorities are clearer.
Editor’s note: TB&P’s Roby Brock and George Jared, and KATV’s Marine Glisovic contributed to this report.