Jet Bill’s Crash Has Silver Lining

When we heard that state Rep. David Hausam, R-Bentonville, had proposed a House bill that would give Wal-Mart Stores Inc. a $2.3 million tax break to buy a $35 million ultra-long-range jet, we thought he was nuts.

A $35 million toy by any other name is still a toy. And with $165 billion in sales last year, Wal-Mart is in no need of public assistance. The firm’s point that its savings are passed on to customers is well taken, but it’s not like Wal-Mart’s brass being able to make Paris for lunch equates to a nickel off toothpaste and underwear.

There was the threat that if the world’s largest retailer didn’t get its way, it would park the plane out of state. That could have cost Arkansas about $345,000 in annual property taxes that go toward public schools, and about $1.8 million (5.125 percent) in a one-time use tax for goods bought outside the state.

The latter is divvied up between the Arkansas Department of Aeronautics (4.5 percent, or $1.6 million) and other state projects. So the Northwest Arkansas Regional Airport, Rogers Municipal Airport/Carter Field, Springdale Municipal Airport and Drake Field in Fayetteville would have been shorted, too.

But surely few believed notoriously thrifty Wal-Mart would locate such a luxury anywhere but at the immediate disposal of its corporate headquarters.

House Bill 1339 has since taken a nose dive in the 83rd General Assembly. Wal-Mart acquiesced after the bill collided with turbulent legislative and public opposition. But Hausam’s effort wasn’t wasted.

It reemphasized the fact that Arkansas must find ways to aid existing businesses with economic development. There is no statewide financial plan in place designed to help home-grown firms keep growing.

Hausam’s position that the state has been lax in reinvesting tax dollars with existing firms is correct. Legislators must realize that Arkansas is not mobile but that businesses are. Recently Arkansas missed out on a number of firms that left or wouldn’t locate here because of insufficient workers and support.

And Arkansas’ capital gains penalty and state income tax aren’t just warning beacons to companies that might otherwise land here. They’re substantial burdens for firms that already employ Arkansans.

Hausam has met with Gov. Mike Huckabee about the matter. He said they and Jim Pickens, interim director of the Arkansas Department of Economic Development, plan to make assistance for existing firms a priority.

They’re crazy if they don’t.