News today that the state and local governments were pouring millions of public money to entice a food wholesaler to expand its warehouse in North Little Rock has occasioned a Democratic Party swipe at Republican gubernatorial candidate Asa Hutchinson. He deserves praise for an utterance in question.
Ben E. Keith said it would add 74 jobs (the projected hourly wage rate inflated to an unknown degree by including executive salaries in the computation) in a $60 million expansion in which the state is giving $2.27 million in cash, plus additional tax subsidies,North Little Rock is giving at least $400,000 and other government sources are kicking in still more. In my business, if we could get the government to pay 5 to 10 percent of our overhead it might mean a real profit at the end of the year.
Anyway, the Democratic Party quotes Asa Hutchinson as once having termed the governor’s quick action closing fund, from which he wrote a seven-figure check to Ben E. Keith, a “slush fund” and a “kitty” for the governor. Asa Hutchinson spoke the truth. It is corporate welfare, no more or less, controlled by a single man, not the democratic process. As a matter of policy, Arkansas voters seem comfortable with this concept of providing welfare to exceedingly rich and prosperous corporations while decrying help with food and medical care for poor people.
Says the Democratic Party, quoting from commentary at Talk Business by Michael Cook:
Here’s what Chamber of Commerce leaders say about this fund:
“Thousands of jobs and dozens of projects in every corner of our state can be traced directly back to this incentive.”
Hutchinson has a bad habit of opposing Chamber of Commerce ideas and plans. Hutchinson recently likened a Chamber tax cut proposal as something President Obama would propose, and it wasn’t meant as a compliment.
But in a recent Talk Business post, Hutchinson seemed to express support for the Quick Action Closing Fund if certain pre-conditions are met.
I guess Hutchinson was against effective economic development tools before he was for them.
I’m not ready to hail Asa Hutchinson as a tribune for efforts to tear down the corporate welfare system nor ready to see him as a foe of the chamber of commerce. As governor, I expect he’d love the quick action closing fund if he held the checkbook. His record is far more in line with the chamber of commerce political playbook than that of the AFL-CIO. But reflexively blast him for uttering a word or two of exception to the chamber of commerce power structure in Arkansas and its love of taxpayer freebies? Not me.
The news release reminds me that there needs to be a hard look at direct benefits from municipal corporations to private enterprises. The Arkansas Constitution nominally seems to prohibit that. But, as we’ve learned this week, adherence to the Constitution waxes and wanes with philosophical preferences.