Noted: Full agreement between the Arkansas blog and the Arkansas arm of Americans for Prosperity, the Koch-financed political operation that spent huge sums to turn the Arkansas legislature red.
AFP issued a statement yesterday critical of the proposal for Arkansas to spend $120 million over the next 20 years (counting interest) to give Lockheed about $84 million toward cost of fitting out an existing plant in Camden to build a tactical vehicle for the Army and Marines. It is in competition with two other more experienced makers of military vehicles. It had claimed three years ago that it could save money by making the plant in Camden and closed a plant in Texas in preparation for making prototypes in Camden. Nobody mentioned then, however, that the lower cost would come through an Arkansas taxpayer handout.
This corporate welfare — blessed even by such anti-welfare paragons as Tom Cotton — is going to pass through the legislature like the proverbial corn through a goose. Intone the word “jobs” in Arkansas and you are generally held harmless.
But AFP at least pays lip service to the free enterprise system that conservatives extol even as they stick their hands out to grub taxpayer subsidies.
This corporate handout is $87 million in new debt for Arkansas, AFP notes. Jobs are needed in Arkansas, it says, but better to create them with more systemic encouragement (cut taxes and regulation, in other words.)
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.
Americans for Prosperity Arkansas opposes this misguided corporate handout, and encourages lawmakers to vote NO on this risky and expensive legislation. Under the terms of this proposal, each job created by the Lockheed Martin project financed by the bill would cost taxpayers approximately $145,000 – hardly a bargain for Arkansas families.
Arkansas taxpayers should not be fronting the money for one of the largest and most successful companies in the world. Indeed, Arkansas families and entrepreneurs would be far better served by broad-based tax and regulatory reforms that create a more favorable business environment for everyone than by spending tens of millions of dollars on government-financed ‘incentives’ to lure particular projects or corporations to the state.
One correction. The cost per job, when you factor in the interest payments on the bond — $30 million or so depending on term and market rates — the cost per job is actually much higher — well more than $200,000 per job.
It appears that the state believes new revenue from payroll income taxes and perhaps other benefits will offset the $6 million annual hit to the treasury to make the bond payments. That’s wishful thinking. But there’s a lot of that, including unsupported talk of ancillary industries and unspecified claims that other states are also paying to support competitors’ bids. I wish the Hutchinson administration would provide more data on that. And also explain why the 11th-hour arrival of a need for corporate welfare — and an Arkansas taxpayer subsidy of the U.S. government’s defense contract — became necessary several years into the process.
David Ray of AFP and I waste my breath, however. This deal is cooked.