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Beebe willing to consider change in superproject incentives Tuesday, Jun 24, 2008 By John Lyon Arkansas News Bureau LITTLE ROCK - Gov. Mike Beebe said Monday he is willing to look at changing Arkansas' system for providing incentives for "super projects." Beebe told reporters he is open to the possibility, raised recently by incoming House Speaker Robbie Wills, D-Conway, of revisiting Amendment 82, which allows the state to issue bonds to provide incentive funds for projects that will invest more than $500 million in capital expenditures and hire at least 500 new employees in the state. Also Friday, the governor also said he will ask the Legislature next year for more money for his quick-action closing fund but would not consider cutting the state's income tax rate to attract new businesses. Wills has said the superprojects amendment is geared toward attracting manufacturing jobs, but with a lower investment threshold the state would be better able to attract knowledge-based industries that provide good, high-paying jobs but do not meet the $500 million, 500-job requirement. "Robbie's got a point, that things change, and as they change our flexibility needs to be able to be there to respond to it," Beebe said Monday. "So I'll certainly work with Robbie to see what changes need to be made in that regard." The state has not made use of the amendment since it was approved by voters in 2004. Beebe said he has to be judicious in issuing general obligation bonds. "When we do bond something, I just don't look at that. I have to look at the general revenue necessary to defray those bonds, because in effect it becomes a line item in your budget that can affect everybody else's budget," he said. A vote of the people is required to amend the Arkansas Constitution. Proposed amendments can be referred to voters by the Legislature or through a citizen initiative. Beebe's remarks came four days after Hewlett-Packard announced it would open a customer service and technical support center in Conway, creating up to 1,200 new knowledge-based jobs with starting pay of about $40,000 a year. Hewlett-Packard was lured to Arkansas in part by an offer of $10 million from the governor's quick-action closing fund. Beebe said Monday he will ask the Legislature during next year's session to put more money into the fund, which he said has been virtually depleted. The fund was created last year with $50 million in funding. Beebe said he did not know how much more money he would request, but that the amount would be significantly less than $50 million. The Conway Development Corp. will provide a $28 million facility for Hewlett-Packard to lease. The city of Conway offered an additional incentive of $2.2 million and previously spent $5 million developing the industrial park where the facility will be built. Wills said Monday that Conway was fortunate to be able to offer those incentives, but many communities in Arkansas are not so fortunate. Cities such as Batesville, Booneville, Clarksville or Monticello would be better able to compete with communities in other states if the investment threshold for superprojects were lower, he said. "What would a plant with 150 jobs or 300 jobs or $150 million to $200 million in investment mean for a community like that?" Wills said. He said the announcement earlier this month that Verizon Wireless will acquire Little-Rock based Alltel Corp. highlights the need for Arkansas to do all it can to attract knowledge-based industries. "Otherwise, these folks (at Alltel) who may become unemployed are going to leave the state and go be productive somewhere else," Wills said. Alltel CEO Scott Ford said last week that Arkansas has a disincentive to investment in the form of its top personal income tax rate of 7 percent. Out-of-state entrepreneurs may prefer to go to Texas, Tennessee or Florida, where they would not have to pay the income tax, Ford said. Responding Monday, Beebe said Florida, a tourist destination, gets a large amount of its revenue from sales taxes. Also, all three of the states Ford named have higher property taxes than Arkansas, the governor said. "Frankly, we don't have an option in terms of cutting the income tax," he said. "All you have to do is look at our numbers, look at our revenue. We don't have those other sources of income." A property tax increase is not going to happen, Beebe said, adding, "Arkansans hate property taxes worse than the Texas Longhorns." ------- The Associated Press contributed to this report. |
