CORPORATE WELFARE R US: The Springdale Chamber of Commerce springdale.com

Keep on eye on this. The Arkansas Democrat-Gazette wrote today — too benignly — about cities in Arkansas getting more heavily into the corporate welfare business.

Thanks to the felonious former Sen. Jon Woods, who was abetting his friends at the Springdale Chamber of Commerce, we were already in the local corporate welfare game. After courts struck down local government tax giveaways to chambers of commerce as unconstitutional, Woods stepped up with a constitutional amendment legalizing taxpayer handouts to unaccountable private organizations like chambers of commerce in Springdale and elsewhere. In Little Rock, taxpayers lay out $300,000 annually from the city alone (and more from other publicly financed sources) to pay the salaries of people at the chamber who lobby against policies beneficial to workers and in favor of such good deeds as state takeover of the local school district.

Advertisement

Anyway, the situation is about more than poor-folk-subsidized corporate lobbyists. The cities also plan to use the power of the amendment to get into direct corporate welfare — handouts of public cash (mostly from cash produced by regressive sales taxes that hurt the poor) as so-called economic development incentives. There hasn’t been a serious study yet that favors tax policy or handouts over more important issues in business location — work force, education, raw materials, access to markets and so on. Sure. A business will take cash gratuities and of course they’ll say “thank you” by touting their importance.

It’s bad policy. It also favors rich cities over poor cities. And it also promotes mutually assured destruction — bidding wars for businesses that hop from one city to one next door, with no benefit in increased local economic activity and a concurrent reduction in money available for public services. See, for example, the huge handout given to move jobs from Overland Park, Kan., over the border to downtown Kansas City. Now Missouri wants a truce:

Advertisement

Missouri taxpayers spent around $151 million over the last decade luring companies from Johnson and Wyandotte counties in Kansas a few miles across the state line to Jackson County.

And according to research by the Hall Family Foundation, Kansas reciprocated by spending $184 million enticing border-hopping companies to flee Jackson County for Johnson and Wyandotte.

It’s an economic border war that’s raged for years in the Kansas City metro. And to its critics, it’s long past time for a truce.

The D-G article on Springdale’s expanded economic development “toolbox” — there’s another popular word I’d like to see retired, along with “break down” for explain — did touch on potential local competition. Say Springdale and Fayetteville. Not to worry, Fayetteville chamber exec Steve Clark said. Springdale is just a blue collar place, he seemed to sniffily suggest.

Fayetteville’s Chamber of Commerce may develop such a document. Chamber President Steve Clark said he’s sure it’ll look different from Springdale’s.

Fayetteville’s guidelines might address entrepreneurs who are ready for the next step in investment, he said. Most of the chamber’s 3,900 business members employ 25 or fewer people, he said.

“So if we start using what Springdale has, we’ll never help anybody,” Clark said. “This is just the kind of business we want. We’ll never get an automotive manufacturing plant in Fayetteville, and that’s OK with us.”

Really?

Advertisement