KAIT-TV reports on a vote by the Mississippi County Quorum Court to pour another $1.8 million in tax money into the pockets of the owners of Big River Steel, which is expanding its mill. The deal will pay $18,000 for every new hire in Mississippi County and $9,000 for hires in neighboring Missouri counties.
Was Big River going to expand its mill somewhere else? Must tribute be paid businesses to hire locally?
Does a company that was half-purchased by U.S. Steel for $700 million in CASH need assistance from the sales tax paid on burgers and necessities of life in Mississippi County? Does a company in which the Koch billions are invested and which recently announced a further agreement with a Koch industry need a helping hand?
Wasn’t an initial $125 million loan from the state and tens of millions in other taxpayer-financed incentives enough (including $14 million in local incentives) on the front end?
Sure, it’s a job creator. So is every business in Arkansas, but they aren’t lavished with money like these guys.
On the other ha d: Maybe $18,000 per job is a bargain.
‘ve just come across a prospectus from Czech gunmaker CZ Group to raise money for a manufacturing plant in Little Rock that may employ 300 people at the Little Rock Port within five years.
The prospectus isn’t wholly rosy about the Little Rock project. It may be delayed or not constructed as planned, the prospectus said, because of a variety of risk factors including coronavirus. The company also said it can’t promise that building a plant in the U.S. to qualify under federal law to sell to U.S. agencies will necessarily guarantee such sales.
Little Rock itself might no be an ideal location, the prospectus indicated
… the area has only limited manufacturing history and a low number of companies operating in the area of manufacturing and (more importantly) machining. This could therefore pose a significant risk for the Group to find enough skilled workers for its operations.
But there is a bright side: Corporate welfare.
The prospectus said the state of Arkansas has promised $23.4 million in incentives (counting training, tax credits, land and a forgivable loan), which is counted in the $60 to $70 million project cost. Pretty good taxpayer-provided leverage — a third or more of the total cost.
The math — IF 300 jobs are created in five years — $78,000 per job.
Big River Steel looks like pikers. And they have a mill up and running. CZ hopes to be in the gun making business in Little Rock by the end of 2021.