Michael Wickline at the Arkansas Democrat-Gazette reports that an advisory committee appointed by Governor Hutchinson decided today to spend about $165 million of the state’s remaining $287 million in COVID-19 federal aid money to cut businesses’ unemployment insurance cost.


Of course it did.

The money will go into the unemployment trust fund and thus prevent roughly $10 million in new taxes for businesses.


Sen. Will Bond and Rep. Fred Allen, both Little Rock Democrats, objected to a rushed decision without thinking about other state needs.

Fair point. This is a state that has refused meaningful rental assistance to the pandemic unemployed. It is a state that isn’t willing to push for six weeks of the extra federal unemployment benefit of $300 a week. It has exempted employers from liability for sick workers. And on and on. Business comes first, last and always in Arkansas. The working poor? Cannon fodder.


You can watch it at the YouTube link. Note that this was a hurry-up vote that required suspension of rules for the measure to be considered. Secretary of Mike Preston pressed for the expenditure. Previously, no more CARES Act money was to be spent before Oct. 1.

Bond said it wasn’t an emergency. There’s still more than $600 million in the unemployment trust fund. The CARES Act money is supposed to address pandemic costs. There are businesses the state hasn’t helped yet — teachers and schools, for example, he said.

“We should use the money more wisely to directly help businesses that have been shuttered or about to be shuttered,” Bond said. He noted that the added cost would be relatively small, about $10 per worker, or only $100 a year for a 10-person business. In other words, the benefit will go to the biggest employers. He noted, too, that Arkansas has the shortest period of unemployment benefits, 16 weeks, in the country.

Allen said this issue should have been brought up weeks ago because it’s always been understand spending down the trust fund could mean a cost assessment on employers to maintain it. “The majority of the people that are going to benefit this are big business, correct?” Allen asked. Preston acknowledged that was so. DF&A Chief Larry Walther said the cost was proportional, so it would be as harmful to a small employer as a larger employer on a percentage basis.


“If you talk to anybody who owns a business, this is going to be a big issue to them,” Preston said.

Allen said it could have been more transparent and was coming “at the 11th hour.”

This is nuts. $165 million that could have directly aided hurting people instead was taken off the table to create a $10 million business tax cut overwhelmingly favoring the biggest employers. Walmart, Tyson, etc.