Category: Economic Development

The Circle Won’t Be Broken: Beebe Sings Bass, Searcy Paper Sings Tenor

Well, a story in today’s Searcy paper is raising some eyebrows:  Governor Beebe now says he “won’t push” for the Searcy bypass project.

This comes after Judge Lincoln told voters last week that Beebe played a role in crafting his failed tax plan to fund White County’s portion of the project.  According to Lincoln, “Governor Beebe wanted us to form a strategic plan, and the tax/bypass was part of our strategic plan.”

So what gives?

From the story:

“I’m obviously for the Searcy bypass project, but I’m not going to ask the highway department to spend money they don’t have.  If they don’t have the money, they’ll have to make adjustments.”

He went on to say, he really should stay out of it because it’s not really any of his business, but he’s involving himself anyway:

“I’m not in any position to rank all the highways in the state of Arkansas.  That’s what the highway commission is for. Obviously, I have a little prejudice in favor of Searcy because that’s where I’m from, but I still have to govern the whole state.”

And while staying out of it, Governor Beebe added:

“It’s really sad. It’s sad for Searcy. It’s sad for any projects around the state.”

So, to summarize:  He’s going to stay out of it because he’s not really in any position to rank the projects, but he fully supports the project, but he’s not going to add any pressure to the commission to do the project, but he does have prejudice in favor of Searcy, and he’s going to stay out of it, but it’s really sad for Searcy.

And believe it or not, this is all those evil Republicans’ fault because they blocked the trucker tax exemption repeal!  Specifically, the governor says it was Searcy’s Senator Jonathan Dismang’s fault.  How convenient, seeing as how one of Beebe’s friends is running against Dismang this year.

Two entities deserve to be scolded for this joke of a political move.  First of all, the governor.  What the heck, dude?  Jerking your hometown around like this?  You’re using a local hot potato issue and holding it over the heads of Searcy citizens to bully votes out of Senator Dismang and/or to punish him.  Of course this is nothing new–politicians have playing these games for years.  But this is a reach, even for you and besides, I thought you were against DC politics?

Governor Beebe admits himself he has no control over this issue, and he should probably stay out of it, so he should do it.  All indications from the state–except from the governor himself, of course–are that the project will go forward.  He is beating a dead horse, and a controversial one at that.  This is politics at its worst.

Secondly, shame on our beloved Searcy paper.  They continue to sing right along with the Democrats’ narrative.  They are accepting Governor Beebe’s premise that the project remains in peril because of conservative efforts to stabilize the state budget and framing these issues in such a manner that reflect poorly on Senator Dismang.  They want to continue the work that they started against me and other local conservatives last fall:  “Evil, heartless conservatives are the ones who are holding this bypass project back.  Conservatives are the ones holding back ‘progress.'”

What the paper is doing is shameless.  They’re giving Governor Beebe a pass on provably false statements so they can continue to advance the narrative that conservatism hurts progress.

If I had made the same types of false statements that the governor made, I would be ridiculed and mocked, disparaged as a ‘local conspiracy theorist.’  But the paper doesn’t question the governor because his comments advance their agenda of silencing conservative voices & distorting the truth.

I’m not sure who is singing the lead, but there’s no disputing that the paper and Governor Beebe are singing the same song.

I have contacted Senator Dismang for comment, as well as Searcy city officials.  We’ll keep you posted.

Arizona Considers Eliminating Capital Gains Tax

The state of Arizona may be on the verge of strong economic growth.  Why?  They’re considering eliminating their capital gains tax.

A similar proposal was put forward by conservatives in the Arkansas House last year, spear-headed by Rep. Ed Garner, and I strongly suspect it will be a topic of discussion once again in the 2013 legislative session.

Some facts about the capital gains tax, from Goldwater Institute:

  • States that have lowered their taxes on capital gains have seen higher investment and ultimately, job creation.
  • When New Mexico, dropped capital gains taxes to a lower rate than standard income tax rates, venture capital nearly quadrupled.
  • Between 2000 and 2007, states that had low capital gains taxes had job creation rates that were 35 percent higher on average than the states that tax capital gains at higher rates than ordinary income.
  • Goldwater estimates that elimination of the tax could increase investment in Arizona by $30 million in the first two years and create more than 3,000 new jobs by 2016.

As Stephen Silvinski explains,

Taxation of capital gains is, among other things, a tax on entrepreneurship. Businesses – new businesses especially – need investment to flourish.

And of course, as I always say: Businesses don’t pay taxes. Consumers do.

If Arizona passes the bill (HB 2815) they would be the first state to completely abolish the tax. Hopefully Arkansas will follow suit.  3,000 jobs sound pretty good about now.

 

Nic Horton

Anti-Gas Tax Rally Thursday on Arkansas Capitol Steps

I received a news release from the folks over at Stop The Gas Tax AR, a group that has formed to oppose Sheffield Nelson‘s severance tax hike.

The release announces a rally this Thursday at 12:30 p.m. on the state capitol steps to “let Arkansans know what’s really at stake here:  jobs, future business development, and continued economic growth in our communities.”

The rally is said to feature Arkansas mayors, county leaders, gas producers, and royalty owners.

Isn’t it interesting that the Municipal League, who is always calling for ‘more economic development,’ is now supporting this massive tax hike which will cripple job growth & hurt Arkansans who own gas royalties.  Perhaps their agenda isn’t really economic development.  Perhaps it’s raising taxes & growing government?  Just a thought. (I seem to remember some nut-job raising this point before, a few months ago)

Thankfully there are a group of chambers of commerce from around the state, including Searcy’s, that have banded together to oppose the tax hike.  Rich Moellers of the Morrilton Chamber said it pretty well in this interview:

The Natural Gas Severance Tax Act proposed by Mr. Nelson would erase the industry’s margins and result in good companies moving operations to other parts of the country where they can make money and provide jobs. This bill is a jobs-killer.

The County Judge’s Association of Arkansas has also voted to oppose the increase.

You can join Stop The Gas Tax on Facebook & Twitter.

 

Nic Horton

“Vote for Roads and Jobs Committee” Forms in Searcy

I am a little late on this, but it looks like the “Vote for Roads and Jobs Committee” was formed on October 14 with the Arkansas Ethics Commission.  Unfortunately, they seem to be having problems with their filings, much like our friends on the “Moving White County Forward Committee” had.

That committee was apparently chaired by Reynie Ruteledge, owner of First Security Bank, but the filings were a bit murky, never specifying Ruteledge’s exact title.  Searcy Chamber President Buck Layne was their Treasurer and they failed to report any expenditures–or even file as an official committee–until one week before election day.

The new group’s initial filing did not list any officers, but does list Layne as a member.  The initial report was then amended three days later to list Layne as Treasurer and Stuart Dalrymple as chairman.  Dalrymple is a local real estate agent who bankrolled much of the “Moving Forward” committee’s efforts.  He has already given $1,000 to this committee.

Both of the new committee’s filings fail to state whether the committee is for or against the recent proposal, but I think we can figure that out.

An interesting discovery:  the committee’s location is listed as 2323 South Main St., Searcy, Arkansas, which is the address of the Searcy Chamber of Commerce.  Given that the chamber receives a large sum of taxpayer money (at least $40,000 from the city of Searcy, the last time I checked), I wonder if any of the chamber’s resources are being used in promotion of this tax or if the chamber plans to report those expenses?

I will be doing some more inquiring into this.

Nic Horton

‘Obamanomics’ is Not the Answer for Arkansas Cities, Counties

A story in today’s paper summarizes a panel discussion that was hosted by the Searcy Rotary Club on Tuesday.  The panel was made up of three local bankers and the topic was our local economy (Searcy and the greater White County area).  The comments reported in the story demonstrate a mentality that has taken deep root in our community and or country as a whole over the last several years:  “government creates jobs.”  

Now, I have not come out publicly in favor or opposition of this tax.  I can see merits on both sides of the issue.  But rest assured, if I decide to vote for the tax, it will not be because I believe I am voting ‘for jobs,’ as the proponents’ signs assert.  I have been watching this debate unfold and staying relatively quiet about it, but these claims deserve to be analyzed.

Folks: Government does not create jobs.  Taxes do not create jobs.  Bypasses do not create jobs.  And if voters really believed this theory, don’t you think they would be tripping over themselves to go vote for higher taxes? (Hint: they’re not)

To anyone who thinks that government spending or taxation creates jobs, I encourage you to look at the results of the Obama administration’s economic policies over the last 3 years.  A stimulus package of $800 billion, full of infrastructure spending, that was promised to keep unemployment below 8%, has failed miserably.  Almost three years after its passage, we are still feeling the negative effects as job growth is nonexistent and unemployment remains at 9%.

So now we have a group of politicians and bankers in Searcy/White County (and across Arkansas) who think that raising taxes–pulling more money out of the private sector and putting it into government–is the only way we can get our community growing again.

Here is a sampling of some of the statements in the article:

  • “We need to keep our infrastructure moving forward and the best way to do that is to vote yes for the highway connector.”
  • “Some of the opponents of the tax think that the reason the bankers are supporting that tax is because the banks will get all of the money, and that’s just not true,” he said. “We have to be visionaries because this tax supports where we work and where we live.”
  • “There is still construction going on and there are still businesses coming into town,” he said. “There are still people that want to live in Searcy.” (so why do we need a tax to encourage growth that is already happening?)
  • “I’m not a big believer in taxes, but the return on this initial investment is like a 401K match on steroids. I think this bypass will help Searcy become a town of choice for Little Rock commuters.”

I could nitpick these statements, but I think they speak for themselves.

There have been public comments made about this project by elected officials whom I trust, but I think they severely miss the point on this issue.  Taking $15 million out of the economy and giving some of it back to contractors (who many believe will be from out of town) and putting a lot of it in asphalt will not create anything except a road.  You’re taking from Peter and giving to Paul.  You are rearranging money in the local economy, and actually sending some of it out of the local economy.  This is a net of zero, or more realistically, a loss for the private sector.

Now, there is no doubt that strong infrastructure is an important part of economic development, and I believe this project will encourage growth in the city, but it is not going to create anything by itself.  It must be coupled with a real plan for economic development other than ‘let’s raise taxes!,’ that would include aggressively recruiting industries, facilitating relationships with site consultants, etc.  Also, being located relatively close to an interstate, a river, or a large metropolitan area are key factors for sustained growth.  But this idea that Searcy can ‘become Conway’ or ‘become an industrial powerhouse through tax increases’ is just silly.  Searcy is not Conway and it never will be.  We are a very different landscape and its past time we start being honest about that. (I am going to follow up with more on this later this week)

At the end of the day, passing a tax increase during a recession for any reason is not going to stimulate anything.  I understand that using the label “JOBS JOBS JOBS” is going to be popular during a time when everyone wants to be employed, and 10% of Americans are not.  But just because the Arkansas Municipal League says that raising taxes is the only way we can grow our local economies does not mean it is true.  I reject that assertion on its face.

If you want to vote for the bypass project, vote for it.  More power to you.  But please be informed and do not vote for a tax based on a failed economic theory that more money in the government means more jobs for you.

Again, I have not spoken for or against the proposal, but I think we should have an honest debate, and it is far past time that we had a serious discussion about real economic development in our community.  I want it just as badly as the rest of you.  I just want it to be real.

Nic Horton