LITTLE ROCK — A fund designed to inject high-paying, technologybased jobs into the state needs more funding to succeed, some officials say.
The Arkansas Acceleration Fund, designed to advance the growth of highwage jobs in the knowledge and technology sectors of the state, was created in 2011 to act as a mechanism to fund state initiatives set up by 2009 regarding those sectors.
Policy group Accelerate Arkansas has been advocating for increased funding to the Arkansas Acceleration Fund. Accelerate Arkansas was formed in 2003 by a group of business and economic-development leaders. Its goal is to raise the state’s per-capita income to the U.S. average by 2020 through statewide initiatives.
Those programs have so far been funded by the governor’s general improvement fund. Charisse Childers, executive director of Accelerate Arkansas, said the programs have received about $25 million in funding over the course of four years, the amounts received varying year to year. But the programs need about $30 million a year, she said.
“Without predictable and recurring funding, these programs operate in uncertainty as to whether or not they can continue what they’re doing from month to month,” she said.
Accelerate Arkansas is working with Gov. Mike Beebe to secure funding through existing general revenue.
“We share common goals for the state,” said the Democrat governor’s spokesman, Matt DeCample. “He’s made no guarantees about any particular funding source, but he’s willing to continue discussions.”
Accelerate Arkansas Chairman James Hendren said he has received a mostly positive response from lawmakers.
“Once they understand what we’re trying to accomplish, they realize ‘Oh we spend so much money trying to keep things where they are, and you guys are trying to move to the future,’” he said. “They get excited about that.”
State Rep. John Burris of Harrison, a former leader of the House Republicans, said he was open to securing permanent funding for the Arkansas Acceleration Fund.
“It would be on my short list of items to try to include in general-revenue funding,” he said. “At the end of the day, the governor has to present a balanced budget, and I hope it’s in there.”
But state Senate Republican Whip Michael Lamoureux of Russellville said the Legislature has a lot of programs to consider.
“I think the task of getting it additional general revenue will be difficult, considering all the other needs that are out there,” he said. “I look forward to hearing their proposal and seeing what we can do. It’s a difficult task, but that doesn’t mean it’s impossible.”
Accelerate Arkansas is an umbrella organization for initiatives like Innovate Arkansas, the Arkansas Research Alliance and some capital investment funds. These initiatives could suffer without more funding. Jerry Adams, the president and chief executive officer of the Arkansas Research Alliance, called for more funding at a Tuesday meeting of the Arkansas Biosciences Institute board meeting. He argued that the lack of funds and instability have hurt research.
“We’ve gone on fumes for four years,” he said, adding that Accelerate Arkansas must move to secure funding while a supportive governor is still in office. “This is an important pivotal moment based on the governor’s history and legacy, but we’ve got to win this battle.”
Accelerate Arkansas’ primary goal is to increase the state’s per-capita personal income level. Hendren said Arkansas has gone from being ranked 48th in per-capita personal income at 70 percent of the national average to 44th at 82 percent of the national average.
“It doesn’t sound huge, but it is really large,” Hendren said about the growth. “We feel very good about that.”
Arkansas’ per-capita income — total income divided by the state’s population — is $34,014.
One Accelerate Arkansasinitiated program, Innovate Arkansas, actively mentors 87 companies, and the group has invested $89 million in these companies — $71.4 million of that is private investment, Childers said.
The investment has led to a growth in the client companies’ work force — from 119 to 433 employees — and a growth in the total payroll — from $3.8 million to $24.7 million. The average annual salary went from $29,159 to $57,084, Childers said.
“We want to create jobs, and we want them to be highwage jobs so we can increase our per-capita income,” Childers said.
For example, Conwaybased First Orion, the developer of the smart-phone application PrivacyStar, announced that it plans to triple its 20-person work force this year. The company’s average wage is more than $45 per hour, or more than $90,000 per year. Harrison-based tennis-technology company ReBounces has four full-time employees and one part-time worker and plans to add four more employees. The company’s average wage is 150 percent higher than the state’s per-capita income.
Both companies are supported by Innovate Arkansas. First Orion also receives some tax credits from Accelerate Arkansas initiatives.
Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville, said Accelerate Arkansas has made progress toward its goals.
“What I think of them as is a conversation changer,” she said. “When I first moved to Arkansas, which was about 12 years ago, it was still kind of a controversial idea that for Arkansas to compete effectively in the global economy, it needed to be a knowledgebased, innovative economy. Now I don’t think it’s controversial at all.”
Mervin Jebaraj, a researcher for the UA center, said Accelerate Arkansas has led to increased employment of graduates from Arkansas universities and millions of dollars in research funding.
The creation of better-paying jobs keeps Arkansans employed in the state, Hendren said.
“If you have four people making better income, they spend that money in our economy rather than somewhere else. That money turns, and other people get employed,” Hendren said. “It all kind of builds on itself.”
Business, Pages 25 on 07/13/2012