State agency returns $450,000 unspent

New development chief Preston wants commission to think like a business

Mike Preston, the new executive director of the Arkansas Economic Development Commission.
Mike Preston, the new executive director of the Arkansas Economic Development Commission.

Mike Preston, the new executive director of the Arkansas Economic Development Commission, said Tuesday that he won't spend leftover money in the commission's budget for the sake of balancing the books. Any unspent funds should and have been returned to the state's coffers, he said.

His remarks brought applause from members of Rotary Club 99, to whom he was speaking at the Clinton Presidential Center in downtown Little Rock. The 30-something Preston, who has been on the job since early April, said his goal for the commission is to create a culture change -- to get the commission and staff to think more like a business.

A core value he hopes to instill is fiscal responsibility. At the end of the past fiscal year, which ended June 30, there was a surplus of about $450,000 in the commission's budget. These extra funds came from salary savings and general operations. The commission also came in under budget in several categories, such as travel and conference fees, confirmed commission spokesman Scott Hardin.

"This is a new day in Arkansas. Let's think a little differently," Preston said. "If this copier still works, why do we need to go out and buy a new one? Those are tax dollars from the taxpayers of the state, and if we're saving money at the end of the year, it's going to go back to the state and give those monies back to the taxpayers however the governor and the Legislature feels [it should be done.]"

Preston's remarks about accountability caught the attention of one particular Rotarian, U.S. Rep. French Hill.

"I thought it was refreshing that an agency director in the state said that he would not spend all the money authorized and would turn it back, whether capital expenditure or [for] personnel," Hill said.

Both the federal and the state system encourage spending. They don't encourage saving," the congressman added.

However, the commission will soon be asking for more funding in its marketing budget to better promote the state as a place for companies and businesses to relocate and expand, the executive director said.

In regard to the state's corporate income tax structure, Arkansas is higher compared with most states.

"There are several tweaks we can make in many different areas of our tax structure to be more modernized and be more competitive with other Southern states," Preston said.

Hill agreed.

"I think it is important for the state to constantly assess its competitiveness in our corporate tax code compared to both the attraction of business internationally and domestically. I was pleased to hear that."

Any changes to the tax structure would have to be approved by the Arkansas Legislature.

Preston also renewed his commitment to increase private-sector investment, get help for the state's economically deprived rural areas and track the results of its economic development efforts.

Business on 08/05/2015

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