On June 3 in this publication, a rather critical opinion piece appeared regarding Arkansas' efforts to create job opportunities for its citizens.
Without recounting what I believe to be specific misleading conclusions drawn by the author, I would like to address one such contention that Arkansas is focused exclusively on creating jobs instead of enhancing economic growth.
Since Gov. Asa Hutchinson took office in January 2015, our focus at the Arkansas Economic Development Commission has been in growing our state's economy by creating a business climate that is conducive and accommodating to our changing global economy. We've worked to reduce burdensome regulations and, yes, to offer appropriate incentives to help us compete on the global stage for good-paying jobs that contribute to our state's thriving economy.
Take, for example, the Create Rebate incentive. It's a discretionary incentive that is available for a maximum of 10 years to companies that add $2 million in annual payroll. As a result, those employers will receive an annual rebate payment equal to a maximum 5 percent of payroll. High unemployment counties in the state receive a larger percentage. The rebate money is then re-invested in the companies and in the local communities.
Advantage Arkansas and Tax Back are two statutory incentives that are among the most commonly used and accessible. The former is a state income-tax credit for job creation based on the payroll of new, full-time, permanent employees hired as a result of a new location or expansion. The latter provides sales- and use-tax refunds for building materials, taxable machinery and equipment for new and expanding industries, which also are creating jobs.
Incentives allow Arkansas to be competitive and have helped our state achieve unprecedented job and economic growth. The proof is in the numbers.
As of this writing, Arkansas' unemployment rate sits at 3.5 percent, which is well below the national average for the 17th consecutive month.
Since Governor Hutchinson took office, 70,200 more Arkansans have found employment. Also during that time, the Economic Development Commission has worked with 250 new and expanding companies that are generating more than $4 billion in new capital investment and creating 10,000 new jobs paying an average of $45,000 annually, thus improving the standard of living.
Our growth comes from our ability to attract industries that were once not operating in any significant way in Arkansas.
The steel industry, for instance, has found a home in Northeast Arkansas on the banks of the Mississippi River. Nucor Steel in Blytheville, Nucor Yamato in Armorel, and Big River Steel in Osceola have shunned America's traditional steel belt near the Great Lakes region and have selected Mississippi County in which to do business. It's a sector where job growth has grown 39 percent in the last eight years, with more than 5,500 people now directly employed in steel with wages well above the state average.
Tech industries are also selecting Arkansas for a home base because of our ease of doing business, our low cost of living, and our technology talent. Students at every public and charter high school in the state can now take computer science courses thanks to initiatives to introduce such career choices earlier.
Additionally, foreign direct investment in Arkansas has grown more than 41 percent in the last five years. Your state economic development professionals will get on a plane and fly anywhere in the world to find good-paying job opportunities for Arkansans. We have economic development offices in Japan, Germany and China.
China, as a matter of fact, has become a strong partner for our state. Chinese-based companies view Arkansas as a safe investment, and since 2015, we have secured agreements with four Chinese companies to locate here for a total investment of $1.425 billion and 1,520 new jobs.
Cited here are real examples of economic growth, not hypothetical.
Is there more that can be done to help our state prosper? Certainly. Should we consider broad, fundamental tax reform? Of course. Can we provide even more regulatory relief? Absolutely.
Is Arkansas' poverty rate still unacceptably high? Yes, but we're working to improve it.
In comparison to other states, Arkansas is in a strong competitive position. Those of us at the Arkansas Economic Development Commission will work every day to utilize all of our available resources to bring good-paying job opportunities to the state and help create an even better quality of life.
That's the mission of our governor and our agency.
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Mike Preston is executive director of the Arkansas Economic Development Commission.
Editorial on 06/19/2017