$148 per person — that’s the amount of money, on average, that the state of Arkansas spends per year on corporate welfare, according to a new report from The New York Times. That’s more than Mississippi, Alabama, Georgia, and Missouri. In fact, The Show Me State just to our north spends just $16 per capita on subsidies — nearly 90% less than Arkansas. I tend to think this debunks the Arkansas Economic Development Commission’s Grant Tennille who thinks we must continue this large-scale redistribution in order to stay competitive with neighboring states.
During my time here at The Arkansas Project, I’ve written a great deal about this cronyism, often referring to the harmless-sounding “economic development fund” as a “slush fund.” The poster child of cronyism or corporate welfare in our state is LM Wind Power — and I’ve extensively documented how they’ve wasted your money. But the concerns surrounding handouts to companies like LM Wind Power aren’t completely practical or pragmatic — they’re philosophical. That is to say: I’m not opposed to LM taking millions from the taxpayers because they’re now bleeding jobs and all the money is gone. I’m opposed to LM taking millions of taxpayer dollars because it’s a perversion of the free market system and it’s immoral. The fact that they’re bleeding jobs and wasting the money we give them is only further evidence that these handouts are unwise.
The NYT’s interactive map, entitled “United States of Subsidies,” allows users to click on a given state and see a breakdown of subsidy spending. In Arkansas, they call it “economic development,” but in reality, it’s “handouts” to businesses in the form of tax credits, tax refunds, tax rebates, and sometimes straight up cash.
(See Arkansas by the numbers to the right)
So, to be clear: For every person in Arkansas, $148 of tax dollars are given to businesses. And yes, $8.47 million in railroad subsidies. You know, for all those trains.
The data, which is based on numbers from 2010, also shows that Ash Grove Cement was the biggest beneficiary of the state’s “charity” that year, raking in a cool $35,700,000 in the form of tax credits and refunds. Lion Oil Company also received $21.8 million in the form of tax credits. Kind of makes LM Wind Power’s winnings seem like small potatoes, eh?
The $302 million spent on agriculture subsidies is the 6th highest amount of any state in the country.
So, while you’re at work this week, busting your tail to pay your bills and taxes, take solace in knowing that it’s all for a good cause — the palm-greasing of corporations.
Liberals in the state, especially our friends at The Arkansas Times, are quick to chide conservatives who favor tax cuts as being “out for the wealthy” and “bought and paid for by the corporate fat cats.” Yet they are strangely silent about ending these cronyistic policies that are hurting the people they claim to want to help. Wouldn’t that $431 million go a long way towards covering the shortfall in the state’s Medicaid program?
If you’re interested in learning more about how we can end cronyism in our state and bring real economic development to Arkansas, I encourage you to check out AAI’s Action Plan for Arkansas. A chapter on “cutting corporate welfare” begins on page 53.
What would you do with $148?