Issue No. 3, on your General Election ballot, has a special gift for the Chamber of Commerce. The gift is the opportunity to get your city and county tax money. Issue No. 3 changes the Arkansas Constitution to let the Chamber eat at the public feed trough.
Arkansas Constitution, Article 12, § 5 says: No county, city, town or other municipal corporation, shall become a stockholder in any company, association, or corporation; or obtain or appropriate money for, or loan its credit to, any corporation, association, institution or individual.
Despite the Constitution, some cities were sending money to the Chamber of Commerce in the name of economic development. In 2015, a Pulaski County court ruling declared payments from two cities of Pulaski County to the local Chamber of Commerce amounted to illegal donations to a private entity prohibited by Article 12.[i]
With the Chamber’s endorsement being very important to legislators, it was no surprise the Chamber was able to get legislators to include a provision for the Chamber in Issue No. 3 to overcome the restriction in the Constitution. The provision for the Chamber appears in Section 1 of Issue No. 3. (Full text of Issue No. 3 also known as SJR 16).
BEFORE YOU VOTE CONSIDER THESE FIVE QUESTIONS:
- Do you think local politicians will be able say “no” when the Chamber wants your local tax money? Remember many politicians rely on getting an endorsement from the Chamber.
- Did you know the House Cosponsor of the proposal, Representative Eads, works for the Chamber of Commerce and is in charge of economic development, the very division of the Chamber that would benefit from getting into the public feed trough?
- Do you always agree with who the Chamber endorses for political office or with all the political issues the Chamber supports? Your Chamber of Commerce is a good organization, but citizens in many cities have battled their local Chamber of Commerce on local issues such as proposed tax increases. There are other issues such as the State Chamber’s support of Obamacare Medicaid Expansion that have drawn the ire of taxpayers.
- Did you know a city or county can do economic development work themselves or even cooperate with other local governments? Bella Vista ended its $40,000 a year payment to the Chamber and declared it will do economic development work through city employees.[ii] Imagine that … a city controlling its own money.
- Did you know Issue No. 3 also opens the door to private and other corporations to get your local tax money under the banner of doing economic development work?
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The special provision for the Chamber isn’t the worst part of Issue No. 3.
Currently, the Arkansas Constitution allows the state to issue bonds for incentives to big businesses for so called “super projects” but the Constitution limits the amount of those bonds to no more than five percent (5%) of Arkansas’ General revenues. Issue No 3 is financially irresponsible because it removes all limits on how much debt the state can take on to give those incentives to big business. (See CFA article: Issue No. 3 allows unlimited state debt without a vote of the people)
The popular name of Issue No. 3 says: “An Amendment to the Arkansas Constitution Concerning Job Creation, Job Expansion, and Economic Development.”
Notice the popular title only talks about jobs and economic development and says nothing about taking on more debt and providing local money to the Chamber and other organizations. The ballot title isn’t very helpful either. See ballot title in notes below[iii]
We think a better name is:
Issue No. 3 = “R.O.B. Amendment” – “Risk Our Budget”.
[iii] Ballot Title of Issue No. 3:
AN AMENDMENT TO THE ARKANSAS CONSTITUTION TO ENCOURAGE JOB CREATION, JOB EXPANSION, AND ECONOMIC DEVELOPMENT; REMOVING THE LIMITATION ON THE PRINCIPAL AMOUNT OF GENERAL OBLIGATION BONDS THAT MAY BE ISSUED UNDER AMENDMENT 82 OF THE ARKANSAS CONSTITUTION TO ATTRACT LARGE ECONOMIC DEVELOPMENT PROJECTS; AUTHORIZING A CITY, COUNTY, TOWN, OR OTHER MUNICIPAL CORPORATION TO OBTAIN OR APPROPRIATE MONEY FOR ANY CORPORATION, ASSOCIATION, INSTITUTION, OR INDIVIDUAL TO FINANCE ECONOMIC DEVELOPMENT PROJECTS AND TO PROVIDE ECONOMIC DEVELOPMENT SERVICES; AUTHORIZING THE ISSUANCE OF BONDS UNDER AMENDMENT 62 OF THE ARKANSAS CONSTITUTION FOR ECONOMIC DEVELOPMENT PROJECTS; AUTHORIZING THE TAXES THAT MAY BE PLEDGED TO RETIRE BONDS ISSUED UNDER AMENDMENT 62 OF THE ARKANSAS CONSTITUTION FOR ECONOMIC DEVELOPMENT PROJECTS; REMOVING THE REQUIREMENT OF A PUBLIC SALE FOR BONDS ISSUED UNDER AMENDMENT 62 OF THE ARKANSAS CONSTITUTION FOR ECONOMIC DEVELOPMENT PROJECTS; AND AUTHORIZING COMPACTS FOR ECONOMIC DEVELOPMENT PROJECTS AMONG CITIES OF THE FIRST AND SECOND CLASS, INCORPORATED TOWNS, SCHOOL DISTRICTS, AND COUNTIES