Last year the Arkansas Economic Development Commission agreed to offer financial incentives for 133 new projects.
They will create an estimated 3,460 jobs with average salaries of $21.81 an hour. The companies that received financial incentives from the state will invest about $3.184 billion in Arkansas.
Legislation approved in 2001 requires the AEDC to submit regular reports to lawmakers detailing the effectiveness of the numerous tax incentives and financial assistance programs that state government uses to recruit industry. Also, the AEDC reports on the economic climate in Arkansas compared to neighboring states.
After AEDC officials signed agreements in 2017 to provide assistance for 133 new projects, it increased the total of AEDC projects to 256. That compares to a total of 206 projects in 2015 and 210 projects in 2016.
Signing 133 agreements last year represents a tremendous improvement over recent years. In 2015, the AEDC signed offers with 118 companies and in 2016 it finalized agreements with 88 companies.
The total investment value of the 256 projects in Arkansas that received AEDC assistance is more than $7 billion. The total number of jobs added to the Arkansas economy since 2015, with help from AEDC programs, is 12,805. Their average salary is $20.81 an hour.
According to U.S. Commerce Department figures, jobs created with the assistance of AEDC incentives pay higher average salaries than other Arkansas jobs.
The unemployment rate in Arkansas in May was 3.8 percent, near to historic lows.
The legislature has approved numerous incentives to help the AEDC recruit new industries, and to encourage existing industries in the state to expand.
Some incentives are based on payroll, so a company that creates high-paying jobs will qualify for more tax breaks.
Other incentives, particularly in the manufacturing sector, offer sales tax exemptions for equipment and machinery, and for electricity and natural gas costs. Other incentives specifically target high-tech firms, and offer tax incentives for their research and development costs.
The state also offers help with job training and infrastructure, such as rail spurs, water and drainage systems, preparation of land and access roads.
Two years ago, Arkansas voters greatly expanded the state’s capacity to issue economic development bonds when they approved Issue 3, which had been placed on the ballot by the legislature.
The constitutional amendment removed the former cap of 5 percent of general revenue that limited the amount of general obligation bonds the state could issue at one time. Removal of the cap allows the state to finance more than one large project at a time, if the legislature approves.
The amendment also granted local governments more flexibility to issue economic development bonds, by allowing them to work with local chambers of commerce and in collaboration with neighboring cities and counties.
The AEDC has programs specifically designed to promote small businesses, innovative technology businesses and firms owned by minorities and women. Also, it has an office that works to promote the filming of movies in Arkansas, and an office that works to expand and strengthen military installations.