AN AMENDMENT TO THE ARKANSAS CONSTITUTION CONCERNING JOB CREATION, JOB EXPANSION AND

ECONOMIC DEVELOPMENT

BACKGROUND

The Arkansas General Assembly referred Issue No. 3 to voters during the 2015 Regular Session. The proposed constitutional amendment will be on the General Election Ballot in November, giving Arkansas voters the chance to improve economic development opportunities and create Jobs for Arkansas in communities across the state. 

Right now, the Arkansas Constitution includes a patchwork of economic development language and definitions, making it difficult, and in some instances, impossible, for local communities to take full advantage of many of the state’s most valuable job creation tools. This amendment would clean up those inconsistencies, provide additional opportunities for cities and municipalities to participate in economic development efforts, and enhance the state’s ability to attract large employers to Arkansas.

WHAT DOES ISSUE NO. 3 DO FOR ARKANSAS?

 

1. Enhances the State’s Ability to Compete for Large Projects

    

• Removes the cap on Amendment 82 general obligation bonds (currently limited to five percent of the state’s general revenue budget).  

   

• Bolsters the state’s ability to compete for large projects, while still allowing the legislature to determine whether incentives should be offered, based on the impact of the project.

 

• Makes it more practically possible for the state to use Amendment 82 for more than one project at a time, with legislative approval.

 

 

 

 

1. Provides Clear, Consistent Constitutional Definitions, Empowering Cities and Municipalities to Participate in Economic Development

    

• Clearly Defines “Economic Development Projects,”[1] “Economic Development Services,”[2] and “infrastructure.”[3](All definitions also align with definitions used by AEDC)

   

• Having these definitions in place will eliminate the need for legal interpretation of whether cities and municipalities may engage in certain economic development activities, allowing cities to confidently pursue opportunities for their communities.

• Clarifies language of Amendment 62, broadening the ability of cities, counties, and school districts to form “compact” agreements to share revenue and/or costs to pursue economic development projects.

 

 

1. Gives Cities and Counties Clear Authority to Spend Local Dollars for Economic Development Projects

    

   Sales Tax for Economic Development Projects

• Many cities and counties currently collect a voter-approved sales tax for economic development, but the Constitution is unclear how the money can be spent, leaving local communities vulnerable as they work to create jobs.

   

• This amendment makes clear that cities and counties have authority to spend economic development sales tax revenue on “economic development projects.”

   

  Bonds for Economic Development Projects

• With voter approval, under Amendment 62, cities and counties will be able to issue bonds for “economic development projects.”

   

• Allows for the voter-approved sale of bonds to offer infrastructure and incentives to companies.

 

• Allows the private placement of bonds, enabling cities and counties to move swiftly when competing for economic development projects.

 

 

BOTTOM LINE: ISSUE NO. 3 WILL CREATE JOBS FOR ARKANSAS

              

Right now, Arkansas is at a disadvantage. Our constitution leaves us OUT OF LINE with other states in this part of the country when it comes to giving communities the ability to engage in economic development efforts.   Even with strong local and legislative support for economic development policies, many cities and counties have found their job creation efforts are limited by a confusing, inconsistent Arkansas Constitution. Issue No. 3 would streamline our constitution, providing ALL of our cities, counties, and the state with more and better tools needed to help create Jobs for Arkansas.