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Chamber of Commerce at work

Promoting more bond issues, higher interest rates.

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The Arkansas State Chamber of Commerce/Associated Industries of Arkansas is close to 100 percent successful in getting what it wants from the Arkansas legislature. Its record with Arkansas voters is not quite so impressive, but still good, and it can get even better at the general election Nov. 2.

In 2004, the Chamber helped win approval of Amendment 82, which allowed the state to issue general-obligation bonds to help industrialists with "super projects," defined as those that would entail the investment of more than $500 million in capital expenditures and the hiring of more than 500 employees. Now the Chamber is back to amend Amendment 82, by removing the $500-million and 500-employee requirements, so that general-obligation bonds can be issued for smaller projects. No organized opposition to proposed Amendment 3 has appeared. "And we've looked," said Randy Zook, president and CEO of the Chamber/AIA.

General-obligation bonds pledge state tax revenue if it's needed to retire the bonds, which means that money that might otherwise go for schools and highways and such could be used instead to pay off bonds. Under Amendment 82 (and proposed Amendment 3), these bonds can be authorized by the legislature, without a vote of the people.

No bonds have been issued under Amendment 82. Zook said the $500 million/500 jobs requirements had proved too great, and Arkansas had lost projects to other states. Only the very biggest projects, such as automobile plants, can meet those requirements, he said, and projects like that are rare nationwide.

Amendment 3 would retain another restriction on general-obligation bond payments that was established by Amendment 82: Bonds can't be issued for an amount greater than five percent of state general revenue in the preceding year. (The amendment is not limited to the use of general revenue, however. It says that special-revenue tax money can be used too, as long as the total amount of state money doesn't exceed an amount equal to five percent of general revenue.)

House Speaker Robbie Wills of Conway was the principal legislative sponsor of the resolution that referred proposed Amendment 3 to the people at the general election in November. The Chamber lobbied for it. Amendment 3 is endorsed also by the state Economic Development Commission, the Municipal League, the County Judges Association, the Automobile Dealers Association, about 25 city councils, and various local and regional chambers of commerce, including Little Rock's.

The Chamber and its allies are also backing proposed Amendment 2, which would raise the allowable interest rates on consumer loans made by retailers, and on certain bond issues, making it easier for local governments to sell bonds for capital improvements. (See Sept. 2 Arkansas Times.) No organized opposition to that amendment had stepped forward either until two weeks ago, when Little Rock lawyers Christopher D. Brockett and Eugene G. Sayre filed suit to keep it off the ballot. They allege, among other things, that the explanation of the amendment that would appear on the ballot is misleading.

The Arkansas State AFL-CIO, which has previously opposed amendments for higher interest rates, voted at its state convention in August to take no position on Amendment 2 or Amendment 3. Alan Hughes, president of the AFL-CIO, said last week that the information available to convention delegates in August was possibly not as clear and comprehensive as it might have been. AFL-CIO members should inform themselves about the amendments, he said.

The Chamber is drumming up support for both amendments. Zook expects that both will benefit from voters' concerns about high unemployment. "People are in tune to the need for jobs in this economic climate," he said.

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