PROTOTYPES: These are protyotpes of competing proposals for a light tactical vehicle to replace the Humvee. Lockheed Martin is a finalist in competition for the defense contract.
Documents released yesterday show
that the state of Arkansas will have to pay almost $6 million a year, for a total of $118 million over 20 years, to make $87 million in corporate welfare payments to help Lockheed Martin
land a military vehicle assembly contract for its Camden facility.
The $87 million bond issue will carry interest charges of an estimated 3.3 percent, running up the total bill. Most of the money will go for building the necessary plant, with some small amounts for job training and bond issuance costs (legal and underwriter fees, for example).
So where will the state find $6 million? Gov. Asa Hutchinson
hasn't yet said. Nor have legislators.
But the money will come from a state that recently cut county health clinics, libraries and most state agencies (from the Ethics Commission on up) and which has had to increasingly beggar colleges (which in turn are running up tuition for students further burdened by shrinking state scholarship money). The cuts have been necessary to pay for Hutchinson's big income tax cut, which included a huge capital gains tax cut for the wealthiest Arkansans.
Hutchinson, you'll remember, said the state couldn't afford an income tax cut for the 40 percent of working Arkansans at the bottom end of the income scale. Nor could we afford an earned income tax credit for those workers. But we can afford $6 million a year in welfare payments for Lockheed Martin, whose $45 billion in revenue last year dwarfed Arkansas's $5+ billion in state general revenue.
The favorable economic analysis of the corporate welfare handout says it isn't likely to produce a net gain for the state for 20 years, but will accumulate a surplus in new tax revenues in year 21-25. Legislators have proclaimed this good.