Arkansas Business reports
BANNED: Credit union unwelcome in Tech Park lending package.
that because of bankers' objections, the Arkansas Federal Credit Union
has not been allowed to participate in a lender consortium financing $17 million in initial property acquisition and development for the Little Rock Technology Park.
Bankers have long feuded with credit unions, which enjoy a tax exemption. Said the article:
Bankers also object to a tax-exempt credit union earning interest from a borrower supported by taxpayers via a sales tax approved by voters.
“Arkansas banks paid $258+ million in taxes in 2014,” Holmes wrote. “AFCU and 80 other Arkansas credit unions paid $0.00 in taxes. An individual taxpayer pays more in taxes than all credit unions combined.”
Bankers also say the Tech Park couldn't be a member of the credit union because credit unions are supposed to serve groups of people with common bonds. They have, however, become large deposit and lending institutions with diverse customers.
The bankers may or may not have a technical point on the lending activity. But this is very clear — they are treading into suspect territory.
Back to the beginning: The Little Regional Rock Chamber of Commerce is
a tax-exempt organization (no taxes on $2.8 million in revenue according to the most recent federal form on-line). It nonetheless got hundreds of thousands of dollars in taxpayer subsidies annually until a judge ruled the practice unconstitutional. It ran the campaign to increase a Little Rock sales tax and, in return, got its wish for $20 million plus in taxpayer money to subsidize the Tech Park. It's a municipal agency that so far hasn't received a dime except from taxpayer financed sources — the city, Children's Hospital, UAMS, UALR. The chamber refused, by the way, to properly reveal how it spent money raised in the tax campaign. I've objected before — with little result at City Hall — to giving public subsidies and control over big pots of money to an organization with a clearly delineated political agenda that happens to often vary with that of the public at large. Think workers compensation, unions, health insurance and lots more.
So, there's at least a little irony in hearing bankers objecting to a tax-advantaged organization benefiting from public tax dollars, since the subsidized, tax-advantage chamber has been engineering this train from Day One. I'd be willing to bet the Arkansas Bankers Association
will support Sen. Jon Woods'
proposed constitutional amendment to reverse the circuit judge and again allow tax money to flow to chambers of commerce such as the one in Little Rock.
But of larger concern is the evidence that political considerations are already having such a direct and dramatic impact on Tech Park operations. I won't bother to speculate over much on the other types of considerations that could be brought into play in the future. Would Jason Rapert and them allow the tech park to provide a taxpayer-subsidized home for companies that do stem cell research? Would legislative forces prohibit the Tech Park from having a policy against doing business with people who discriminate on account of sexual orientation? If a willing lender can be excluded for loaning money on account of an old business feud, it's not unreasonable to worry that anything is possible.
This is a public enterprise. I've never thought it was a good idea for government to get into private business. But if it does, it should treat all would-be participants equally. Members of the chamber of commerce shouldn't hold the veto.