Potential Rewards Big for Big River Steel Mill, But Risks Remain

by Chuck Bartels, The Associated Press  on Sunday, Feb. 10, 2013 5:46 pm  

John D. Correnti, the leader of the Big Steel Project. His team has has developed 15 similar mills.

The assessment by Delta Trust notes the state income tax credit on recycling equipment — if extended by the Legislature — could save Big River Steel as much as $240 million.

"It's an income tax credit so they use it against income tax that they would otherwise pay. It's 30 percent of their investment, so if they buy a $100,000 recycling machine, they take 30 percent off their income taxes, $30,000," said Tim Leathers, deputy director of the Department of Finance and Administration.

But the governor has said that nothing will happen if legislators don't agree to sell $125 million worth of bonds under provisions of Amendment 82, which was approved by voters in 2004 after Arkansas lost a Toyota truck plant to Texas. The amendment allows the Legislature to approve borrowing money in order to fund a "superproject," a big employer that will invest at least $500 million and employ at least 500 people.

Once a bill is introduced to bring the bonds to a vote, the House and Senate have 20 working days to decide whether the state should offer incentives to attract jobs.

Beebe said not everyone agrees with giving businesses incentives but says it's necessary.

"That's the single reason why we win so many of these (economic project) wars," Beebe said. "You're not living in the real world. Other states are doing it."

Beebe has told legislators he expects them to go through the proposal in detail and that if they don't approve borrowing the $125 million, the plant won't be built in Arkansas.

Beebe said that would be unfortunate, as Mississippi County "is a part of the state that needs a lot of help."

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