$87 Million Super Project Clears First Steps, Primary Move Has Tougher Road

May 26, 2015

Sen. Tom Cotton and Gov. Asa Hutchinson join with other officials in looking at a prototype of a military vehicle that would be produced in Camden if Lockheed Martin lands the government contract.
Credit Brian Chilson / Arkansas Times

    

An $87 million state incentive package intended to help Lockheed Martin land a $30 billion federal defense contract easily passed a pair of initial committee hurdles on Tuesday. But on the first day of the legislative special session a path to move Arkansas’s primary date stalled in a Senate committee.

The bond issue to assist the Maryland-based defense contractor upgrade its existing facilities east of Camden in Calhoun County seemed poised for an easy course in the Legislature from the outset.

U.S. Senators Tom Cotton and John Boozman joined Governor Asa Hutchinson and fellow Republican state legislative leaders on the steps of the state Capitol Tuesday to rally for the project. The proposed bond issue would go into effect if the company wins a federal defense contract to manufacture next generation of Humvee-like vehicles.

Speaking on the Capitol steps, Hutchinson said philosophically he doesn’t like the idea of state dollars going to private companies but he said in reality it’s a critical job development tool.

“We’d all like to be purists, in which there’s not any government involvement in high stakes super projects. But the fact is that we’ve got a competitive environment with other states. Other states in various ways are supporting these super projects. Arkansas’s been on the losing end of many of those competitions. We want to compete. This is where you set aside pure economic theory and says let’s be practical,” said Hutchinson.

Lockheed Martin officials say 580 jobs, averaging $58,000 a year, will be added to 500 already in existence in South Arkansas to support the production of 55,000 of the Joint Light Tactical Vehicle (JLTV). Arkansas Economic Development Commission Director Mike Preston said Arkansas’s financial support for the project is comparatively small.

“$87 million is probably on the low end when you look at a project at this scale compared to what other states have done in the past. It’s on the relatively low side,” said Preston.

Lockheed Martin is competing with two other contracts for the Department of Defense project. Preston said at this point he can’t compare Arkansas’s state aid offer to that of other states bidding.

“We don’t yet, they haven’t put out their proposals yet. We’re kind of the first ones out of the gate,” said Preston. “I suspect soon we’ll know that.”

The predicted economic return on investment to Arkansas, reaped directly by the state government only in the last five years of Lockheed Martin’s 25 year commitment, could be bolstered by other militaries purchasing the technology.

Scott Green, a vice president at Lockheed Martin, said that potential business was not added into assessments of how south Arkansas might benefit from the state’s first auto assembly line, “we fully expect that there will be foreign governments that will want the same capability as the U.S. government.”

But for many of the lawmakers making remarks, including Senator Tom Cotton who chairs an Armed Services subcommittee that discussed the vehicle, the use of state dollars to further develop the US military is what gives the project its merit. Cotton said he thinks it will motivate and improve the quality of Camden’s workforce

“Their end user, their customer, is the war fighter on the front lines trying to keep our country safe, said Cotton.

The freshman Republican Senator who is a veteran said it’s also a needed upgrade. He said the in-use Humvee is “old and venerable” but was never designed for the tactical roles used in Iraq and Afghanistan.

Twin version of the $87 million bond issue advanced through state House and Senate committees Tuesday and head to the floor. There is likely to be some resistance but Republican State Senate President Jonathan Dismang noted this is a proposal with bi-partisan appeal and roots beyond the current class of legislators.

“I want to say thank you to [former Democratic] Governor Beebe and his team that kick started this project and really got the ball rolling,” Dismang said on the Capitol steps.

Republican House Speaker Jeremy Gillam also expressed confidence in support for the bond issue.

But an attempt on another special session agenda item to move the state’s primary elections from the third Tuesday in May to the first Tuesday in March floundered in a Senate committee on Tuesday afternoon. A House committee approved the move, geared up ginning up interest in Arkansas for the 2016 presidential primary, but the Senate State Agencies Committee did not advance the bill. It did not report do pass, on partisan-line 4-4 split.

Democratic state Senators Joyce Elliott and Linda Chesterfield of Little Rock voiced concerns the bill would fail to attract additional attention from 2016 presidential contenders. Elliott said Arkansas’s low electoral vote count prohibits a high level of interest. Democrats, which hold a rare level of power for the party in the Senate State Agencies committee, also said changing state level primaries from May to March would unfairly benefit incumbents by moving both campaigning and voting to winter months, with possible corresponding bad weather.

Republican state Senator Gary Stubblefield sponsored the Senate version of the bill. Minutes before the vote was taken Stubblefield was asked by Sen. Chesterfield if he would pull the bill up to the floor by suspending the rules, circumventing the committee in the event of a split vote. Stubblefield said no and that he didn’t know of anyone considering such a possibility.

Less than five minutes later, after the committee declined to advance the bill, Stubblefield was asked by reporters if he had changed his mind on moving forward by pulling the bill out of committee and straight to the overwhelmingly GOP Senate floor by suspending the rules.

“I certainly have [chuckle]. That will be considered, it certainly will be considered now,” said Stubblefield.