Most of the incentives the state offers take the form of sales tax exemptions or income tax credits; localities can also provide property tax reductions. Little is known, however, about companies that receive subsidies and their impact on state revenues. The partially available data shows that the state subsidizes operations of major manufacturers such as Lockheed Martin, United States Steel, or Tyson Foods. Walmart, the largest retailer in the country, is headquartered in the state and is the state’s largest private employer, but very little is known about subsidies the company might be receiving.
The Arkansas Economic Development Commission and the Arkansas Department of Finance and Administration are the major agencies managing and administrating state subsidies. On the local level, counties and cities can enter into Payment in Lieu of Property Tax (PILOT) agreements that lower companies’ property tax obligations.
The state transparency website includes only limited disclosure, company names and subsidies paid out each year for grants, rebates, and training programs. The state provides a list of recipients of tax-based subsidies but only via freedom of information requests; subsidy amounts are presented as aggregate amounts over multiple years. Very little is known about PILOT recipients.
The state provides several programs and their costs under the GASB 77 rule, but no school district or localities (apart from Little Rock) do the same. The state’s Business Incentives and Tax Credits report includes aggregate cost of major economic development subsidy programs.
The state does not evaluate the effectiveness or impact of its economic development subsidies.