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May 2015

Corporate Welfare in Arkansas

Corporate Welfare in Arkansas – Governor’s Quick Action Closing Fund


The hard working people in small businesses around the state should be outraged. They are creating value, then having that value taxed by the state. Then the state turns around and gives those tax dollars to another private company, sometimes their competitors.  This not only redistributes the wealth of the small business owner but often re-distributes their employees as well.  Not only do these companies get taxpayer money by the hundred-of-thousands, and even millions, but several of these businesses are large, politically connected companies.   The small businesses of Arkansas who want to be left alone by government are at the losing end on both sides.

How is this done, you ask?  The Arkansas General Assembly established the Quick Action Closing Fund (“QAF”) through Act 510 of 2007. The bill passed unanimously in the Senate, and had only four “no” votes in the House (all republicans). Bruce Maloch (D-HD4) and Jim Hill (D-SD20) sponsored the bill.

The discretionary fund provides tax revenue to private businesses.  Act 1147 of 2015 appropriated $20 million to the fund for the upcoming fiscal year. The Governor has discretion on when and how the funds are used. Recently, Governor Hutchinson awarded American Taekwondo Association $950,000 from the fund to build a headquarters in Little Rock. Ben E. Keith received over $2.27 million from QAF recently as well. Below is a table listing the projects from the QAF for FY13 and FY14.

The table shows that the state of Arkansas has literally been paying for private companies’ rent, parking, bills, salaries, renovations, and equipment among other things.

This slush fund presents Corporate Welfare at its worst.  Rather than having a free market to decide which companies thrive and survive, the government, and in fact the Governor himself, is hand picking who gets taxpayer money to pay their bills and entice the best employees from Arkansas’ limited work force.  Negative sentiment towards abuse of welfare for individuals has grown greatly in the last few years, but many remain unaware of the Corporate Welfare practices in the state.

QAF is characterized as “economic development” that keeps jobs here rather than going to some other state or country. The program’s intent is to save jobs that may otherwise be lost because of budget cuts or because a company is considering moving operations to a more business-friendly area.  With the current manufacturers in the state unable to find a sufficient number of dependable works as it is, one must wonder about the need for this policy.

Some takeaways of the corporate welfare Quick Action Fund include:

  • $742,000 to ConAgra Foods for “parking/road” in 2013
  • $750,000 to Arkansas Research Alliance for “research salaries” in 2013
  • $5,000,000 to Blue Oak Resources through the AR Venture Capital Fund for “investment” in 2013
  • $1,000,000 to NanoMech, Inc. for “payment to Waco Title Company” in 2013
  • $687,000 to nGage Labs for purposes including “rent” in 2014
  • $478,182 to Umarex USA for “building expansion and parking” in 2013
  • $599,000 to NUVZN Technologies for “rent reimbursement” in 2014
  • $1,600,000 to Inuvo for “relocation and equipment” in 2013
  • $865,000 to Dassault Falcon for “road and engineering” in 2013
  • $1,800,000 to Windstream for “capital improvements” in 2013
  • $$634,000 to Custom Aircraft Cabinets for “building renovation” in 2012

If these renovations, equipment, and rent payments were truly needed and wanted, then the market would be calling for them. With Government making choices for consumers on what businesses will succeed, they decide a specific business’ product/service over others. Left up to individuals in a free market place, this business or a specific area of a business may fail. Allowing otherwise failing businesses to continue through taxpayer handouts fosters the continuation of something the market has otherwise rejected. Continuing of rejected products/services guarantees inferior choices to consumers because it is not allowing the rejected choices to leave the market and make room for innovation for better choices for consumers.

A far better way to spend this money would be to reform the tax code to give the $20 million back to the businesses that actually paid in the taxes. These true producers are creating value. To allow those small businesses in our state which are already producing and creating value to keep more of their money for research and development seems like a no-brainer for investment and true “economic development” for Arkansas. Yet each year we tax businesses then redirect a portion of that money to other businesses for their own operations through QAF.

In the recent past, QAF recipients have had to return a portion of their funds because they closed their operations. Hewlett Packard in Conway and Nordex near Jonesboro were both recipients of QAF money. Both companies closed and/or cut jobs soon after receiving the money. This effectively made those payments interest free loans to failing businesses. All paid for by taxpayers.  And as the list below reflects, some companies come for more than one serving.

If Arkansas were truly a “jobs magnet”, then there would be no need for extra forces to draw businesses here. The jobs would come because of economic opportunity, a strong work force, and the tax and business friendly environment needed to foster economic development. Getting government out of the way, and out of the pockets of small businesses would allow them to grow and thrive, adding jobs and value to the community in which they are located.

Let consumer choices decide the winners and losers. Stop letting Government choose the winners and losers with other people’s money.


Total spent since 2007 – $132,502,000

Total jobs “created/retained” since 2007 – 12,372

Cost “per job” – $10,709.83


                                               87th Session – July 1, 2013 – June 30, 2014

Company Name Purpose Amount Cumulative Payments
Thermold Magazines New product creation $ 238,748.00
  travel associated with new product development $ 10,025.08
  New product development (molds) $ 251,226.92 $500,000.00
Monticello Economic Dev Comm Rail $ 30,290.00
  Rail $ 43,474.83
  Rail $ 117,026.62
  Rail $ 46,308.83
  Rail $ 58,420.43
  Rail $ 4,479.29 $300,000.00
Inuvo Equipment/fixtures $ 125,230.95 $125,230.95
Dassault Falcon Building construction and renovation $ 2,000,000.00 $2,000,000.00
L&R Distribution Asset purchases $ 137,539.55 $137,539.55
Winrock International Contract with Winrock for Innovate Arkansas $ 300,000.00 $300,000.00
Umarex USA Building expansion and parking $ 478,182.00 $478,182.00
ConAgra Foods Parking/road $ 742,000.00 $742,000.00
City of Little Rock (Dassault/Falcon) Road $ 121,075.83  
  Road $ 47,008.42  
  Road $ 238,957.99 $407,042.24
Arkansas Research Alliance Research salaries and expenditures for Arkansas    
  Research alliance $ 750,000.00 $750,000.00
City Title & Closing (Creative Things) acquisition of facility $ 435,000.00 $435,000.00
ADFA (AR Venture Capital Fund) Investment into Nanotech $ 1,000,000.00  
  Ark Challenge Project $ 150,000.00  
  Vivionne Bioscience/equip and investment $ 216,000.00  
  Home DX Project/investment $ 400,000.00  
  Refund to Expenditure – Vivionne $ (20,916.82)  
  Blue Oak Resources Project/investment $ 5,000,000.00  
  Refund to Expenditure – Blue Oak Resources $ (1,995,724.13) $4,749,359.05
Soul of the South Building remodel $ 168,404.00  
  building remodel $ 331,596.00 $500,000.00
nGage Labs rent/furnishings/software/training/recruitment $ 305,617.32  
  rent/furnishings/software/training/recruitment $ 144,955.64  
  rent/furnishings/software/training/recruitment $ 104,059.26  
  rent/furnishings/software/training/recruitment $ 85,227.33  
  rent/furnishings/software/training/recruitment $ 47,763.15 $687,622.70
Diamond Bear Brewing equipment $ 116,000.00 $116,000.00
NanoMech, Inc. Equipment $ 329,653.64  
  Payment to Waco Title Company $ 1,000,000.00  
  Facility improvement, development, equipment $ 146,471.76  
  Equipment $ 40,453.45  
  Equipment $ 24,495.20  
  Facility improvement $ 111,843.43  
  Facility improvement, development, equipment $ 320,541.49 $1,973,458.97
Umarex Building expansion/parking $ 203,069.00 $203,069.00
Porocel Industries Building construction and improvement $ 250,000.00 $250,000.00
GGNSC (Golden Living) Equipment and furnishings $ 13,350.10 $13,350.10
NUVZN Technolgies Mold construction $ 389,881.96  
  rent expense reimbursement $ 62,523.04  
  rent reimbursement, mold construction $ 536,285.05 $988,690.05
Grace of Jake Film rebate $ 13,260.50  
  film rebate $ 9,702.03 $22,962.53
Aspen Transportation Facility retrofit and equipment $ 65,597.46  
  Facility retrofit and equipment $ 5,684.35 $71,281.81
Orbea training/building renovations $ 100,000.00 $100,000.00
Remington Arms Construction (slab and blocks) $ 465,250.00 $465,250.00
Firestone Site improvements $ 119,608.47 $119,608.47
Refunds to Account refund   $(2,971,438.75)
  Cumulative Total $13,464,208.67



                           86th Session July 1 2012 – June 30, 2013

Company Name Purpose Amount Cumulative Payments
Goodwill Industries Building Renovation $ 439,346.00
Building Renovation $ 60,654.00 $500,000.00
Neckbone Production Film Rebate (MUD) $ 35,425.93 $35,425.93
Inuvo Relocation & Equipment $ 435,154.76
Relocation & Equipment $ 696,748.93
Relocation & Equipment $ 325,918.43
Relocation & Equipment $ 166,946.93 $1,624,769.05
Molex Equipment $ 287,196.00 $287,196.00
City of Jonesboro (Nordex) Engineering (Rail) $ 3,780.00
Road $ 16,828.77
Road $ 293,979.94
Road $ 69,440.39 $384,029.10
Dassault Falcon Road & Engineering $ 865,706.06 $865,706.06
Dairy Stabilization Program Dairy Stabilization Payment for June $ 252,284.64 $252,284.64
NextLife Asset Recovery LLC Equipment $ 226,338.23 $226,338.23
L&R Distribution Asset Purchases $ 43,552.50 $43,552.50
Windstream Capital Improvements $ 1,864,334.60 $1,864,334.60
ADFA ARK Challenge $ 150,000.00
Agricultural Food Systems $ 15,000.00 $165.000.00
Vivione Biosciences, LLC Laboratory Support Equipment $ 7,500.00
Market Research $ 6,525.00
Laboratory Support Equipment $ 20,000.00
Laboratory Support Equipment $ 17,326.16
Laboratory Support Equipment $ 2,402.10
Laboratory Support Equipment $ 7,745.11
Laboratory Support Equipment $ 6,369.02
Laboratory Support Equipment $ 2,748.81
Laboratory Support Equipment $ 27,489.55
Laboratory Support Equipment $ 3,336.45 $101,442.20
NanoMech, Inc Equipment $ 828,660.11
Equipment $ 276,889.43
Equipment $ 518,761.21 $1,624,310.75
DeltaCB, LLC Wastewater Infrastructure $ 500,000.00
Wastewater Infrastructure $ 145,000.00 $645,000.00
JM Associates Film Rebate (Mighty Mississippi) $ 30,282.50 $30,282.50
GGNSC (Golden Living) Equipment & Renovation $ 249,423.55
Equipment & Renovation $ 313,583.80 $563,007.35
First Orion Office Renovation $ 30,430.84
Renovation & Equipment $ 94,680.65
Office & IT Equipment $ 26,532.28
Office & IT Equipment $ 24,289.42
Office & IT Equipment $ 23,472.42
Office & IT Equipment $ 4,176.31 $203,581.92
Awesome Products (AOI) Parking Lot/Truck Staging $ 240,000.00 $240,000.00
Custom Aircraft Cabinets Building Renovation $ 96,000.00
Building Renovation & Equipment $ 365,457.00
Building Renovation $ 173,006.00 $634,463.00
Firestone Site Improvements $ 1,130,391.53 $1,130,391.53
Refunds to Account refund $(154,371.36)
Cumulative Total $11,266,744.00

The Fall & Rise of Legislative Pork in Arkansas

Reprinted from Conduit for Action; By: David Ferguson

This is the second in a series of articles on General Improvement Funds

GIF PigThe General Improvement Fund (GIF) used to be used for improvements to state facilities, state parks and other state projects.  As an example of the type of state projects that were included, here is a link to Act 1030 of 1987, which distributed GIF. As you can see as far afield as the legislation went was to provide money to the Livestock and Poultry Commission for District Livestock Shows, but there is extensive legislation concerning state promotion of livestock through the shows.

The types of projects included in GIF became broader over the years.  The types of projects allowed exploded during the years Republican Mike Huckabee was governor, but it was not Huckabee’s doing. Much of the expansion came about because the overwhelmingly Democratic controlled legislature flexed its muscles in defiance to a Republican governor.  Adding more kinds of GIF projects was just one byproduct of the struggle to determine whether the Republican governor or the Democratic legislature would be king of the hill.

By 2005, the raid on state funds for GIF pork had gone crazy! The GIF distribution bill grew to 113 pages! Page after page made awards to not just state facilities and parks, but also to cities, counties, fire departments, and lots of private entities.  There were parks, museums, sports complexes, senior citizens centers, scholarships and out right support of private entities. Much of the money given to private and nonprofit organizations could be used however the entity saw fit. Some organizations got more than one GIF award because the awards came from different legislators who filed separate legislation.

I spent hours reading through the list of entities were authorized to receive money under the 2005 law and found no good way to summarize the projects.  A summary of the projects would have been much too long for this article.  I decided to list just a few random examples of awards of non-governmental awards, other than senior citizens centers and the many subscription fire departments.

Below is an example of twenty five projects listed in Act 2315 of 2005.  This is not a top 25 list.  I just picked 25 and quit reading the 113 page act.

  1. Arkansas American Red Cross $90,701
  2. Arkansas Baptist College $70,000
  3. Ballman Parent Teacher Association $2,500
  4. Boys and Girls Club of Pine Bluff Inc. $100,000
  5. Butterfly Community Ministries for North Little Rock Our Club $60,000
  6. Elmwood Cemetery Association, Inc. $25,000
  7. England Acres Neighborhood Association $100,000
  8. First Tee Golf Program for scholarships $50,000
  9. Free Will Baptist Family Ministries $25,000
  10. Habitat for Humanity of Jefferson County $5,000
  11. Hot Springs Village Property Owners Association $80,000
  12. Human-Elevation-Love Project $3,000
  13. Inner City Futurenet Incorporated $30,000
  14. Legion Hut in Lepanto $10,000
  15. North Little Rock Heflin YMCA $35,000
  16. Ozark Guidance for a Psychiatric Care Unit in Washington County $454,000
  17. Philander Smith College $30,000
  18. Runyan Acres Property Owners Association $20,000
  19. Sherwood Rotary Club (Veteran’s Memorial) $20,000
  20. Small Business Association $10,000
  21. Sylvan Hills Optimist Club $5,000
  22. United Family Services, Inc. $50,701
  23. Veterans of Foreign Wars (VFW) in Jefferson County $10,000
  24. Westside Business Men and Women’s Association $5,000
  25. White County United Way $40,000

There was much more legislation involved other than just the 113 page GIF distribution bill. There was also a separate appropriation bill for most of the projects in the list.  Separate bills were filed because Article 5, Section 30 of the Arkansas Constitution requires appropriation bills to be limited to a single subject.  Because some legislator would fail to get legislation filed in time, there was also a bill that would list multiple projects. Among legislators it was known as the “Christmas Tree Bill.”

Wilson v Weiss DFA

There was so much pork being spread around by 2005 that attorney and former state Representative Mike Wilson of Jacksonville had enough. Wilson filed a lawsuit challenging the constitutionality of a number of acts awarding General Improvement Funds. He challenged several claiming the acts violated:

  1. Amendment 14 of the Arkansas Constitution, which prohibits “local or special legislation”; and
  2. Article 5, Section 29, of the Arkansas Constitution, which requires appropriation bills to state a “distinct purpose”. Many of the appropriation acts merely stated that the funds were being appropriated “for state assistance to” the entity.

In Wilson v. Weiss DFA the Arkansas Supreme Court struck down several GIF awards as unconstitutional. Some observers thought the court decision meant the end of legislative pork. But the legislature was not inclined to give up.  As soon as the Supreme Court rendered its decision, legislators went to work devising a plan to get around the decision.

Scheme to continue GIF funding to local projects and groups

There was much discussion among legislators about the possibility of setting up a commission to make the same awards as grants, and the commission would be controlled by legislative appointments. This idea was eventually dropped, in part because it would focus too much attention on the legislature.

Eventually, they arrived at a plan that would keep the pork but make it harder for the public to track it. The GIF would be funneled through state agencies and GIF grants would then be awarded. The legislators would keep control of the grants by using informal communications with agencies. An unofficial behind the scenes list was kept on each project a legislator wanted to fund out of “his or her” share of GIF. The amount that would be appropriated to an agency was based on the unofficial list. Using this scheme, the appropriation bills avoided naming the particular recipients, which was thought to help avoid a constitutional challenge.

Under this scheme the GIF distribution bill no longer had to be 113 pages, but it is still lengthy because grants to colleges and state facilities are still listed separately. The latest distribution act is Act 1147of 2015.

A few bumps in the road

The scheme to keep funding local projects had an Achilles’ heel. The scheme depended on good backchannel communication between the legislature and state agencies.  There were glitches in communication at first.

Where is my publicity? The first complaint that arose among legislators was that some agencies didn’t give the legislator credit for the grant.  At least one agency sent out grant checks by the mail, which denied legislators the opportunity to make a big show of the award.  Agencies quickly found out that a good awards presentation with the legislator present for a photo opportunity was what was usually expected when it came to local grants.

Grants to colleges were not so much of a publicity problem because the legislator could still have his or her name on the act making the grant to the college.

But it is my money! In 2007, Senator Gene Jeffress send $100,000 to the state Athletic Commission for grants to Boys and Girls Clubs.  Not having any direction on how to divide the money, the commission announced that the fair thing to do was to give each Boys and Girls Club a GIF grant.  The commission’s decision revealed the lack of communication to the public and exposed the new system for what it was. Senator Gene Jeffress went to the next meeting and objected saying it was his money and that he intended for the entire $100,000 to be divided between just two clubs in his district.

“I did not seek $3,000 for each one,” he said. “I sought $75,000 and $25,000.” Do you think I would have sent $100,000 this way if I didn’t expect to get it back?” he asked. “I’m sorry, but I don’t represent Corning or West Helena. I got the money for the districts I represent.[i]

After the meeting, Jeffress said the Supreme Court decision was the reason the legislation didn’t mention specific clubs. “It was just the way it had to be written,” he said.[ii].

His public statement was an embarrassment to many legislators because they were trying to keep the funding local projects under the radar.  It was also too late.  The Athletic Commission was in a bind.  It could make the Senator mad or make the public and other clubs mad by reversing course and doing what the senator asked. With the public scrutiny the commission chose to keep its promise to divide the money among all clubs.

Local criticism of grants. After the 2008 article on the Boys and Girls club grants, GIF got little negative press because the big media normally didn’t notice the small grants being done though agencies.  A couple of exceptions began as local criticism of a GIF project and became statewide news. Two example are:

  1. A grant for a fireworks show that was criticized by a county judge who needed money for other projects; [iii] and
  2. A grant for a fully handicapped accessible playground which quorum court members criticized because they did not have money to maintain a park and didn’t even have a parks department. .[iv]

Letter of legislator support needed.

Many local GIF grants are funneled through the Department of Finance and Administration and then to one of the eight Planning and Development Districts covering the state.  The Planning and Development Districts then award grants to local projects.  How much money goes to a Planning and Development District is determined by how much each of a legislator’s “share” of GIF the legislator wants to funnel through the district.

The board of a Planning and Development District is made up of mayors and county judges. Although Arkansas Code 14-166-205 says the decision on allocating the funds “shall be solely within the discretion and control” of the board, the system doesn’t work that way. In 2013 the Arkansas Democrat Gazette exposed the fact that:

For five of the eight planning districts, a letter of support from a legislator is either required or strongly recommended and is considered in the grant evaluation process.[v]

Does that mean that the other three Planning and Development Districts make grants the way they wish instead of the way the legislator wants it to be spent? Do you think a legislator who knows how he wants the money to be spent would keep sending his “share” to a board that won’t listen?  It is more likely that the lack of a requirement for a letter of recommendation merely means there is no need for a paper trail in that district.

Good press at home

While the legislature tries to fly under the radar of statewide media, local press is still sought and is a big deal. Local newspapers are happy to provide their legislator publicity for bringing home the bacon to help the community. Many legislators are quick to let the public know that the grant was a result of the legislator’s willingness to share “his” GIF money (See examples in the CFA article: General Improvement Fund – A Reelection Tool )

The future of legislative GIF for local projects

Will the legislature act?  Not likely! Not every legislator likes the way the legislature uses GIF to fund a buffet of local projects across the state. But, don’t expect them to be brave enough to stand in opposition to the scheme. First, most of their colleagues love GIF as a way to help get reelected, and a legislator is not likely to alienate colleagues over GIF.  Second, if a legislator took the bold stand of saying I will not accept local GIF moneys, local groups would see funds going into other districts and rise up in opposition to the legislator’s reelection. Third, some entities have received GIF money for so long that they see it as their money and right.

If no one in the legislature has the guts to stop the raid on taxpayers’ dollars, how can it be stopped?  It may take another embarrassing lawsuit.

Mike Wilson speaks out on the new scheme.  Mike Wilson who filed the lawsuit over 2005 projects, has not been happy or impressed with the legislature’s scheme and has called it an attempt to bypass the court decision.

Concerning funding of a park in Saline County, he is quoted as saying:

“A single member of the Legislature does not have the privilege of directing where public money goes,” Wilson said by phone. “That’s a perfect demonstration of what the writers of the constitution said was unlawful. It’s an attempt to get around the constitutional provision of local or special acts. And it’s clear that’s what that is.[vi]

Concerning a grant of $5,000 for a fireworks show in Benton:

“I don’t believe that there is a state fireworks program that I haven’t heard of,” Wilson said. “Why is it that other firework-needy places don’t have access?”[vii]

Wilson has also called the scheme:

a corrosive example of pigging out at the public trough”.[viii]

Another lawsuit?  Sadly it may take another lawsuit to curb the legislative GIF practice.  With the legislative scheme being so obvious it may be time to put the scheme under review again to determine once again whether the local pork system violates:

  • Amendment 14, which prohibits “local or special legislation” or
  • Article 5, Section 29 which requires appropriation law to state a “distinct purpose.”

In addition, I think it would be worthwhile to also consider challenges based on:

  • Article 4, Section 2, which requires a separation of powers. This provision should be examined because the scheme allows individual legislators to act as the de facto authority over the distribution of GIF grants in their districts. Although this is being done indirectly, it should be remembered that the court has stopped intrusion on the executive base based upon a pattern of results.  (See Chaffin v Game and Fish)
  • Article 5, Section 30, which requires appropriation bills to be limited to a single subject. With the operation of the scheme being obvious, would the court decide that awarding grants is the single subject, or would the court look at the operation of the scheme as a “legislative Christmas tree” of unrelated projects.

Bottom line

When a legislator talks about being fiscally conservative and maintaining a balanced budget – remember the legislative GIF feed trough is still open and being filled each session (with your money!)


[i] Funds secured for his district, senator asserts, Arkansas Democrat Gazette, Jan 30, 2008

[ii] Ibid.

[iii] Display funding called to question, Arkansas Democrat Gazette, July 4,2014

[iv] Legislator’s letter eased funds for wife’s park project, Arkansas Democrat Gazette, Sept 3, 2013

[v] State tap still open on local projects, Arkansas Democrat Gazette, October 13, 2013

[vi] Legislator’s letter eased funds for wife’s park project, Arkansas Democrat Gazette, September 20, 2013

[vii] Display funding called to question, Arkansas Democrat Gazette, July 4,2014

[viii] State tap still open on local projects, Arkansas Democrat Gazette, October 13, 2013

– See more at:

Arkansas DHS Director Misled Lawmakers On Obamacare Waiver

CFC Claims no Credit. This article is shared from and all credit is given to the authors,, and the Foundation for Government Accountability.

Original Link

By Jonathan IngramNic Horton and Josh Archambault

Arkansas bureaucrats are wasting millions of dollars providing Medicaid benefits to people no longer eligible for the state’s expansion of the program under Obamacare. But is that just the tip of the iceberg?

Last month, internal e-mails from the Arkansas Department of Human Services surfaced, revealing that the state had never bothered to verify that individuals enrolled in Obamacare’s Medicaid expansion were still eligible for benefits. According to data provided by state officials, this is costing taxpayers up to $20 million each and every month.

We previously questioned why the state hadn’t started the redetermination process yet – which should have begun months ago. After all, federal law requires states to verify Medicaid enrollees’ eligibility at least once per year.

As we reported at the time, state officials contended that they had received a temporary waiver from the Obama administration, allowing them extra time to perform the eligibility checks. But it turns out that no formal waiver ever existed. Worse yet, a recent follow-up letter from the Obama administration may generate more questions than answers.

No Waiver Existed

After news broke that the state wasn’t performing the required eligibility checks, a number of reporters and lawmakers reached out for a copy of that waiver. Such a waiver would be pretty important – without it, Arkansas would be violating federal law.

Obama’s Letter Provides More Questions Than Answers

Unfortunately, this letter provides more questions than answers. First, it says that the Obama administration is now providing Arkansas the authority to delay its eligibility redeterminations. Does that mean that Arkansas was operating without that authority prior to April 27th? It certainly seems that way.

The Department of Human Services also contends that this letter allows them to delay all redeterminations until September 2015. But that is not, in fact, what the letter says. The letter allows them to delay redeterminations due in 2014 “for 9 months.” While a redetermination due on December 31, 2014 would not be due until September 2015 under this letter, one originally due on January 1, 2014 was actually due back in October 2014. This means that all redeterminations originally scheduled between January and August of last year should already have been conducted.

But even more worrisome is that the letter limits the delay exclusively to “eligibility renewals scheduled for January 1, 2014 through December 31, 2014.” It provides zero authority to delay redeterminations that should have been scheduled in 2015. So why hasn’t the state conducted the mandatory redeterminations that were due in January, February, March and April?

The Redetermination Process Should Have Begun Months Ago

Regardless of whether or not Arkansas’ actions are approved by Obama, they should be worrisome to taxpayers everywhere. The state has yet to redetermine eligibility for a single Medicaid expansion enrollee. By now, the state should have re-checked eligibility for more than 170,000 enrollees. Another 70,000 should be due for verification later this year or early next year.

To make matters worse, the Department of Human Services expects that up to 40,000 enrollees are still receiving benefits even though they’re no longer eligible. If those estimates are correct, taxpayers could be on the hook for up to $20 million per month to provide Medicaid expansion benefits to people no longer eligible.

Worst of all, state officials have facilitated this fraud by asking for waivers and continuing to kick the can further down the road. Meanwhile, nearly 3,000 children and adults with developmental disabilities are sitting on Medicaid waiting lists. Some of them have been waiting eight years or more for their needed home- and community-based services. They continue to wait, while Arkansas bureaucrats provide Obamacare welfare to 40,000 able-bodied adults who aren’t even eligible.

Welcome to Obamacare.

Employment Environment

Employment Environment

Summary of CFC position regarding the most productive Employer/Employee relationship for the good of the Arkansas citizenry:

In General–Problems Defined:

An individual’s relationship with an employer has become more distant and adversarial over the past decades.

Entitlement mentality of the individual and the constraint of regulation has created an environment that causes the employer to adopt uniform processes and responses that do not, and cannot, make the individual actions of the employee the focus of growth and prosperity but rather lumps all into a group for an average relationship. This fosters mediocrity at all levels, including the individual.

Discrimination, abuse, and disparity are too often the first things considered from all perspectives. These perceptions are further enhanced by the response of business taking the safe and generic path to relationships with employees and correspondingly, the employee is enabled, and even encouraged to assume a wrong has been committed if they are not successful or continued as a productive part of the business relationship.

There are obvious differences in people that cannot be measured by any imposed system, and we should move to a relationship whereby the judgment of an employer/employee transaction is deemed reasonable if the people remain, in general, willingly employed. An employer will generally fail on their own within a free capitalist system if they consistently cause good people to be subjected to discrimination, danger, or abusive environments.

A–The two extreme general perception groups for the business to individual relationship are outlined as follows:


1.Business Focus Extreme:

Business is big, rich, socially blind, and mindlessly focused for profits.

The goal is to make as much money as possible for the owners.

Employees are a necessary evil who must be paid a little as possible.

Employees are used as interchangeable parts and are of minor importance as individuals.

Safety is a cost to be minimized.

Management will and does take advantage of an individual any time it can.

Jobs are a take it or leave it proposition

2.Employee Focus Extreme:

Jobs are an entitlement.

What, where, when, and how employment should be regulated by a third party

Employees are to be treated the same rather than equally (same pay for same job description.)

To be fired is a negotiated transaction wherein the reason for the separation is an equal responsibility.

Seniority plays a primary or large roll in job retention and compensation.

Government should monitor in detail, and punish any potential safety or discrimination infractions.

Burden should be on business to prove there is absolutely no abuse, discrimination, or danger encountered at all times.

B—An ideal and productive business environment, most beneficial to all sides, would consider the following as positive principals:

It is in the interest of business to create an environment where individuals not only wish to work, but can advance to their potential in that work.

It is the individual’s duty to advance when given opportunity, not the other way.

A job filled is a mutually beneficial arrangement that should be terminate-able by either party at any time if not beneficial.

Employees should be paid the higher of their general market rate or a value that will enhance the company viability and retain the employee services.

Safety is good for business. Injury is not only a cost to both parties, but an indicator of the poor value/job of the management.

Retaining employees is good for business. Retaining unproductive people is harmful for the company and all individuals within it. There are many factors that go into the decision to terminate an employee, it is unproductive to business and the ultimate benefits to the employee to be forced to consider the “larger group/description” an individual may be assigned/belong to when assessing an individual’s job value.

Neither party is obligated to the other except by formal written contracts.

Risk and reward should always be allowed to be an incentive when humans enter into financial relationships.

The same description or opportunity does not insure the same results.

Some are worth more compensation than others; some will accept less than others. This is an individual agreement between an individual and a business not directly relevant to any other or different arrangement.

Pay is an individual negotiation before the fact.

Continuing the relationship after the fact is an option for either party.

Equal pay for equal work is impossible to achieve in both the sense of value created by each and the effect of intangible activity on the rest of the people.

There are too many factors to equate one individual to another.

This should allow each individual to negotiate their best deal with the employer regardless of what deal any other individual may have.

Incentives exist for both parties to reach an acceptable private arrangement.

Therefore it is the intention of CFC to promote the return to and further establish true free market principles and move business in Arkansas toward the more general “public regulation by affirmative employee/consumer/community action” in place of the current “collective, government administration of penalty/requirement/and directed incentives.”

General Improvement Fund – A Reelection Tool

Reprinted from Conduit for Action; By: David Ferguson

GIF-The members of Arkansas General Assembly are given discretion over millions of dollars in General Improvement Funds (GIF). For the 2015-2016 fiscal year $20 million has been set aside for the whims of legislators.  Each legislator determines how “their share” is spent. Some designate their share to go to a college others have the funds sent to the Department of Finance and Administration to then be sent to one of the eight planning and development districts and then awarded as grants.

The public is not privy to exactly how the money is divided among legislators, but if the House and Senate each received $10 million, and then with each Senator getting an equal share and each Representative getting an equal share, then each Senator would have discretion over $285,714.28 and each Representative would have discretion over $100,000.

Why are state funds distributed upon the discretion of an individual legislator instead of through a formula or perhaps retained for other needs? $20 million helps incumbent legislators gain favor in their districts.

2014 Election

Republican Doug Driesel, who ran against incumbent Democrat Representative Scott Baltz in District 61, stopped by a rural fire department to campaign.  According to Driesel, several firefighters told him they liked what he stood for, but that they couldn’t vote for him because Baltz had gotten General Improvement Funds for their fire department.

Blaine Davis ran as the Republican candidate in the adjoining District 60, against incumbent Representative James Ratliff. Recently, I asked Davis if he had a similar experience with fire fighters in his race. Davis responded:

 “Absolutely.  Several that I’d known for literally forever told me they would have to support him or just groaned when I told them who I was running against.  He’s given thousands to every one of them [fire departments].  Heck, at the Strawberry Fire Department fundraiser all he [Ratliff] did was stand up and talk about how much he gave them.”

A GIF grant is not likely to be forgotten by the members of an organization receiving the grant. In addition, local governments and volunteer organizations are also likely to be a good source of campaign workers because these are people who are already active in their community.

Could GIF make the difference in a legislative race?  You bet! Consider how close Blaine Davis’ came to winning.  Davis only lost to the incumbent by 50 votes. There are a lot of fire firefighters in House District 60. If just 26 firefighters voted for the incumbent because of GIF funds, then GIF funds made the difference in the outcome in that race.

Gaining publicity and building voter gratitude.

Legislators doling out GIF grants is a big deal in many areas of the state. Local newspapers, especially in rural areas, love to report that their Representative or Senator got GIF for local communities and organizations.  Legislators are quick to get in the photograph when as poster size check is handed out.  Click on name for an examples of the publicity legislators get from “their GIF:

 Rep. Scott Baltz                      Rep James Ratliff           Sen. Stephanie Flowers

Rep. Sheilla Lampkin            Rep Jeff Wardlaw          Rep Douglas House


Some legislators send all or a portion of “their” GIF to colleges. It is good publicity too.  For example, the University of Arkansas made sure its supporters and alumni knew that thirteen legislators deserve recognition for sending GIF to the university for three projects in the combined amount of $3 million. See article: University receives increase in state funding monies from General Improvement Fund

Many people see these articles and think “Our legislator is working hard and knows how to bring home the bacon.”  No effort was actually needed. Legislative GIF is just a slush fund created to give every legislator a share, whether the legislator uses it for a good purpose or not.

If the local newspaper fails to report the story or an organization’s newsletter fails to publicize it, what does a legislator do?  The answer is easy – toot your own horn on social media.  That is what Rep. Ratliff did when he did not get the publicity he hoped for.  Here are a couple of examples from James Ratliff’s Facebook account:

June 4, 2014: “Had a busy day. Started by going to the women’s battered shelter in Highland this morning awarding them a grant of $1000 for fixing their plumbing.”

April 12, 2015: “The fire chief Stan Mayland thanked myself (Rep James Ratliff) for the grants that bought all new turnouts and equipment for all the firemen in Strawberry.”

It seem a bit odd for a Representative to need to put his own name in parentheses on his own Facebook account.


Are there reasons for giving legislators discretionary funds (other than election purposes)? Are there legitimate reasons to give legislators discretionary funds?  No, there is not. Excuses cited in the past include:

1. Legislative discretion over the money is needed in order to get money for projects in rural areas. Wrong. Sorry but if getting funds to rural areas is the goal there would be a lot easier and cheaper ways of doing it. First, it is not just rural legislators who have say over GIF funds. Second, no legislator is required to use the funds for a rural project or even within his or her own district.

2. Legislative discretion is needed because a legislator knows better than anyone which local project should get a GIF. Wrong again. Legislators sometime do not know the greatest needs in their district and even if they do they have no obligation to use GIF for the most needed projects. In exercising discretion over the money, the legislator’s goals sometimes conflict with the priorities and needs of municipal and county officials.In 2013, Senator Jeremy Hutchinson directed GIF money to a firework show.  I happen to like firework shows, but local governments didn’t fund the firework show because of a lack of funds for more important projects.“Saline County Judge Lanny Fite said he has a list of projects that need funding like repaving parking lots or buying new lighting. ”“I did not like the way it was being used, plain and simple,” Fite said. “Money is very tight; we don’t have a sales tax. This money is always good to help us do projects that the county cannot afford.” [i]Also in 2013, then Representative Andy Mayberry and some legislative friends sent $120,000 in GIF to fund a playground that is fully accessible to disabled children.  That is certainly a worthy cause! But it also seems to be an instance in which a state Representative single handily pushed a project onto the county despite the quorum court not having money to maintain a park or replace equipment in the future.  It was noted by a quorum court member that the county didn’t even have a parks department. Julie Mayberry, Rep. Andy Mayberry’s wife and now a state Representative, responded to criticism by the quorum court in 2013 by suggesting that the quorum court create a parks department.[ii]Could we handle needs without giving legislators an expensive reelection tool?

On the other hand, maybe we would miss those newspaper photos of legislators handing out poster sized checks and their Facebook self promotions. The state also has turn back formulas for sending state support to municipalities and counties.

Also consider that a significant portion of legislative GIF goes to fire departments.  Again, there is a funding formula for support of fire departments.  In addition, a fire department with a significant need could be overlooked merely because it is in a legislative district where the legislator prefers to give his GIF allotment to a college or perhaps want to use it for a fireworks show.

Consider that a significant portion of legislative GIF goes to colleges. We already have a funding formula for the colleges. The Department of Higher Education should have a good understanding of needs of Arkansas colleges.  And, under the current system there is no guarantee that the most important need will be addressed because a legislator with a college in his or her district could choose to spend his or her share on other types of projects.

Do we really have to give a legislator a “please-reelect me fund” in order to fund worthy projects.


[i] Display funding called to question, Arkansas Democrat Gazette, July 4,2014

[ii] Legislator’s letter eased funds for wife’s park project, Arkansas Democrat Gazette, Sept 3, 2013