The state of Arkansas is preparing to distribute up to $10 million this year in community development grants starting July 1. The announcement came from Governor Sarah Huckabee Sanders and the Arkansas Economic Development Commission this week.i Cities, counties, and nonprofits can apply for up to $1.5 million per fiscal year for community and economic development projects, with a 20% match requirementii. The application window runs through August 15.
The timing raises some questions.
As reported by the Arkansas Democrat-Gazette, the Arkansas Legislature’s Joint Auditing Committee heard testimony just days ago from local officials whose towns cannot account for money they have already received. The town of Haynes (population 122) has a budget deficit topping $35,000, owes more than $20,000 to the IRS, and has paid back only $178 of the $16,656 it improperly pulled from its own street fund. When a legislator asked the town recorder how Haynes intended to get out from under it, her answer was hard to counter: “Praise to God, I don’t know.”
The Democrat-Gazette also reported that Wilmot, a town of 418 near the Louisiana border, is sitting on a deficit of more than $51,000, most of it owed to the IRS. The mayor took a $15,000 pay cut to help. The town had also fallen behind on required water and sewer audits.
Committee members are not hiding their frustration. “You have the same act, noted by the auditors year after year after year, by the same people, and they don’t do anything to fix it,” said Sen. Alan Clark (R-Lonsdale). Seems Sen. Ben Gilmore (R-Crossett) went further, suggesting the committee may need to look at revoking Haynes’ town charter if nothing changes by September. (The referenced revocation process exists under a 2017 state law, used for the first time in 2024 when Allport lost its charter, a decision currently under appeal before the Arkansas Supreme Court.)
Small towns struggling with proper spending and accounting for government funds isn’t a new story in Arkansas. What’s different now is that the state is simultaneously opening up a fresh round of grant money for many of those same communities. The Community Assistance Grant Program is focused on food insecurity, unemployment, housing, and similar needs. These are real problems that don’t go away whether a town recorder can or can’t balance the books.
There’s also a catch worth noting. The program requires a 20% match from every recipient. For a town already drowning in debt and dodging IRS bills, scraping together matching funds they don’t have (even its city-owned land) isn’t an opportunity; it’s a path to bankruptcy.
Remember: AEDC doesn’t have any money of its own. Every dollar it hands out — whether through this community grant program or the incentive packages it assembles for corporations looking to set up shop in Arkansas — comes from taxpayers. The same commission now inviting Delta towns to apply for grants is the one crafting corporate welfare deals worth many times more for companies that, unlike Haynes or Wilmot, have lobbyists and lawyers handling their paperwork.
Conduit has long argued against this model. Using tax dollars to pick winners and losers in the marketplace doesn’t build a healthy economy (regardless of the claims from an impressive website). It builds relationships between government officials and the businesses savvy enough to cultivate them. That’s a short road to cronyism and corruption, which has landed big here in Arkansas.
The state Legislature will grill a small-town recorder over $178 in back payments while nine-figure corporate incentive deals move through AEDC with considerably zero friction and far less public scrutiny. Lawmakers may call that economic development. But in reality, that’s the government putting its thumb on the scale with your money.
At a time when Americans are rejecting socialist policies at the ballot box, Arkansas keeps doubling down on big-government schemes (with less accountability) that have already proven they don’t work. It’s not just crony capitalism — it’s a recipe for higher taxes, more corruption, and a bureaucracy with no guardrails. Even DOGE can’t save us from this mess.
Still, eligibility for this program is open to cities and counties broadly (and even nonprofits)!
Which brings us back to Sen. Gilmore. He was the lead sponsor of SJR15 (along with Sen. Jonathan Dismang (R-Beebe)) — referred to voters in November 2026 as Issue 3 — a measure that, despite its framing, doesn’t rein in corporate welfare in Arkansas. It expands it—with even less accountability. So, when Gilmore says, “We have to make sure that the citizens of Arkansas are getting what they’re paying for in their taxes,” the irony is hard to miss. The same legislator demanding accountability from a small-town recorder is carrying water for a ballot measure that hands AEDC even more power to spend your money on corporate incentives with even less taxpayer oversight.
That’s as true for a $1.5 million community grant as it is for a corporate tax break.
IN CASE YOU MISSED IT …
As Issue 3 looms on the November 2026 ballot, Arkansas voters might find themselves wondering whether the idea of dedicating tax revenue to local economic development has been tried before, and what the results have been.
And in fact this idea has been tried – right here in Mississippi County. Click here to read the case study now.
