In November, Arkansas voters will be asked to decide whether to hand broad new “economic development” powers to local governments and political subdivisions. These powers would include the ability to create economic development districts that can capture tax increments, issue bonds outside ordinary constitutional debt limits and oversight, offer abatements and rebates, and make grants or loans to private companies.
Importantly, Issue 3 would bequeath these powers to every county, municipality, or political subdivision in the state.
The usual rationale for “economic development” tools of this kind is that poor, struggling counties (or municipalities) need to offer public money to private businesses, in order to entice those businesses to locate in poor, struggling areas, thereby boosting their lagging economies. This is the argument that was used to justify such tactics in Mississippi County and Jefferson County. And those experiments with “economic development” had at best, mixed results (5) (6).
However – what about counties which obviously do not fall into the category of “poor and struggling?”
What about a county like Benton County or a city like Bentonville, Arkansas (home of Walmart’s world headquarters, one of the top two wealthiest companies in the world, with NWA being the wealthiest part of Arkansas).
Benton County, Arkansas boasts a median annual income of over $90k (1), the highest in Arkansas (4). It has experienced almost continuous population growth since 1970, growing from 40,000 people in 1970 to over 320,000 in 2025 (2). And while the housing market in parts of the US and Arkansas has lagged in recent months, Benton County’s housing market has remained lively (3). This ongoing prosperity is largely founded on a successful private business market, anchored by major private employers including Walmart and J.B. Hunt, with the broader Northwest Arkansas ecosystem also including Tyson Foods (4).
Clearly it is not the case that Benton County must use tax-and-spend incentive programs to juice its economy. However, we must assume that Benton County may use such tools if they are made available through Issue 3 in November. (A glance at the donor support list for Issue 3, listing Walton family members and then real estate developers at the top, proves this argument to many.)
So, the question now is this: Will Issue 3’s economic development tools be deployed most effectively by the counties with the largest tax base and strongest growth already underway, thereby accelerating rather than reducing Arkansas’s lopsided economic geography?
In other words:
Might it be that, rather than incentivizing growth in low-income counties, giving government “bribery” tools to wealthy counties will ultimately lead to the draining away of the few businesses that might otherwise have located in poorer areas of the state—cause them to locate instead-where government incentives are actually not needed to stimulate economic prosperity?
Let’s take a brief look at what Issue 3 actually does.
For the full text of the proposed amendment, readers can see Ballotpedia here: https://ballotpedia.org/Arkansas_Authorize_Legislature_to_Create_Programs_for_Economic_Development_Including_Economic_Development_Districts_Amendment_(2026)
Here is a brief explanation of the highlights:
- Issue 3 creates “Economic Development District” Boards, which, once established, are exempt from prior taxes to which it was previously obligated.
- It operate with no ongoing voter accountability and may levy taxes (or not) and give loans or abatements or rebates (from taxpayer dollars) on an individual basis to any privately owned business within the district.
- It redefines “public purpose” to include “economic development.” (For the full implications of that, please read this article: https://conduitnews.com/2026/07/31/act-576-the-government-power-grab-you-werent-supposed-to-notice/)
- It removes constitutional debt limits for borrowing done by these “Economic Development Districts.”
Leaving aside the question of whether it’s a good thing to allow an appointed board to take money from existing citizens and businesses in order to enhance and bribe new businesses, it is clear that a local board/government with a more formidable tax base is going to be able to offer more attractive “financial incentives” to businesses than will local governments with a smaller/poorer tax bases.
This is more than theoretical.
A 2018 paper by Jia Wang, Stephen Ellis, and Cynthia Rogers, entitled, “Income Inequality and Economic Development Incentives in US States: Robin Hood in Reverse?” (7), found that, “more generous EDI [Economic Development Incentive] use is associated with redistribution of income from the bottom 90 percent to the top 10 percent of the income distribution.” They aptly christened this phenomenon the “reverse-Robin-Hood” effect – steal from the poor to give to the rich. Or, to be more precise: steal from all those available to be stolen from, in order to give to a chosen few.
It is in fact a common argument of “Economic Development” proponents, that localities “need these tools in order to compete for businesses.” But they seem to ignore the practical consequences of essentially putting all counties into the same league – counties like Lee, Phillips, and Desha will be competing against counties like Benton, Washington, and Pulaski. Why would a private business locate in Lee County when Benton County can offer them $5 million in infrastructure and tax breaks?
It is true that some projects are not mobile (if your business plans to mine lithium, it cannot move to a county that doesn’t have lithium deposits); or are less sensitive to incentives (a restaurant likely won’t locate in a place where no customers exist, no matter how lucrative the initial tax incentive package). However, to the extent that Issue 3 would lead to intra-state bidding wars, it is clear that wealthy counties would be able to supply the largest bribes.
If voters approve Issue 3, they ought to expect a further concentration of economic activity in already-wealthy counties, further growth in northwest Arkansas, and further shrinking of rural communities.
Political Science professor Joshua Jansa of Oklahoma State University reinforced this finding in his research – “I found that increased subsidy spending is associated with higher post-transfer income inequality, all else equal,” Jansa said (8). Of course, “inequality” is not an inherent evil- in a state of nature, inequality is the natural result of different talents and choices.
However, it’s something entirely different to take by force (and government is force) from those who already have less in order to give it to those at the top.
When it comes to Arkansas specifically, there are endless critiques of the results of past subsidy efforts, including the observation that incentive benefits tend to flow disproportionately to the wealthiest counties. Please peruse the resources of the Arkansas Center for Research in Economics here: https://uca.edu/acre/targeted-economic-development-incentives/ . You will be hard-pressed to find a single positive review of government “economic development” efforts.
Issue 3 proposes to set aside certain designated districts which will be governed by appointed boards instead of by the usual laws of Arkansas (including its tax laws), in the hope that these boards will be able to leverage the economic resources of those districts to bring in new business and stimulate economic growth.
When poor counties have tried this kind of strategy in isolation, the results have been mixed at best (5)(6). But putting those counties in direct competition with wealthy counties could be catastrophic.
Voters should reject this proposed expansion of new government authorities empowered to grant taxpayer dollars, forgive debt, exempt from taxes, and tax as desired – especially when the specific tool proposed will rob the neediest counties of the little competitive advantage they might otherwise have had.
Face it—we need less government, not more. All prosperous businesses (ones making a profit and paying taxes) want less government regulation and lower taxes! So, why not reduce current taxes on all Arkansas businesses and reduce regulations rather than taking their money away from them to give to a few select/chosen private companies at the top?
Vote “NO” on Issue 3.
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