Category Archives: Business and economics

Casino vote makes strange bedfellows

Business and economics, Elections, Politics, State government

By Steve Brawner
© 2016 by Steve Brawner Communications, Inc.

There’s a lot more to this debate over the proposed casino amendment than just whether or not Arkansas should have more slot machines than it already does – which is quite a lot between Oaklawn and Southland.

Issue 5 would create a constitutional amendment authorizing the building of one casino each in Washington County, Miller County and Boone County. The casinos would be required to pay the state 18% of their net and would pay 1.5% to the city where they are located and .5% to their local counties. An Arkansas Gaming Commission would regulate.

The amendment’s backers, Arkansas Wins in 2016, say Arkansas should have casinos here because they’re already just across the border elsewhere – in Mississippi, in western Oklahoma; in Caruthersville, Missouri; and in Shreveport, Louisiana. Adding three casinos in Arkansas would keep Arkansas gamblers at home and attract some out-of-staters. A lot of people think going to casinos is fun. If they’re going to gamble, eat at buffets and go to shows, they might as well do it in Arkansas, employing Arkansans, boosting tourism and paying state taxes.

Politics makes strange bedfellows, and that’s definitely true with this issue. Opposed to the effort are faith-based groups such as the Family Council along with the state’s existing gambling providers, Oaklawn and Southland, which race horses and greyhounds on a part-time basis and operate casino-like entities full-time. The Family Council doesn’t want the gambling; Oaklawn and Southland don’t want the competition.

They’ll be working in parallel but not really together. The Family Council will spread through its grassroots network of churches its message that gambling leads to social ills – addiction, divorce, etc. – without the promised economic benefits. Meanwhile, Oaklawn along with Southland’s parent corporation in August donated a total of $109,500 to the Committee to Protect Arkansas’ Values/Stop Casinos Now. In fact, they’re the only donors listed in the required campaign filing with the Arkansas Ethics Commission. That money is funding a lawsuit in the Arkansas Supreme Court to disqualify the amendment.

Four years ago, a group with a similar name and the same chairman, former Arkansas Sheriffs Association Executive Director Chuck Lange, raised more than $1 million from Southland, so that $109,500 is probably just seed money.

The Committee’s messaging so far has focused less on gambling’s ills and more on what the proposed amendment does and doesn’t do. The amendment defines gambling as whatever is legal in Arkansas’ surrounding states and in Nevada, meaning Arkansas policymakers would be handcuffed in defining terms and setting limits. It would allow sports betting and alcohol sales.

Like previous casino amendments that have either been tossed from the ballot or voted down by Arkansans, this one is backed by those who would make money off it. It would embed in the Arkansas Constitution a permanent monopoly granted to two Missouri businessmen, Bob Womack of Branson and Jim Thompson of Blue Eye, and their successors and assignees.

That means no one else could operate a casino anywhere in Arkansas except those two along with Oaklawn and Southland. Those two existing casinos are limited by law, for now, to “electronic games of skill,” such as blackjack tables with electronic “cards” rather than those dealt by humans.

So expect to hear opponents use the words “out of state” a lot, even though Arkansas’ two current gambling establishments also are owned by out-of-state entities – Oaklawn by the Cella family of St. Louis, and Southland by Buffalo-based Delaware North.

All of this very easily could become moot. The issue is now in the hands of the Arkansas Supreme Court, which is considering whether the ballot title is misleading and whether the signatures were collected improperly.

In fact, all four voter-led ballot initiatives – this, two that would legalize medical marijuana, and one that would limit judgments in medical lawsuits – are being sued for one reason or another.

Will at least one of them be disqualified? History shows that’s a pretty safe bet.

Part of state’s deer population wasting away

Business and economics, State government

By Steve Brawner
© 2016 by Steve Brawner Communications, Inc.

One of the biggest stories in Arkansas this year involves four legs – and I’m not talking about the two apiece used by Donald Trump and Hillary Clinton.

I’m talking about those used by deer, a growing number of whom have a deadly, incurable neurologic disease that spreads easily.

Chronic wasting disease is caused not by viruses or bacteria but by a protein called prions that attack a deer’s brain, sort of like mad cow disease. Prions are spread through contact with an infected deer’s urine, feces, saliva, blood or carcass. They’re not living, so they can’t be killed, and they last a long time on the forest floor.

The Arkansas Game and Fish Commission has been watching this disease for decades as it started in the western United States and then moved closer. When an elk felled by a hunter tested positive last fall, Game and Fish Commission members took notice. Then in February, a seemingly healthy deer that appeared near Ponca and was oddly not afraid of people suddenly grew sick and died.

AGFC initially tested 266 deer in a 125,000-acre area and found 23 percent were infected. No other state has seen that high an initial detection rate. Among the concerns is that 12 of 48 fawns tested were infected. By comparison, Wisconsin sampled more than 14,000 fawns and found only 24 cases, legislators were told Monday.

More samples are being taken. Infected deer have been found in five counties – Newton, Boone, Carroll, Madison, and Pope, with Newton hit the hardest. The rest of the state so far is clean, but deer are mobile. The one case in Pope County was well south of the cluster of cases in Newton County.

Why is this a big deal? Arkansas is home to 500,000 licensed deer hunters, and that’s not including those under 16 who aren’t required to buy a license. The state last year issued 21,515 nonresident big game hunting licenses to out-of-state hunters. Deer hunting not only is big business, but it’s a lot of small businesses. It’s also an important part of the state’s culture – an activity where grandparents, parents and children spend time together in places that often don’t have a good cell phone signal. Many schools close at the beginning of deer season.

The good news is that, currently, you and I probably cannot catch chronic wasting disease. Remember, it’s caused by a protein, not a virus that could mutate and jump from one species to the next. Also, the disease hasn’t spread to livestock in the wild. On the other hand, the prions can withstand 1,000-degree temperatures, so they can’t be cooked out.

Now state officials are trying to respond to a disease that can’t be cured or eradicated. On Friday, the Game and Fish Commission will vote on a set of regulations meant to limit the spread. Among the proposals would be to allow hunters to kill more deer and elk to thin the herd.

That proposal shouldn’t be too controversial. However, another would require landowners who erect high fences to leave openings so deer can move freely in and out. The idea is to reduce the chances that a deer will be stuck in captivity in an enclosed area, where it would be more likely to come in contact with an infected deer’s body fluids or carcass.

The idea is not well fleshed out, and I’m not sure I understand the logic. Wouldn’t it better for a dying deer to be trapped rather than roaming free? More importantly, several otherwise sympathetic legislators who were informed of the proposal in a committee meeting Monday raised objections regarding private property rights. People who want to build fences on their land ought to be able to do so, they said. We’ll see if that particular idea gets scrapped.

So let’s sum it up. There are many sick deer in part of the state. The disease is fatal, incurable, difficult to contain and likely to spread. But it supposedly won’t make us or livestock sick, and, for now, there are still 70 counties in our Arkansas home where the deer play.

Sorry for the discouraging word.

Cuba: trade embargo, or free trade?

Business and economics, Politics, State government, U.S. Congress

Rick Crawford
Rick Crawford
By Steve Brawner
© 2016 by Steve Brawner Communications, Inc.

U.S. Rep. Rick Crawford’s 1st District in eastern Arkansas is home to half the nation’s rice acres. Cuba imports 400,000 tons of rice a year, mostly from Vietnam. So yeah, he’s for opening up trade to Cuba.

Speaking by Skype last week to a pro-trade-with-Cuba gathering at the Winthrop Rockefeller Institute on Petit Jean Mountain, Crawford said the trade embargo, in place since Oct. 19, 1960, has punished American producers instead of the Castro regime. Shipping rice from Vietnam take 36 days, versus the 36 hours it would take to ship Arkansas’ better, fresher rice, but the market is closed. Crawford, a member of a pro-Cuba trade congressional working group, has sponsored legislation that, among other provisions, would let Cuba buy rice on credit rather than requiring it to pay cash, which it doesn’t have. He’s traveling April 5-9.

Crawford isn’t the only Arkansas policymaker favoring a new approach to the communist country 90 miles off Florida’s shore. Sen. John Boozman also supports a change. He says the 55-year embargo hasn’t removed the Castro brothers from power, so it’s time to try something else – trading goods and ideas. The United States does business with worse regimes, he says, including Saudi Arabia and China. Last year, Gov. Asa Hutchinson – who helped enforce the embargo as undersecretary of the Department of Homeland Security, led a delegation of about 50 Arkansas business and government leaders to Cuba. He favors more trade without completely lifting the embargo.

Naturally, these policymakers have allies in the business community, including Arkansas Farm Bureau and Riceland Foods, both of whom see Cuba as a huge market.

Two Arkansas policymakers disagree. U.S. Senator Tom Cotton criticized President Obama as he traveled to Cuba last week, pointing out that the Castro regime arrested a human rights activist shortly before the trip. Rep. Bruce Westerman, who represents the 4th District, says opening up trade with Cuba rewards a regime that is still in power and still guilty of human rights abuses.

The state’s two other congressmen are still on the fence, sort of. Rep. French Hill, who represents the 2nd District, told KARN radio the other day that Arkansas will benefit from opening up the Cuban rice market, but he needs to see a path toward democracy and a market economy, and he’s concerned that there doesn’t appear to be a plan to make reparations to those who lost their businesses to the Castro regime. Rep. Steve Womack, from the state’s 3rd District, is still weighing the benefits and pitfalls of opening up trade, his office said.

The trade embargo began more than 55 years ago under President Eisenhower. In that time, all that’s been accomplished is that an ailing Fidel Castro was replaced by his brother, Raul. During that time, the United States has had 11 presidents. Meanwhile, the Soviet Union has gone from world superpower to historical artifact (for the moment); China has gone from closed communist country to manufacturing powerhouse; Europe’s economic borders have largely been erased; and the two Germanies have become one.

So the world has changed a lot – all except Cuba, where the Castros are still in charge.

And yet even Cuba’s past doesn’t necessarily limit its future. At the Winthrop Rockefeller Institute, Ruben Ramos Arrieta, Cuba’s minister counselor at its Economic and Trade Office in Washington, said the country has been undergoing a “transformation” since 2008. He said 80 percent of its agricultural land is state-owned, but 70 percent of that is now being used by private farmers and cooperatives. Whether or not that’s accurate, it’s notable that he described the private sector positively and that he spoke of “transformation” rather than “revolution.” Michael Bustamante, a Yale University professor with family in Cuba, said Cubans have an entrepreneurial spirit that helps them maintain an “a-legal economy” that is often ignored by the government authorities. Who knows what they could accomplish given freedom and a free market?

It’s said in sports that Father Time is undefeated. The same is true in politics. Raul Castro has said he’s leaving office in 2018, and even if he doesn’t, he’s 84 years old. Fidel Castro is 89. In the near future, somebody else is going to be Cuba’s leader.

The question for policymakers is, would that person be more influenced by a trade embargo, or by free trade?

Related: Make Cuba thirsty.

In West Memphis, it’s all connected

Business, Business and economics, Education

Junior Jeremy Paige is learning to become an aircraft mechanic, while senior Summer Abram plans to use the skills she learned in high school as a diesel mechanic to pay her way through school as she becomes a psychologist.
Junior Jeremy Paige is learning to become an aircraft mechanic, while senior Summer Abram plans to use the skills she learned in high school as a diesel mechanic to pay her way through school as she becomes a psychologist.
By Steve Brawner
© 2016 by Steve Brawner Communications, Inc.

The late Lt. Governor Win Rockefeller used to say that the education system is like a string of water pipes laid end to end but not connected. In West Memphis, they’re connected.

The high school, known as the Academies at West Memphis, has a conversion charter, which is an arrangement with the Arkansas Department of Education where some of the usual rules don’t apply and the school can experiment and innovate.

Students there choose pathways that prepare them for a career and then can spend up to six of their eight high school periods a day at Arkansas State University Mid-South, the local community college 1.3 miles down the road. In fact, it’s possible for a 10th-grader, on the first day of school, to get on the bus and sit in a college class before ever sitting through a high school one.

High school students can take tuition-free, for-credit college classes at ASU Mid-South thanks to the Thomas Goldsby Scholarship, funded by a local oilman. If they’re dedicated enough, they can receive a college associate’s degree on the same stage where their receive their high school diploma. Then, because of ASU Mid-South’s connection with the ASU system and with various other four-year schools, they can further their education and receive a bachelor’s degree, even a master’s, on that same college campus.

In effect, West Memphis has become a college town without the state having to build a huge campus with dorms and a football stadium.

Most students who make the eight-minute bus ride from the high school to the community college aren’t seeking a college degree. Instead, they’re taking career-oriented classes in a variety of fields. For example, five high school students earned welding certifications last year and then after graduating went to work at TrinityRail Maintenance Services in Jonesboro earning about $18 an hour.

Perhaps the most interesting connection in West Memphis is the aircraft mechanics program shared by the high school, the college and FedEx, the Memphis-based package deliverer founded by Arkansas native Fred Smith. The company has invested $250,000 at ASU Mid-South to build a new FedEx Aviation Technology Center, which when completed this year will include aircraft hangar space and classrooms. It even donated a Boeing 727 plane whose shell is sitting on the college campus after being disassembled and transported by a Stuttgart company.

This means that, as part of his high school education, junior Jeremy Paige is learning to maintain a jet airplane. This time next year, he’ll be crawling around the plane as he earns his certification in airframe mechanics – the aircraft’s structure. After he graduates high school, he’ll further his education at ASU Mid-South and earn his certification in powerplant mechanics – the engine. With those two certifications, he can go to work for FedEx and make a six-figure income.

Meanwhile, senior Summer Abram is learning to be a FedEx diesel mechanic. She won’t make the same kind of money as Paige, but she has different long-term goals: Work while taking college courses and playing basketball at ASU Mid-South and studying to become a psychologist. If it all works out, she’ll be making a living at FedEx while in school instead of piling up student debt.

Is there a downside? Long term, perhaps there’s a danger that the pipeline will become too connected – that the system could just funnel students straight from school to their corporate sponsors’ workforce.

Of course, those sponsors are offering up to six-figure opportunities. Moreover, under this model, students have many choices other than a simple high school diploma, which is worth less than it used to be. As Dr. Glen Fenter, who was ASU Mid-South’s chancellor when all these deals were made, said, “The most powerful model for combatting the lingering vestiges of poverty in this country is to speed up the educational process, particularly for poor students.” Get them ready to earn a paycheck in a good job, he said, and then they can always travel different pathways from there.

How to do that? In West Memphis, they’re connecting high school to college and career opportunities, using a 1.3-mile pipeline and, for some, a jet airplane.

For more stories about how Arkansas schools are using innovative techniques to teach students, check out:

Goals, not grades, are the focus at Warren.

A marvelous day in a Marvell school.

No Child in Flippin left behind.