How Much Will Taxpayers Pay A Chinese Company To Locate In Arkansas

by Caleb Taylor: Arkansas taxpayers will pay approximately $3.2 million to a Chinese garment company that plans to create about 400 jobs in Little Rock, video statement by Gov. Asa Hutchinson today.

Hutchinson said in a statement today: I am thrilled to announce that Tianyuan has chosen Arkansas as their North American home. Arkansas’s strategic location will give them great access to the U.S. market and beyond.

According to the Arkansas Economic Development Commission (AEDC), here are the guidelines that the Tianyuan garment company must meet in order to receive Arkansas taxpayer subsidies:

• Hire 400 full-time permanent employees within 4 years of start of operations
• Invest $20 million for equipment, purchase building, and make capital improvements to the building
• Locate and operate an apparel manufacturing facility in Little Rock, Arkansas
• No specific location has been determined at this time

According to AEDC, here are all the taxpayer subsidies Tianyuan Garments will be receiving:
Five (5) years of Create Rebate @3.9% – estimated benefit is $1,590,000

• Tax Back Program – estimated benefit is $134,000 $1,000,000
• Infrastructure Assistance Grant for building improvements and/or equipment purchases at the selected building in little Rock, Arkansas
• $500,000 for training
• AEDC will provide assistance in the form of a letter of support from AEDC for Tianyuan’s applications for 20 work visas for Tianyuan’s employees
• PILOT (Payment in Lieu of Taxes) Agreement with Little Rock and Pulaski County to abate up to 65% of property taxes

According to basic math, the $3.2 million in taxpayer assistance equals $8,000 per job if the company meets that 400 full-time employee requirement. (Note: that $8,000 number doesn’t include the property tax abatement which hasn’t been calculated yet.)

To be fair, that $8,000 per job total is much better than previous deals the state has made in recent years; on the other hand, $3.2 million is still a lot of dang money to spend in Arkansas.

According to Hutchinson, the company hopes to be operational by the end of 2017.

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Additional Information On Suzhou Industrial Park Tianyuan Garments Co. (Tianyuan): Founded in 1998. In 2015, the company was named one of the top 100 garment companies in China. The company's primary activity is the production of casual and sportswear garments, including garments for Adidas, Reebok, and Armani. Tianyuan was one of several suppliers for the 2014 World Cup and for the Italian Olympic Team in 2016. Tianyuan has five facilities in China.
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Caleb Taylor is a reporter for The Arkansas Project an affiliate of the Advance Arkansas Institute, a nonprofit research and educational organization committed to advancing public policy based on free markets, individual liberty, and limited, transparent government.

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