Whether governmental entities may appropriate funds to finance economic development projects or services continues to be questioned even after voter approval in the 2016 General Election. Following the November General Election, the Arkansas Constitution was amended to allow a county, city, town or other municipal corporation to obtain or appropriate funds to entities such as chambers of commerce for the purpose of economic development. The funding of these endeavors had been a common practice across the state, including Mountain Home.
With this change to the state constitution, Senator Jane English of North Little Rock and Rep. Bob Johnson on Jacksonville took it a step further requesting an attorney general’s opinion asking if the amendment to the constitution also covered an entity funded by city revenues such as a museum or an Advertising and Promotion Commission.
In the response last week, Arkansas Attorney General Leslie Rutledge says in her opinion the governmental funding authority approved by voters extends to an agency that serves in a capacity such as a museum or A&P Commission. However, the AG notes a final determination will depend on the project or service to be funded and any other governing authority pertaining to the local governmental agency.
While the City of Mountain Home has previously directed funding to the Mountain Home Chamber of
Commerce, Mayor Joe Dillard says the practice has changed. He says about four years ago the council approved a request for a $15,000 annual appropriation for five years, with annual renewal approval required.
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Mayor Dillard says he does not have any plans to return to the former economic development funding practices in next year’s budget.
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Dillard says he feels like the private sector is the appropriate funding stream for these types of endeavors.
While the action to appropriate funding to the chamber of commerce was prior to his administration, he says he does recall chamber officials returning to council meetings to provide periodic updates on the use of the funding.
In addition, Mayor Dillard says it’s important to support existing industries.
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Mayor Dillard notes the City of Mountain Home has not received a request for economic development funding from the new chamber of commerce leadership.
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