LITTLE ROCK — A second independent analysis of a proposed $1.1 billion steel plant in northeastern Arkansas concludes that the state would see a return on the $125 million it is being asked to approve for the project.
The report by Regional Economic Models, Inc., released Friday to lawmakers, said the “net fiscal costs are relatively low compared to the economic benefits, and the increasing state taxes or decreasing spending to make the budget whole again to these degrees would have a smaller effect on the state’s economy than opening and operating the steel plant.”
“The drag on (state) budget and the process of it has, overall, less impact than the additional jobs, GDP, and economic vitality associated with the investment operations,” the report said.
Thursday, an summary analysis by IHS Global Insights suggested the Arkansas Economic Development Commission overestimated the benefits of the $125 million in incentives the state is being asked to approve to close the deal.
A joint meeting of the Senate and House agricultural, forestry and economic development committees is scheduled for Monday. The consultants, representatives from Big River Steel and AEDC officials are expected to attend.
Gov. Mike Beebe and principals of Big River Steel introduced the proposal earlier this year. The deal, which officials say would bring 2,000 construction jobs and 525 permanent jobs averaging $75,000 a year when the plant is operational, is contingent upon legislative approval of a $125 million bond issue under provisions of Amendment 82.
Legislative leaders hired the independent consults to analyze the financials of the proposal.