Steel Mill Studies Underway

The Arkansas Legislature has contracted with two economic consulting firms to study the state’s plan to issue $125 million of GO bonds for a $1.1 billion steel mill project in northeast Arkansas.

The bonds, which were requested by Gov. Mike Beebe, would be the first under an economic development amendment to the constitution approved by voters in 2004.

Regional Economic Models Inc. of Amherst, Mass., will provide a cost-benefit analysis of the Big River Steel project near Oceola, with a focus on taxes, revenues, and the proposed economic development bond issue. The contract is for $29,000. Global Insights Inc. will study the capital costs, proposed financing, and whether the market can support the large steel mill. The cost is $48,750.

Amendment 82, which authorizes the tax-free debt for large projects, requires the Legislature to study requests for the economic development bonds before voting on a proposal. The measure caps state-issued GO bonds for a project at 5% of state general fund revenues in the most recent fiscal year.

House Speaker Davy Carter, R-Cabot, said lawmakers opted for two reviews to ensure all aspects of the financing are considered in the short time available for legislative review. The Legislature must decide on a proposal within 20 working days of receiving the governor’s request for bond financing.

“I don’t want any Monday-morning quarterbacking, so we’re going to try to get as much information as we can,” Carter said.

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Arkansas
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