QACF Brings “No Increases” In Employment, Bundrick Says

By Caleb Taylor

What is the Quick Action Closing Fund (QACF) and what reforms should be considered to protect taxpayers?

Jacob Bundrick, a policy analyst at the Arkansas Center for Research in Economics, was on the Conduit News radio program Wednesday morning to answer these questions and more.

The QACF allows the state to provide cash grants to select entities in the hopes of attracting and retaining businesses within Arkansas. The state legislature has appropriated approximately $176 million to the QACF since it was created in 2007. The Arkansas Economic Development Commission has said the program is responsible for creating or retaining nearly 20,000 jobs in Arkansas.

In the interview, Bundrick discussed the findings of, “Do Business Subsidies Lead to Increased Economic Activity? Evidence from Arkansas’s Quick Action Closing Fund”  an academic journal article he co-authored with UCA Associate Professor of Economics and ACRE Scholar Thomas Snyder that was published in The Review of Regional Studies on March 6, 2018.

Bundrick said:

What we found was that these subsidies don’t actually stimulate increased economic activity here in Arkansas. There’s no increases in employment or establishments in Arkansas counties.

Bundrick also said the best policy would be to end the program and use the savings for tax relief or other governmental needs. However, there are incremental reforms to the program that can better protect taxpayers such as increasing transparency requirements and introducing subsidy limits on a per-job basis.

Bundrick said:

The lower the cap, the less risk there is that you overpay and end up losing money for taxpayers.

You can listen to the full interview here:

Bundrick is also the author of the ACRE policy review, “Tax Breaks and Subsidies: Challenging the Arkansas Status Quo”.