Members of the Arkansas Legislative Black Caucus said Monday they're concerned that Gov. Mike Beebe's proposal to issue state-backed bonds to attract a $1 billion steel mill doesn't include a requirement that the company hire African-American workers.
The lawmakers said they were unhappy that economic development officials had not negotiated the requirement as a condition of Big River Steel receiving the state's multimillion-dollar incentive package.
Beebe is set to submit a proposal to lawmakers this week asking them to approve $125 million in state-backed bonds. About $50 million of that money will be paid back by Big River Steel while the state will be on the hook for the rest. Arkansas is also offering tax breaks for the cost of building materials and utility costs.
Lawmakers have increasingly pledged support for the project, which will be located in Osceola. But at a meeting with state economic development director Grant Tennille on Monday, some lawmakers in the black caucus decried a lack of representation of African-American workers in the proposal.
African-Americans make up nearly 54 percent of the population in Osceola and 34 percent in Mississippi County, according to the 2010 census. The median household income is $32,528.
"We want something in there that says we're going to be a part of the deal," said caucus member Rep. Reginald Murdock, D-Marianna.
Under the proposal, the company has agreed to employ 525 workers with an average annual salary of $75,000. Big River Steel will have to keep that promise for at least 15 years or will be penalized, Tennille said.
Sen. Joyce Elliott, the vice chair of the black caucus, said that it was the state's responsibility to ensure that the interests of minority workers were protected as it does business with Big River Steel.
"If all they want to do is make money, and they have no sense of obligation to the social and economic well-being of the folks who are in the areas where they are going to make the money, that is an expectation that has been set up by the state," Elliott, D-Little Rock, said.
She said the state should make a requirement to hire minority workers.
"People are going to push back and say, 'No, we don't want to do this,' " Elliott said about the company. "I think it's important that we push back and insist, 'Yes, you will do this.' "
Rep. John Walker, D-Little Rock, said the lack of hiring requirements in the steel mill proposal was emblematic of Arkansas' larger, systemic failure to hire African-Americans.
"Do you want to perpetuate that kind of system when you go to the table to negotiation with these people?" he asked. "Or, do you want to let it known that our state policy is one for inclusivity and fairness and that our people who live in the areas have to be well-treated and well-regarded and well-respected and that means they have to be potential hires."
Page 2 of 2 - Tennille told the caucus that adding workforce quotas — or any other hiring restrictions — would likely sink the deal, but said it was in the Legislature's purview to make that decision.
"The question of quotas or set-asides was raised very early on as something that was not going to be part of the discussions on the company's side," he said after the caucus meeting.
Tennille pointed out that Mississippi has offered the company $160 million dollars in incentives to set up business there and doesn't have hiring quotas in its agreement.
"If there are members who feel like these issues are ones that they want to surface, it's entirely appropriate for them to bring it up," he said. "And we'll just see how the company responds and react where we need to react."
House Speaker Davy Carter said he expected the governor to formally submit a proposal to the Legislature as early as Thursday. Lawmakers will then have 20 working days to analyze the project and commission an outside study.
Legislative leaders have selected four candidates to perform the third-party study, Carter said. The firm will probably be selected later this week, he said.
Lawmakers are not likely to vote on the project until March.