By Roby Brock
Verizon Wireless South Central Region President Steve Smith said to “stay tuned” for changes in Arkansas related to his company’s $28 billion buyout of Alltel Corp.
“You will see things in the very near future. I’d like to give you specific dates, but I’m not going to do that today, but stay tuned,” Smith said. “There will be a lot coming down the road.”
He was referring to signage changes at retail locations and in customer billings.
Smith said he expects work force numbers in Central Arkansas to stabilize around 1,300 workers, including a major call center operation at the former Alltel campus.
February unemployment rate rises
The Department of Workforce Services released February’s jobless data showing that state unemployment rose another two-tenths of a percentage point from January to 6.6 percent. One year ago, Arkansas’ February unemployment rate stood at 4.8 percent. The U.S. unemployment rate took an even larger jump of five-tenths of a percentage point to 8.1 percent for February.
Rising layoffs and company closures contributed to the state rise in the jobless rate. The manufacturing sector was hit hardest as the state recorded 4,200 lost jobs in February. The trade, transportation and utilities sector saw a decline of 1,700 workers during the month.
SUTA rates to rise for businesses
The state received clarification from the federal government that if it accepts $59 million for extended unemployment benefits, then it can halt them once federal funding stops. Arkansas will also borrow as much as $82 million from the federal government for initial unemployment benefits after a state trust fund dried up after months of layoffs depleted the account.
To shore up the trust fund, legislators are raising unemployment insurance rates for Arkansas businesses to make up for a projected greater shortfall. A bill was approved in the state Senate to increase the amount of an employee’s salary that businesses must pay unemployment taxes on from $10,000 to $12,000, starting in 2010.
Lottery bill signed into law
Gov. Mike Beebe signed identical House and Senate bills into law to create an Arkansas Lottery to fund scholarships to Arkansas college students. With the new law, the lottery process turns to naming a nine-member lottery commission and a legislative oversight committee.
Beebe, Senate President Pro Tem Bob Johnson and House Speaker Robbie Wills each has three appointments to the lottery commission, which will select an executive director to oversee daily operations.
Johnson named his three picks on Thursday. They are former congressman, university president and state Supreme Court justice Ray Thornton, Morrilton businesswoman Patty Shipp and Little Rock lawyer Derrick Smith.
Beebe and Wills expect to name their appointments soon and the lottery could be functional by the end of this year.
Reduction in state revenues, tobacco taxes raise budget concerns
State finance officials cut their forecast by $118 million for the upcoming budget year stating that they expect the recession impacting Arkansas to last well into 2010.
In short, Department of Finance and Administration Director Richard Weiss told lawmakers to expect another $118.2 million, a 2.6 percent reduction, to next year’s $4.44 billion budget, but he did say that the current year’s $4.41 billion budget would be “unchanged.”
As they have stated for months, state finance officials say that larger income tax refunds, smaller income tax payments and reduced sales taxes are all playing a role in affecting future revenue projections.
DF&A officials also revealed that the $86 million in new tobacco taxes to fund health care programs would not meet expectations. They reduced the estimated tax increases to $72 million claiming that a federal cigarette excise tax increase contributed to the lower calculations.
ConocoPhillips CEOo unsure of Tyson Foods diesel fuel project
James Mulva, CEO of ConocoPhillips, said that he was unsure about the future of a joint venture between his company and Springdale-based Tyson Foods. The two companies initiated a $100 million alternative fuel initiative in 2007 to transform Tyson’s animal fat and waste into diesel fuel. Mulva said that uncertainty over federal tax incentives has hurt the economic viability of the project.
Mulva said the willingness between the two companies is there, but he’s unsure where the venture may go next.
“We remain working with Tyson’s and looking at technology, but I think the next chapter in that it is going to have to evolve and I’m not certain exactly where that’s going to go,” said Mulva.
Heifer to reduce work force
Little Rock-based world hunger relief organization Heifer International is planning a workforce reduction in the wake of the global economic crisis, but the extent of the cuts is not yet known.
A memo shared with employees of the organization from CEO Jo Luck outlined cost-cutting measures being taken as the non-profit struggles with a downturn in revenues.
“The reality of a reduction in force, which will occur by the end of this fiscal year, is painful but unavoidable,” the memo stated.
Layoffs loom at St. Vincent med center
Citing the national recession, the chief executive of Little Rock’s St. Vincent Infirmary Medical Center says the hospital could layoff up to 200 workers over the next two months. St. Vincent CEO Peter Banko said in a letter to hospital executives and staff the cuts in both vacant and filed positions would occur between April and June 1.
The layoffs follow short-term moves the hospital has made in recent weeks to ease its financial problems, including reducing hourly workers to 36 hours a week and having salaried staff to take three days off during March. Increases in bad debt and charity care coupled with fewer elective surgery procedures have contributed to declines in revenue and profitability.
IC Corp. cuts jobs in Conway
Navistar, the parent company of bus maker IC Corp., said Wednesday that a total of 170 workers were laid off from its Conway plant. The factory had been producing 16 buses per day, but production was cut in half recently due to the cancellation of a major order, according to plant officials.
IC Corp laid off 300 employees in January 2008 due to an industry-wide downturn in demand for buses.
P.A.M. insider takes controlling interest
P.A.M. Transportation Services Chairman Matthew Moroun has purchased a controlling interest in the Tonititown-based trucking firm, according to SEC filings made Wednesday. Moroun purchased an aggregate 106,187 shares through open market transactions and exercising options between March 6 and March 20 for a total personal investment of $509,684, the filing stated. He beneficially owns more than 4.71 million shares – 50.1 percent of the outstanding common stock, including options to purchase 10,000 more shares.
SBA hopes to help with stimulus funds
Representatives of the U.S. Small Business Administration came together in Little Rock to tout an arsenal of new and continuing programs under the agency’s purview aimed at helping state businesses. Arkansas District Director Linda Nelson said that “small business is too big to fail.”
She noted that requests coming into her office for assistance have tripled as the recession has worsened. Under the federal stimulus package, the SBA received $730 million to help small businesses nationwide. The money will be used for temporary fee reductions or eliminations on SBA loans and a variety of new loan programs.
