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UCA dedicates itself to academic vitality, integrity, and diversity. Arkansas Center for Research in Economics. What are government revenue and spending? Disclaimer The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of the University of Central Arkansas nor are they endorsed by the University of Central Arkansas. Follow Us! Tyson foods, the world's largest poultry producer and processor, is located in Springdale.
Manufactured paper products paperboard boxes, paper rank second after food products. A wide variety of other products are manufactured in Arkansas. Natural gas is Arkansas's most important mined product.
Most natural gas is mined in the northwestern part of the state. Petroleum is the second most valuable product mined in the Arkansas. Most of the state's production is from large oil fields along the southern border with Louisiana , another leading petroleum state. Bromine used in dyes, photograph development, gasoline additive and crushed stone are other important mined products.
Arkansas is a leading producer of bromine. Finally, the failure of the state to establish and fund public education resulted in a largely illiterate work force, although at a time when most employment was agricultural, the economic liability probably was limited.
In spite of the obstacles, a merchant class arose in the towns. Philadelphia, probably because of family connections, loomed large in supplying merchants, who typically made one trip east each year to arrange for merchandise. Scotch- Irish Presbyterians and Jews rose to prominence. Their response to the paroxysms of Southern nationalism that led to secession was best demonstrated then Mrs. Typically, the cry for modernization came from the Whig Party , but even Whig planters preferred to invest in land and slaves rather than industry.
Pro-industrial sentiment came largely from newspapers. Perhaps the most conspicuous resource was water power, of which Arkansas had an estimated 1. Before the Civil War, gristmills, mostly in the Ozarks, constituted the primary tapping of this resource. Merrill used water to drive a saw, a gristmill, a flour mill, a cotton mill, and for carding wool and spinning thread.
The county responded with a hate campaign claiming that he charged too much and was not sufficiently patriotic. During the Civil War, Merrill sold out and moved to Texas. The only other comparable establishment was a steam-powered 1,spindle cotton mill at Van Buren Crawford County that employed over thirty workers. It burned during the Civil War. The Civil War prompted several enterprises. Home production of cotton depended on cotton cards, an item in short supply but produced by a factory in Camden at the rate of eight to twelve a day.
Medicines, including blue mass and castor oil, were manufactured at Arkadelphia. Saltpeter, processed from bat guano found in Ozark caves, was one of the vital elements for making gunpowder, but guerrillas disrupted production. The war did not promote modernization in Arkansas as it did in the North. Between and , the first completed roads reached the state. From to , railroads penetrated to all but one county, Newton County. In , Arkansas had miles of track; in , the figure was 5, In the aftermath of this connectivity came the collapse first of cottage industries.
Mass-produced hats, shoes, furniture, and other consumer items put local craftsmen out of business. Home industries took longer to extinguish, for only when rural residents had access to ready money could they buy rather than make or grow items.
The rural country store offered cash or credit for such items as eggs, railroad ties, hides, and furs while offering steel-tipped plows, hardware, and canned goods. The extension of credit often was the first step for the storeowner to become the lord over sharecroppers.
Indeed, in the Delta, most necessities came from the store or, as often it was styled, the plantation commissary. Fully ninety-six percent of the business was done in the last four months of the year harvest time. Across the state, merchants typically closed one day a week. Rural shoppers went into town on Saturdays, and it was customary to stay open even to midnight to get the last dollar. The greatest changes took place in timber.
The first steam-powered sawmill opened in Helena Phillips County in Most mills until the s were water powered, and an output of 5, board feet a day was considered exceptional. Transportation limitations meant most mills served buyers within twenty miles. Even by , timber or related products far outranked all other industrial products.
In the s, as Northern forests were decimated, timber companies from Michigan, Illinois, and Iowa moved south. Sawmill towns arose along railroad lines, or timber companies built their own lines. In the first phase of activity, it was cut and run. Entire towns such as Graysonia Clark County disappeared almost overnight. By , after the introduction of drainage in the Delta, some companies began making land sales.
By , the timber boom was over, and not until the s did modern replanting methods ensure that the industry would endure. In , seventy-three percent of Arkansas workers worked in the timber industry; by , that had fallen to fifty-seven percent. After , the industry was concentrated primarily in the Ouachitas and Gulf Coastal Plain ; large areas of the Delta by the turn of the twenty-first century had become nearly treeless.
The movement toward industrialization had many obstacles. Arkansas had local deposits of minerals, but local production often was limited. The state had brick factories but not a brick industry. Even in timber, Arkansas was primarily a source of wood rather than home to a furniture industry. Cottonseed was monopolized at the expense of farmers; a similar fate befell local tobacco. Unfavorable rail rates that lasted until put Arkansas industries at a disadvantage in the national market.
Indeed, national forces dictated that the South would remain a colonial economy. By the s, Arkansas was linked to the national economy. Town creation was virtually complete, and while there was enormous turnover in businesses, by , many family businesses that would endure well into the twentieth century had taken root. Such firms typically lasted for three generations. Opposition to the modernization persisted, however, and culminated under then-governor Jeff Davis , who used the Rector Anti-Trust Act to drive fire insurance companies out of Arkansas.
Early twentieth-century developments reflected a contrast between wildly exaggerated promotional claims and dry statistical refutation. He took to the premier national lecturing circuit, Chautauqua , with a message that emphasized every positive statistic and ignored fundamental realities.
National critics, led by H. Mencken, responded with jeers and jokes. The new century also saw new commercial developments. The two most important were utilities and petroleum. After creating a small telephone network in areas ignored by the Bell system and then selling out, he began buying small local electric companies that often provided minimal service; he built hydroelectric dams and, to ensure his profits, had the legislature create a state utilities commission that allowed him to raise rates almost at will.
Not until after was more than half the state served with electricity. Petroleum became important when the Busey No. From having no oil in , the state rose to fourth place in , but its rank declined precipitously. The absence of state regulation resulted in waste and fraud. The severance tax, the commonly applied tax on diminishable natural resources, was first long delayed and then pitifully low in comparison with other states.
The first local company to emerge with regional visibility was Lion Oil. Its founder, Thomas Harvey Barton , was a state political figure, sponsor of the state fair , and promoter of cattle production.
Two petroleum-related industries were represented in Arkansas. Command-Aire , an airplane factory founded in , at its height employed workers and turned out an airplane a day, until the Depression killed its market.
Unions appeared even before the Civil War. Officially, the first nationally recognized union was created by the typographers who manned presses. Other unions followed in railroads, coal mining, and even agriculture. Some farmers benefited from the advent of canning factories after Because American agriculture was so dispersed, monopolization in this field was long delayed. Although larger canneries had to meet federal standards if their goods crossed state lines, local firms for decades avoided federal Pure Food and Drug laws by restricting their sales.
More than workers, mostly women , were employed in canneries in Strawberries remained important until after World War II, and although apple production peaked in , peaches and apples remained important for decades. In the early twenty-first century, two watermelon-producing areas, Cave City Sharp County and Hope Hempstead County , labeled and marketed branded melons.
Overwhelmingly, they were tied to one crop, cotton, and its price collapse at the start of the Depression nearly brought about revolution in the South. The Great Depression The Great Depression began in Arkansas in the wake of the drought of , which cut farm income by sixty-two percent.
Many small-town banks could not cope, and a wave of closures followed. The biggest hit was taken by Aloysius Burton Banks, who had created a statewide chain of more than fifty banks.
Arkansans welcomed the New Deal, but the Agricultural Adjustment Act, written to benefit landowners rather than tenants, not only failed to attain social justice but helped usher out the family farm. In the newly established quota system, small- and medium-size farms found their cotton allotment too small to be profitable. In , federal aid to the states accounted for roughly 31 percent of all state general revenues. Federal aid varies from state to state. Figures from surrounding states are provided for additional context.
The table below breaks down estimated spending totals for fiscal year comparable figures from surrounding states are included to provide additional context. State spending in Arkansas can be further broken down by function elementary and secondary education, public assistance, etc.
Fiscal year information is included in the table below information from neighboring states is provided for additional context. Figures are rendered as percentages, indicating the share of the total budget spent per category.
The table below details the spending trends in Arkansas in previous years. State debt refers to any debt owned by a state government. Debt may include any financial obligations a state has that have not been paid, such as bonds issued by state governments, money borrowed by a state government that has not been repaid, or post-retirement benefits promised to state employees.
According to the U. This ranked Arkansas 41st among the states in debt and 44th in per capita debt. Broadly defined, a healthy economy is typically one that has a "stable and strong rate of economic growth" gross state product, in this case and low unemployment, among many other factors. The economic health of a state can significantly affect its healthcare costs, insurance coverage, access to care, and citizens' physical and mental health.
For instance, during economic downturns, employers may reduce insurance coverage for employees, while those who are laid off may lose coverage altogether. Individuals also tend to spend less on non-urgent care or postpone visits to the doctor when times are hard. These changes in turn may affect the decisions made by policymakers as they react to shifts in the industry. Additionally, a person's socioeconomic status has profound effects on their access to care and the quality of care received.
Arkansas, Louisiana and Mississippi had nearly equal median annual incomes from to Compared to neighboring states, Arkansas had the lowest percentage of residents that earned incomes of at least percent above the federal poverty line, 24 percent. Note: Gross state product GSP on its own is not necessarily an indicator of economic health; GSP may also be influenced by state population size. Many factors must be looked at together to assess state economic health.
The state operates on a biennial budget cycle. The sequence of key events in the budget process is as follows: [16] [17]. Arkansas is one of 44 states in which the governor has line item veto authority. The governor is required by statute to submit a balanced budget. The legislature is not legally required to pass a balanced budget.
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