White County economy charging hard

By Stephen Zeigler

The Daily Citizen    4 Dec 2004       

White County Treasurer Waylon Heathscott is excited about the county government's sales tax revenue over the last months because he sees it as a harbinger of things to come in the new year.

"Our sales tax is one of the best determiners for how the economy is doing," he said last week. "The past year's sales tax went up 4.3 percent over the year before, but the economy started kicking in here in the last four months and in that time it's been up 8.2 percent from last year. Our sales tax should be going up about $20,000 a month."

Heathscott isn't alone in his optimism. Buck Layne, president of the Searcy Chamber of Commerce, is enthusiastic about the manufacturing side and the rise in single family housing starts, as well as the prospects of regional marketing for new industry.

Local bankers Donnie Miller and Charles Green believe interest rates are likely to remain low until at least mid-year and are enthusiastic about the growth of the medical community in Searcy.

Real estate broker Jimmie England believes the slow, steady growth of Searcy protects it from the drastic highs and lows so traumatic for other parts of the country. The presence of Harding University and the two hospitals also insulate Searcy, said Green.

And according to statistics from Dr. John Shelnutt, unit head and senior research specialist at the University of Arkansas Institute for Economic Advancement, White County's population has already topped 70,000 and should reach 72,000 by the end of the year. With White County's unemployment rate historically lower than the state and the national rates, that's another good sign.

"Our (sales tax) totals are always two months behind," said Heathscott, "So we won't see December results until into in January. "Lowe's isn't reflected yet. When it is, you'll see a big jump. Lowe's is bringing people from Jackson County, Woodruff County, Independence and all over."

A rise in sales is especially good for county law enforcement, since the new half-cent sales tax passed in October went into effect Jan. 1

"We were predicting a jail tax producing 3.2 million," said Heathscott. "Based on these figures, we'll get $3.34 on the half cent alone. Throw in Lowe's for next year and we'll pay off that jail pretty quick, won't we?"

Layne said 2003 brought 131 new housing starts, not counting December. That's up from 86 in 2002, 91 in 2001, and 86 in 2000.

"The low interest rates tapped pent-up demand from previous years, with people moving out of apartments and into homes," he said.

While the manufacturing side is very positive, Layne said, retail has had some problems.

"But I talked with three retailers yesterday and they said they had a good year," he said Tuesday. "But they had to work a lot harder. An insurance worker told me the same thing, that he had a good year but was working harder."

Searcy is in the process of losing ITT, which will close in April, Layne said. At one time, they had 300 employees and are now down to 50 or 60. Plateco. Inc. left two years ago and the Bryce Corporation left a year ago.

But Maytag added 280 employees in 2003, and the Chamber is working with an 11-county regional alliance, Central Arkansas Alliance, to market the region.

"We've found a regional concept of marketing is the trend because it's so costly to market by yourself," he said.

For one thing, the bigger the region, the more attractive it is to new industry, Layne said.

"This 11-county pool has a population of 900,000," said Layne.

The theory is that what's good for one community is good for the next.

"Economic development is all about improving the general economy of everybody," said Layne. "Every town's sales tax gives back to White County. Let's not draw a line and say 'this is Searcy, outside isn't us.' Seventy-five percent of people employed by Searcy industries are employed outside Searcy. When Maytag added 280 jobs, 75 percent of those are outside Searcy. They went because they were unemployed or underemployed, so what's a positive for Searcy is a positive for the county. We need the people who live in the county and we need the people who live in the city to make up a work force."

Miller said the driving force of Searcy's economy in recent years has been residential real estate, which impacts the whole economy.

"Venders are selling furniture and appliances and we see a lot of that with start-up buyers."

He is also enthusiastic abut the rise of agriculture.

"This year it had its first good year in four or five years. Not a lot of people employed in it, less than 3 percent, but I'd guess they put 15-20 percent of the income into the county. It looks like another good year in '04. Everybody had written it off, but it came back this year."

"I think most bankers are optimistic," said Green. "At the end of June, deposit totals of each bank are posted on the Internet. We Increased in Searcy by $70 million last year."

Searcy's insulation from national extremes provided by it's medical and education communities is a lot of what gives encouragement for years ahead. Searcy's growth has been slow enough to prevent it from suffering traffic tangles and related problems experienced by other cities.

Conway is an example of a city that grew too fast and now can't handle the traffic, said Miller.

"Searcy is a slow, steady growth city," said England. "We don't have many bad years but no extremes like California and Colorado. Searcy is really good for economic growth - you can depend on what's going to happen. We don't get many surprises around here. We're a bargain area. Our top structure is compared to other states is just wonderful.

"This is my 10th year in real estate market, and I haven't seen a really down year yet. This year has been a little down from last year. Used housing is down, but new is up because of the interest rates. Searcy doesn't have a lot of millionaires but there are a lot of upper-incomes, empowered to buy high, and a lot of retired people are comfortable with buying $150,000 homes," said England.

Still, Miller and Layne believe Searcy must expand it's city limits if it's economy is keep healthy.

"We'll pick up additional property and when we get to 20,000 (population) it puts us on the radar to a lot of businesses that won't look at smaller cities," said Miller. "You can zone and regulate and have orderly growth. The city will get a chance to bring areas in under zoning codes."

But Layne said Searcy must be careful where it expands because, for one thing, of the effect on the city's fire insurance ratings.

"We have a Class Two fire insurance rating, which is very good. We're one of only three cities that good in Arkansas, and that lowers premiums for businesses and residential both. White County is a Class Nine."

Miller says he worries, too, about how the housing boom can be continued.

"One of the critical things I see is, we're running out of additional subdivisions for entry-level buyers, those who can afford $90,000-$130,000," he said. "Lots built out west behind the high school are getting filled up, so somebody's got to invest in areas where lack of sewer is limiting expansion. Developers have to invest in infrastructure, and it takes two to three years to get a subdivision started."

To be sustained, growth has to be planned, Miller said.

"If the housing demand stays at the level it is now, we'll likely have a shortage in two or three years."

But when it comes to new industry, Layne said, water and sewer needn't be the problem some believe it to be.

"Anytime you go beyond where its available it has to be provided, but to say that's the reason not to choose a location is not the only issue, because it's over-comeable," Layne said. "We (Searcy) own 84 acres out by the airport, but if a company comes to town we'll spend a million dollars to extend water and sewer to that site."

Building the new White County Detention Center in Searcy's industrial complex could be a bigger problem, Layne believes.

"Let's say the ITT bidding were right next to a jail. Searcy has a town, but so does Conway, so does Hot Springs. Companies are looking for a reason to mark a city off their list," said Layne.

"A jail is a negative," he said. "Industry relocating can go anywhere in the world. It's like if I'm buying a car or a house, I want to know certain advantages. You want to have your community as attractive as possible. That the jail is a negative may only be a perception, but perception is reality. A company is more likely to go somewhere without a jail That's a reality."

But perceptions can work the other way, too.

"People are more confident now they'll keep their job, so they go out and spend," Heathscott said. "That's all a recession is, it's in your mind that things aren't good and going to get worse.

"Listening to media makes people react to buy or not. I'm optimistic because I'm a news man. I read a lot of papers, watch CNBC and the stocks, and they're optimistic.

"I have to think the media are what inflame people."

Sunday, January 4, 2004