Industrial incentives questioned Lawmakers urged to present united front on $750 million cap
BYLINE: KIM CHANDLER News staff writer
MONTGOMERY - Gov. Bob Riley's finance director urged legislators Monday to present a united front as the state competes with Louisiana for a 2,700-employee German steel mill.
''We need to keep it on a professional plane so we don't send the wrong attitude or information to the people we are trying to woo here,'' said Finance Director Jim Main.
But some of the lawmakers who gathered in special session to consider industrial incentive legislation already are raising questions.
Sen. Roger Bedford, DRussellville, said Riley has not provided enough details about how money would be used under his plan to expand the state's bond-issuing capacity from $350 million to $750 million.
''If the people think all you are going to do is create a $400 million slush fund for Gov. Riley, they will kill it,'' Bedford said.
The governor is asking legislators to approve a constitutional amendment that would increase the Capital Improvement Trust Fund's borrowing cap to $750 million. The extra money would be used to provide incentives for German steelmaker ThyssenKrupp and other companies to locate in Alabama.
ThyssenKrupp is considering locations in Alabama and Louisiana for the nearly $3 billion steel mill. Louisiana Gov. Kathleen Blanco left last week for a trip to Germany. Riley recently returned.
''It would be the largest economic development project in the history of the United States that is not a government project,'' Main said.
Main said company executives are watching Alabama to gauge elected officials' attitudes as well as the size of the incentive package the state produces.
Riley cabinet members said negotiations must remain confidential for a time.
Another potential issue for legislators is representation on the five-member commission that oversees the trust fund. Sen. Rodger Smitherman, D-Birmingham, said there will be discussions about increasing the number of legislators on the commission.
A Riley spokesman said the governor would oppose any such changes. ''It works just fine the way it is,'' Jeff Emerson said.
The commission is made up of the governor, the director of finance, the commissioner of revenue, the chairman of the Senate Finance and TaxationGeneral Fund Committee, and the chairman of the House Ways and Means-General Fund Committee.
Main told legislators it is important to pass the legislation quickly.
In addition to ThyssenKrupp, Hyundai is considering building an engine plant in the Montgomery area and another company is considering a location in northwest Alabama for a plant that would employ 1,500.
''We have three large projects that are time sensitive,'' Main said.
Referendum by June 5
A constitutional amendment requires approval by the Legislature and by Alabama voters in a statewide referendum. Main said lawmakers need to approve the legislation quickly so people can vote on the constitutional amendment on June 5.
Despite the disagreements, many legislators said they expect to get the governor's bill approved in five days.
''I don't think we'll get bogged down,'' Sen. Hank Sanders, DSelma, said.
Riley's session call also includes bills to create irrevocable
trusts to pay health-care costs for retired teachers and state workers.
The state government faces an estimated $20 billion bill in coming decades for state retirees' health insurance.
Creation of the trusts should assure bond-rating agencies the state is addressing the looming cost of health care for retirees, Riley officials said.
EMAIL: kachandler@charter.net
ON THE AGENDA
Lawmakers are considering three proposals:
Amendment to increase bonding authority of the Capital Improvement Trust Fund from $350 million to $750 million to pay for economic development incentives. The bill would set a June 5 referendum.
A bill to create irrevocable trusts to pay future healthcare costs for retired teachers and state workers.
Amendment to protect the trusts so the money could not be used for any other purpose.