Riley calls incentives vote key to recruitment

BYLINE: DAVID WHITE and CHARLES J. DEAN News staff writers

MONTGOMERY - Gov. Bob Riley and his top budget adviser said Wednesday that Alabama could lose its chances to recruit dozens of industries to Alabama if state voters don't approve Amendment 1 Tuesday.

''The negative of a 'no' vote would be to all the 30 companies out there that we're in some stage of dealing with and trying to recruit to Alabama,'' said state Finance Director Jim Main, who declined to name specific companies.

Amendment 1, if approved by voters in Tuesday's statewide referendum, would rewrite Alabama's constitution to let a commission chaired by Riley borrow $750 million for industrial incentives, up from the current limit of $350 million. Lawmakers unanimously proposed the change in a special session of the Legislature that ended March 2.

In a speech Wednesday to the Birmingham Rotary Club, Riley said getting that extra $400 million in borrowing capacity would be critical for recruiting more companies to Alabama.

''Today, if we do not have incentives, we will not be competitive and you can literally take all these economic development projects we're working on off the table,'' Riley said.

The extra $400 million the commission could borrow if the amendment passes would be repaid from a fund that gets some of the royalties that companies pay the state on natural gas pumped from Mobile Bay.

Some of the extra money already has been pledged. Main said $195 million was promised to ThyssenKrupp, mainly for site preparation for the $3.7 billion steel plant the German company plans to build near the MobileWashington counties border. A further $15 million to $20 million has been promised to help build a $270 million engine factory at the Hyundai vehicle assembly plant in Montgomery. And $40 million has been promised for a potential project in northwest Alabama if it comes through, Main said.

Paying $250 million to $255 million for those three commitments would leave $145 million to $150 million in extra borrowing capacity to help attract some of the other industries Main said.

If voters reject Amendment 1, Main said, the Riley administration would somehow find the committed $250 million to $255 million from other sources, which he declined to identify.

''We will honor our commitments,'' Main said.

Madison County Commissioner Mo Brooks said he hopes voters will reject Amendment 1.

''Alabama enjoys a good reputation for business and industry, and we no longer must subsidize businesses (to the detriment of taxpayers) in order to overcome a bad image,'' Brooks wrote in a recent e-mail.

But Riley said 'yes' votes on Amendment 1 and a second amendment on Tuesday's ballot were vital for continuing recent progress in Alabama.

Trusts for health care

Amendment 2 would protect two trusts formed by state insurance boards. The trusts could help Alabama pay billions of dollars in future health-care costs for its retired teachers and retired state agency employees. If the amendment passes in the referendum, a guarantee would be written into the constitution that money in the trusts could be spent only on public retirees' health benefits.

''It would protect them from political raids,'' said Paul Hubbert, executive secretary of the Alabama Education Association teachers lobby. He's asking AEA members to vote for both Amendments 1 and 2.

EMAIL: dwhite@bhamnews.com