MONTGOMERY — The House adjourned Thursday after passing job-related economic incentive bills and will return Tuesday to consider a measure designed to convince Goodyear Tire & Rubber Co. to continue investing in its Gadsden plant.
Three days into the 2012 legislative session, the House got a quick start on a package of job-creating bills, but not without protests that the legislation would divert needed education and general government tax dollars.
The bills included a proposed constitutional amendment by Rep. Barry Mask, R-Wetumpka, that would authorize tax incentives to new, expanding and existing industries that job recruiters hope will induce Goodyear to invest in its Gadsden plant that employs about 1,500.
Accompanying enabling legislation would kick in if voters approve the constitutional amendment in November, assuming the measures pass the House and Senate.
The constitutional amendment cleared its first vote hurdle Thursday and will be considered when the House returns at 1 p.m. Tuesday.
Sen. Phil Williams, R-Rainbow City, has a similar measure pending in the Senate.
The accompanying enabling bill to Mask’s amendment would allow the governor and the state finance director to approve state income tax withholding incentives that companies could use to plow back into their operations for up to 20 years.
Gadsden-Etowah County Industrial Development Authority Executive Director Mike McCain said 19 other states including Georgia and Mississippi offer similar incentives. He said, “We’re losing projects to them as a result.
“We want to persuade Goodyear to continue investing in and modernizing its Gadsden plant,” McCain said. “To obtain such investments for their Goodyear plants, Kansas and Oklahoma each used this incentive to help reduce company costs.”
McCain said Goodyear invested $150 million to modernize its Lawton, Okla., plant and $250 million to modernize its Topeka, Kan., plant. “Alabama needs the same mechanism to help persuade Goodyear to do the same here,” he said.
New and expanding industries would be able to use up to 90 percent of their employee state income tax withholding, and an existing business would be able to use up to 75 percent of employee state income tax withholding if it stays here.
Democrats discussed each bill long enough to register objections. “I believe in transparency, but I want to know exactly what we’re paying for,” said Rep. Patricia Todd, D-Birmingham.
Rep. Chris England, D-Tuscaloosa, told Rep. Dan Williams, R-Athens, sponsor of a data center incentive bill, “We ought to be uncomfortable writing blank checks,”
Alabama Education Association Executive Secretary Henry Mabry questioned the measures. “These take money from education and give it to these (industrial) plants when we don’t even have any money to buy supplies for teachers and fix leaking roofs,” Mabry said.
House Speaker Mike Hubbard, R-Auburn, responded, “I don’t know why anyone would be against efforts to create jobs, particularly a group that says it supports education.”
One bill that passed 72-18 would give tax incentives designed for Mercedes-Benz 20 years ago to data processing centers.
“Alabama was viewed upon as backward, redneck, prejudiced, and businesses had little to do with investing capital,” Rep. Blaine Galliher, R-Rainbow City, said. “By putting together a lucrative package, Alabama brought Mercedes and that immediately changed the global perspective.”
The first bill passed by the House would change the name of the Alabama Development Office to the Department of Commerce and change the ADO director’s title to commerce secretary.
A bill sponsored by Rep. Bill Roberts, R-Jasper, that passed 80-3 would authorize coal mining companies to use existing tax incentives originally passed in 1992.
A third bill sponsored by Rep. Paul Lee, R-Dothan, would exempt transport aircraft and helicopter repair businesses from state sales tax. The bill could exempt between $4.8 million and $7 million per year, money that goes to the Education Trust Fund. The bill passed 80-8.
Bills approved Thursday go to the Senate for assignment to committees.
By Dana Beyerle
Times Montgomery Bureau