Amendment OKs incentivesPublished 12:05am Thursday, November 8, 2012
Let the new economic development begin – or at least that’s the message Alabama voters gave Tuesday with the passage of Amendment 2, which gives the state additional financial flexibility when it comes to attracting companies to the state for economic development.
Specifically, the amendment will help the state build incentive packages used to lure major employers to Alabama. In July, state and local governments provided $153 million in incentives to Airbus to support the construction of a $600 million facility in Mobile that is expected to employ 1,000 full-time workers.
Gov. Robert Bentley said Tuesday’s vote allows Alabama to continue its industrial recruitment efforts “in a responsible way,” and that the overwhelming support for the amendment across the state reinforces the importance of what has been his top priority.
“The economy is still No. 1,” Bentley said.
Alabama’s state government already had the ability to raise money for economic development through debt issuance prior to Tuesday’s vote; however, those amendments only gave the state access to a one-time source of funds. Once the state hit the constitutional cap (set at $750 million), it could no longer borrow additional funds.
Amendment 2 converts that one-time funding source into a revolving source of capital.
Rick Clifton, director of the Covington County Economic Development Commission, likened the process to refinancing one’s mortgage. Now, the state is now able to go back to market to borrow additional money as it pays down its existing debt. In the short term, that could increase the amount of funds Alabama can access for economic development from $30 million to $160 million.
“What it means is that we’re able to continue efforts that we’ve been able to generate in the past,” Clifton said. “Think of it this way, like refinancing a house and taking advantage of unprecedented low interest rates. By refinancing the bonds, the money it frees up is available to attract new businesses.”
Clifton said by passing the amendment, it reaffirms that the state is ready for business.
“I think it’s what allows us to keep an Alabama advantage when it comes to attracting business,” he said. “We attended an air show in Berlin because of the Airbus announcement. It was our job to get word out about Covington County and what we could offer those supplies of Airbus.
“We met with six members of the U.S. Consulate Office in the embassy from Berlin, and their first question at the Alabama booth was, ‘What is Alabama doing?’ Everywhere we go they want to know what state is doing to attract industry. That’s the kind of international reputation the state is getting. Passage of Amendment 2 allows us to keep funding projects such as Airbus, Mercedes, Hyundai and ThyssenKrupp. Obviously, we’re doing something right.”
Clifton said he will soon attend another Airbus supplier conference in Germany.
“What’s important and what I hope people realize is what we’re doing is keeping ahead and getting the word out about Covington County,” he said. “We have a lot to offer with our airport. We literally meet with people all over the world as they look to move to the U.S. for Airbus and other industries. What we want is for them to think of Covington County when it comes time to pick a new home.”