Incentives could cost $60 million

Lawmakers today will debate a measure to benefit big businesses in poor counties

State legislators are considering a proposal to make as much as $60 million available to a handful of large businesses in poor counties over 10 years as an incentive to continue investing in their plants.

Gov. Mike Easley and House leaders negotiated a bill Monday that would allow Goodyear Tire & Rubber Co. in Fayetteville, Bridgestone Firestone in Wilson County and maybe a handful of other businesses to qualify for cash grants to offset some expenses and additional sales taxes they would pay stemming from their expansions.

Easley, a Democrat, and legislators are discussing alternatives to a bill the governor vetoed Aug. 30 that would have allowed Goodyear to qualify for up to $40 million over 10 years if it invested at least $200 million in the plant.

Legislators returned to Raleigh on Monday to decide whether to override Easley's veto but spent most of the day trying to write a compromise incentives bill.

The legislature did not vote on anything Monday but will come back today to debate the compromise bill.

House Speaker Joe Hackney, an Orange County Democrat, said that Easley and House negotiators had reached an agreement but that the Senate wanted to make some changes.

"It's not all together yet," Hackney said.

Lobbyists for Goodyear, who met throughout the day with legislators, would not comment on the compromise. Rep. Rick Glazier, a Fayetteville Democrat who sponsored the initial bill benefiting Goodyear, said the company approved of the proposed compromise.

"This compromise is going to be an incentive package that will be sufficient" for the company, he said.

Dan MacDonald, a spokesman for Bridgestone Firestone, said the company's main concern is that the state put in place an incentives policy that treats Goodyear and Bridgestone Firestone equitably. "My understanding is that the situation is fluid," MacDonald said.

Based on terms of the tentative agreement, Goodyear could receive up to $24.2 million over 10 years and Bridgestone Firestone up to $22.5 million.

Sen. Tony Rand, a Fayetteville Democrat and one of the most powerful lawmakers in the Senate, indicated he approved of the compromise, in general.

"We've arrived at a framework," Rand said. "We'll see about the details."

Under the proposal, companies in the state's poorest counties would qualify for incentives if they agree to make investments of $200 million over six years, have at least 1,500 full-time employees and pay at least 140 percent of the average wage in their counties.

The companies would get grants to offset 100 percent of employee training costs and state permitting fees, and 95 percent of taxes related to their expansion.

If a company's work force dropped more than 20 percent, it would no longer qualify for the grants but would not have to repay the money it had received.

Rep. Paul Stam, an Apex Republican and the House minority leader, said the new proposal is worse than the bill Easley vetoed, because it will cost the state more money. CEOs are going to decide today to hire lobbyists instead of engineers, he joked, because they'll realize the state is an easy mark.

"How do we make money this year?" Stam said. "Forget about selling tires. Hire lobbyists."

The modified incentives plan appears to address two concerns raised by Easley when he vetoed the original measure. It ensures that Goodyear's rival, Bridgestone Firestone, also can benefit from state aid. And it has provisions aimed at keeping the companies from aggressively cutting work forces.

Easley was concerned that the original bill would have allowed Goodyear to cut as many as 750 of its 2,750 workers and still get aid. Under the compromise, it would have to maintain at least 2,200 workers.

Easley's press staff did not respond to requests for comment Monday night.

The compromise proposal is more in line with the state's traditional approach to incentives, which rewards companies based on how much they invest instead of awarding flat annual payments.

Efforts to reach a compromise led to an unusual twist for the legislature. Because lawmakers had been called back to town by Easley for a special session only to consider whether to override his veto, Easley called a second special session that began Monday night to consider the compromise measure.