By By Kerry Whipple Bean
Alabama has landed some big economic development fish in recent years – but if an amendment on Tuesday's ballot fails, the bait could run out.
Amendment One seeks to increase the amount of money the state can borrow under the Capital Improvement Trust Fund. The current limit is $350 million; the amendment would raise that limit to $750 million.
"If we don't have that, we're not going to see any more large (economic development) projects," said Wiley Blankenship, president of the Coastal Gateway Economic Development Authority. CGEDA is a partnership of Escambia, Monroe and Conecuh counties.
The amendment does not raise anyone's taxes to pay for the increase in the bond limit, Blankenship said. That's been one misconception in the state about Amendment One, he said.
About $190 million of the additional $400 million would go to incentives that lured ThyssenKrupp, a German steelmaker which plans to build a $3.7 billion facility in south Alabama. The other money would be for projects across the state, Blankenship said.
Alabama needs the extra money for incentives because it has been so successful landing projects like ThyssenKrupp, which is the largest private economic development project in the country.
"You've heard the term 'tapped out,'" Blankenship said. "Without this (money), the state will be tapped out. This keeps us in the ballgame."
Gov. Bob Riley said the amendment is needed to keep Alabama competitive for more projects.
"We have a strong economy in Alabama today, but we can make it even stronger with the approval of this amendment on June 5," Riley said in a statement. "As we've seen just recently, the competition for new jobs is intense. To compete and win, we must be able to offer economic incentives. These incentives are an important tool to recruit new industries to our state and to help our existing industries expand."
The debt service on the bonds will be funded by offshore oil and gas drilling and production in the Gulf of Mexico, Riley said.
State Speaker of the House Seth Hammett said the state's "economic future rests in the hands of the voters."
"Alabama has a unique and valuable asset in its coastal oil and gas reserves," Hammett, D-Andalusia, said in a statement. "Royalties from those reserves are deposited into the Capital Improvement Trust Fund specifically to bring new jobs and industry to Alabama – in essence using one asset to create a new asset."
A second amendment on the ballot would create a trust fund to help cover health-care costs for retired state employees and education employees. Under new federal regulations, the state's bond rating could be lowered unless Alabama sets aside money specifically for those benefits. A lower bond rating would likely force the state to pay higher interest rates when borrowing money.