Bill Targets Goodyear for State Grants
Posted July 25, 2007
Updated July 26, 2007
Raleigh, N.C. — As legal battles rage over using state money to lure new business to North Carolina, a legislative committee on Wednesday approved language in a bill to provide Goodyear with up to $40 million over the next decade to upgrade its tire plant in Fayetteville.
House Bill 1761 includes amendments to the state's Job Development Investment Grant program, which provides companies with grants based on how much income tax was withheld from employees' pay if the companies meet specified job-creation goals.
The amendments would expand the scope of companies eligible for JDIG money to include "multinational heavy industry manufacturing" facilities that maintain their existing work force and agree to invest at least $200 million to upgrade their plants over the next five years.
Language approved Wednesday by the House Appropriations Committee calls for creating a $40 million fund to offer grants to up to five such companies, provided each company is located in an economically distressed county, has at least 2,400 full-time employees at the time of the grant and doesn't go below that head count.
Although Goodyear isn't named in the bill, Rep. Rick Glazier, D-Cumberland, said the bill is targeted at the company, which has a tire plant in Fayetteville that is Cumberland County's largest private employer. The plant employs about 2,500 workers with average pay and benefits of about $90,000.
"We couldn't pay that kind of incentive to bring that kind of job to North Carolina, and we've got them," Glazier said. "In the short term, we've got to engage in strategies to assist plants (to) modernize and stay and assist technological companies in their coming to the state."
A similar state-funded deal for Google was challenged in a lawsuit filed Wednesday in Wake County.
The North Carolina Institute for Constitutional Law alleges a $4.7 million state grant and tax exemptions worth an estimated $90 million that were given to Google to convince the search engine giant to build a $600 million data center in Lenoir violate the state constitution.
Google said in a statement Wednesday afternoon, contending that the lawsuit has no merit.
The Institute for Constitutional Law previously challenged incentives paid to Dell Inc. for a computer manufacturing and distribution hub in Forsyth County.
"It involves special treatment," said Aldean Webster, executive director of the Institute for Constitutional Law. "It's not surprising that we would have other businesses -- now those that are already present -- trying to get on the gravy train."
Glazier acknowledged that he doesn't like business incentives, but said that they are part of the economic development industry -- unless a judge rules them invalid.
"(This is) probably some of the best money we will ever invest truly in jobs," he said.