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Incentives Compromise in Works at Legislature

Posted September 10, 2007
Updated September 11, 2007

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— State lawmakers are back in Raleigh to consider a compromise version of an incentives package that would benefit Goodyear Tire and Rubber Co.'s Fayetteville facility. The new proposal increases the package to $60 million, and other companies could cash in.

The tentative compromise, reached Monday night, would give lawmakers a chance to vote on an amended version of a bill that Gov. Mike Easley vetoed late last month. Withjout mentioning Goodyear by name, that bill targeted to the tiremaker by setting qualifications that only Goodyear would meet.

The new plan would make it easier for Goodyear rival Bridgestone Firestone to receive cash grants for its own plant improvements in Wilson while also possibly increasing the total cost of the grant program from $40 million over 10 years to $60 million, according to the office of House Speaker Joe Hackney.

"More money for schools, more money for small businesses all around, the company retools and stays there," he said.

Critics said the free market can do that for free.

It would be better not to set up a plan "so all businesses big and small can thrive, not let government pick and choose the winners," said Dallas Woodhouse, of Americans for Prosperity.

Woodhouse also said the public's tax dollars should not go to large, private companies.

"It looks like we are going from a bad bill to an even worse bill," he said.

State House members had returned to Raleigh earlier Monday to allow the General Assembly to attempt to override the veto, which would have required support from three-fifths of the House and Senate members present. That session recessed for several hours of closed-door negotiations, however, before House members and aides to Easley agreed to an alternative proposal that stopped a historic confrontation in North Carolina. Easley then called his own special session so the new bill could come up.

The Legislature agreed to reconvene Tuesday morning to debate and vote on the alternative.

Other manufacturing plants with at least 1,500 workers in economically distressed areas could apply for the grants if they agreed to invest $200 million over six years, but it's unclear whether any others could qualify.

Goodyear could still get more than $24 million in incentives over the next 10 years as part of the compromise, Hackney said. But companies would have to maintain average wages that are 40 percent higher than the local average to qualify, and they would lose some of the grants if their overall work forces decline by up to 20 percent.

Senate Majority Leader Tony Rand, D-Cumberland, who holds great influence over his chamber, said later he backed the compromise in principle but wanted to see more details.

A Goodyear spokesman at company headquarters in Akron, Ohio, declined comment late Monday, but Rand said Goodyear and Bridgestone Firestone officials involved in the negotiations at the Legislative Building likely will find the final product satisfactory.

Lawmakers have never overridden a governor's veto in North Carolina, which 10 years ago became the last state in the country to give its governor that authority. Easley, who has issued eight vetoes during his tenure, is the only governor to have used the power.

The governor had said the Goodyear bill would set a dangerous precedent, in part by allowing Goodyear to reduce its work force and still qualify for cash grants. The bill, which was crafted to apply only to Akron-based Goodyear, was passed by large margins in the final days of the regular legislative session that ended in early August.

Aides to both Easley and legislators worked through the weekend to try an avoid a showdown between the governor and his fellow Democrats.

Supporters argue the Fayetteville area, already hurting by overseas deployments by Fort Bragg soldiers, would be devastated financially if the Goodyear plant closed, since it employs about 2,750 workers in high-paying jobs. Goodyear has said the incentives are a key component in the company's plans to retool the plant and produce high-grade tires. The company has been offered similar financial assistance for similar renovations in Alabama.

"We're not completely satisfied, but it's better than nothing at all," Kenneth Edge, chairman of the Cumberland County commissioners, said of the compromise. "I hope that we can make it work."

Wilson-area legislators have complained Bridgestone Firestone, which has about 1,850 employees, deserved similar economic benefits to improve its manufacturing operations.

Along with an unusual alliance of conservative and liberal lawmakers and interest groups, Easley had urged legislators to sustain the veto.

House Minority Leader Paul Stam, a longtime critic of incentives, said he's worried that a compromise expanding the scope of cash giveaways would be worse than the Goodyear bill and send the signal to other companies that they can get cash giveaways if they ask the Legislature.

"Every CEO in North Carolina is going to wake up and decide to hire a lobbyist," Stam said.


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  • JERRYUSA Sep 11, 2007


  • blueridgerunner Sep 11, 2007

    The State says we don't have money for schools so we get a lottery that still doesn't pay for schools, we have one of the highest taxes on gasoline in the the country to pay for roads that the State says we don't have enough funds to repair or money to replace ailing bridges, on top of that we pay a stiff State income tax and a State sales tax but the State says it needs more money needs more money to operate. And the list of taxes goes on—Yet the State can line the pockets of Big Business with millions our tax dollars. The essence of that is— we're paying for the privilege to work. Mining companies use to pay miners wages that had to be spent at the company store which over charged on the goods needed. In this case big business pays wages and the state over charges for goods and services and returns the money to Big Business.

    We have no representatives to look after the interests of the poor and working class in the Legislature. Maybe it's time for another "tea party" A true rev

  • simbo Sep 11, 2007

    I'm tired of the government spending my money without asking me.That's why I never vote democrat!

  • shine Sep 11, 2007

    pc35...... I would be preaching to the preacher, but I hold this same sermon at least 6 times a year to no avail. Also I have preached it for the last 25 years. No point in passing the offering plate for this one.

    Don't let the religous bother you .... just an analogy.

  • pc35man Sep 11, 2007

    Here we go again. What about the small businesses in NC? Why don't we get a tax break or someone give us some tax money? Why not take a serious look at the Business Privilege Tax and how its impacting upon small business. You talk about being unfair. One of these days the State government is going to get off the payroll of big business and support the citizens of NC.

  • shine Sep 11, 2007

    Hy - Grade...... that is the problem you have been with the company 27 years. I have been at mine for 25 and unfortunatly understand NC and its commerce department.

    Readers Digest version: The company that you are with is like a BIG hardwood forest in NC. It provides shade, beauty, activity, FE: ( jobs, rotating economy, overall decent living ). So we don't do anything for the EXISTING forest instead we spend millions to plant a new tree ( outside industry) that we don't know if it will survive (commerce dept.) after we planted it.

    The thing our state misses is that existing business just like the hardwoood forest always produces additional growth (new business). So they cut the old forest to plant new. Dumb.

    It is like a bank you have had for 25 years. The high return CD's are for new customers along with free checking... someone they have no experience with - instead of offering that to their LONG and LOYAL customers.

    Same thing - but unfortunate.....

  • PaperReader Sep 11, 2007

    Just for the record, I think the Forsyth incentive package was wrong, too. Its always wrong to pick a certain business and shower taxpayer money on it while letting others sink or swim on their own.

    Its just that this Fayetteville deal stinks so bad that I can smell it all the way up here in Johnston.

    If we are going to give money away to businessess that are in danger of failing, why not go back and try some giveaways to bring the textile and furniture industries back to NC??

    If Goodyear goes away, then at some point, an efficient, competitive business will take its place in NC.

    Again, this bill would never have seen the light of day if there wasn't a great likelihood of some palm greasing on Jones Street.

    And....I'm no Easley fan either, but as they say, even a blind hog finds an acorn once in a while..

  • Hy-Grade Sep 11, 2007

    Where is the incentive package to keep my company in Wake county from going to Mexico. I've been with the company for 27 years I'd like to keep my job also.

  • FloydRTurbo Sep 11, 2007

    The Goodyear plant (in Tony's backyard) is in trouble because of poor management decisions over the past few years. NOT because of hurricanes or tornados or Acts of God, etc etc.

    If you "loaned" your ne'er do well brother-in-law $10,000 to start a business and a year later he is flat broke and asking for another "loan" for yet another scheme .... whose fault is it if you are foolish enough to "do it again".

    As long as there is an endless $$$$ source, what consequences are there to failure? Tony is great at giving away OPM .... ("Other Peoples Money") in exchange for personal favors he receives for making it happen.

  • shine Sep 11, 2007

    Lobbyist? they don't need a small lobbyist - These guys start the lobby work at the TOP. Why would anyone think we are spending the tax payers money arguing over it?

    There is a "fly" in the pudding.