Local News

Incentives Compromise in Works at Legislature

Posted September 10, 2007 9:37 p.m. EDT
Updated September 11, 2007 12:44 p.m. EDT

— 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.