State near borrowing limit for industrial recruiting
MONTGOMERY (AP) — Industrial recruiters are nearing the $750 million limit the state can borrow to lure new business investment to Alabama just a few months after voters approved an increase in the debt limit.
A commission chaired by Gov. Bob Riley has borrowed $610 million, leaving $140 million in borrowing capacity. But nearly all that money already has been pledged to three development projects, said state Finance Director Jim Main.
Assuming those pledges come due, Main said there would be virtually no borrowing capacity left for any other project, and virtually no extra money left in the Capital Improvement Trust Fund, which the commission taps to repay money it borrows.
"There wouldn't be any borrowing capacity and, in my judgment, the ability to pay the debt service that we are obligated to, and will be obligated to, with those will exhaust the income flow," said Main.
The debt cap was raised after June 5, when state voters approved raising it from $350 million to $750 million.
Riley said the commission's borrowing limit means it could not provide money that would be needed to lure another huge project to Alabama, like the $3.7 billion steel plant that ThyssenKrupp is building north of Mobile. The commission voted to sell bonds to borrow $220 million for the ThyssenKrupp plant, which is expected to employ about 2,700 people.
But Riley said he doubts the commission's borrowing limit will harm Alabama's ability to recruit industries now on its target list, like suppliers to the Kia assembly plant being built just across the border in West Point, Ga.
Riley said Alabama can use other incentives besides money borrowed by the commission, including training for new plant employees, road work and federal grants routed through the state.
"A lot of companies are beginning to ask for different types of incentives," Riley said. "I don't see us having a problem for a while."
especially work force development incentives, funded outside of the Capital Improvement Trust Fund," Riley said. "I don't see us having a problem for a while."
Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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