Special Session was a Success
March 10, 2007
Special Session was a Success
One of the most important jobs of our Legislature is economic development. Last week during a special session, the Legislature unanimously passed a historic economic development plan that will help attract quality high paying jobs for the people of this state. Both Democrats and Republicans legislators worked with Governor Riley to approve an incentive package that will help create new business and more jobs.
Over the past decade, our Alabama has become one the national leaders when it comes to attracting major manufacturers. Starting with Jim Folsom and Mercedes in the early 1990s, companies from all across the globe have investing billions right here in Alabama. By doing so, they’re adding high paying and stable jobs to our economy.
Right now our state is hotter than ever. In fact, Alabama is currently competing for the location of 10 plants across the state, including a 2700-employee plant by the German manufacturer, ThyssenKrupp, one of the world’s largest steel producers.
Enticing these companies isn’t cheap. Luring new industry to locate here requires money in the form of incentives and tax abatements—money that our constitution doesn’t allow us to spend. Unlike the federal government, our state constitution requires us to have balanced budgets; we aren’t allowed to spend money that we don’t have.
In response, the Legislature passed a bill that will increase the ability of the state to borrow money to lure these companies to locate here. The money will be borrowed in the form of bonds, and will be repaid by money generated by our oil and natural gas sites in the Gulf.
During the session we also addressed another critical issue facing our state. As more teachers and state employees retire, state health care costs will grow. We promise teachers and others that if they dedicate their careers in public service, they will have health care in retirement. Currently the obligation of the state to fulfill its health care promise to retirees is an unfunded liability – which is currently estimated in the billions. Plus, new federal accounting procedures require that future promises and their price tag be recognized by the state.
So to solve this dilemma, we also passed a bill to pre-fund future health care costs. Money placed into the trusts would be saved and then used as retiree health care costs rise each year.
While economic development and retiree health care seem very different, they are actually intertwined. As the state starts to save funds to pay for its future health care liability, it assures bankers and the bond markets that Alabama is treating its debt and future obligations in a responsible manner. A strong credit rating for the state makes it less expensive to borrow for economic development and capital improvements, like the bonds needed for the recruitment of ThyssenKrupp and others.
Both of these bills are critical for the future of our state, but they couldn’t have passed so quickly and efficiently without bi-partisan support. The special session is another example of what can be accomplished when a critical issue has support from both sides of the aisle.
I was very proud to be a part of this effort. Our success proves what we can accomplish when we work together for the common good. A similar spirit should be used if we are to address our state’s other critical needs.