It’s no secret that a big part of attracting major corporations like Toyota and Mazda to any region requires multimillion dollar incentives.
To attract manufacturers, experts say Southern states have used a combination of lucrative incentive packages, low-cost labor and a pro-business labor environment since the United Auto Workers union is stronger in Northern states.
After five months of negotiations the deal was reached in principle between the state and both automakers.
To lure the plant, the state offered workforce training and an incentive package of $370 million in tax abatements and investment rebates, Alabama Commerce Secretary Greg Canfield said. That figure does not include a local incentive package still being finalized.
Just this week lawmakers proposed additional local tax incentives. The bill would allow local tax abatements for projects with capital investments over $100 million.
To that end, Limestone County Commission is set to vote on a 13.5 MIL tax abatement incentive Tuesday, which means millions in property tax breaks for the carmakers.
The City of Huntsville has also proposed the creation of its seventh Tax Increment Financing (TIF) district to help fund the Toyota-Mazda project. The surplus in tax money received will pay for roads and infrastructure associated with the plant. The city will also provide a tax abatement incentive.
“If these deals start not working, people will pay the penalty. If these deals continue to work and bring in jobs and we see growth, they will continue to happen,” Jackson said.
City leaders will hold a public hearing about the TIF and outline the specifics of the deal Thursday night at council meeting. Limestone County Commission will vote on its tax abatement proposal Tuesday.
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- Watch the Toyota-Mazda announcement here