Friday, May 11, 2007

No steel mill, so what to do with $400 million?

From The Times-Picayune:

5/11/2007, 1:26 p.m. CDT
The Associated Press

BATON ROUGE, La. (AP) — With Louisiana's bid for a multibillion dollar steel plant lost, a pool of $400 million set aside for the company now is up for grabs again, in a legislative session where lawmakers are weighing a slew of spending requests and tax break proposals.

The money was part of a state surplus that lawmakers agreed to earmark for German steel manufacturer ThyssenKrupp AG, in hopes of luring the company to build its new steel mill in Louisiana. But the company announced Friday that it will construct the mill in Alabama instead.

Gov. Kathleen Blanco's top financial officer said he will be talking to legislative leaders next week about other ways to spend the cash.

"We will make recommendations, and we will listen to recommendations," said Commissioner of Administration Jerry Luke LeBlanc.

LeBlanc said it was too early for specifics, but he said Blanco will seek to keep some of the money in an economic development fund to try to recruit other companies to Louisiana.

As for the rest of the money, LeBlanc said, "Everybody's running around the Capitol with a list in their back pocket of what they want to do."

Louisiana's coffers are bulging with new money from hurricane recovery spending and rising oil and gas prices. Lawmakers meeting in a regular session until the end of June are considering proposals to spend the money on pay raises, new programs, road repairs and tax breaks.

Analysis from C.B. Forgotston:

“To no great surprise, except perhaps to the media in LA, we didn’t get the big German steel mill. It went to Alabama.

We never were going to get the plant. The Germans simply knew that we were the most desperate Southern state and used us/Blanco to bid up the offer from AL. It worked.”

Note: Buzz is Blanco knew *before* she announced she would not seek re-election that the mill was going to Alabama. According to those who know, that Louisiana lost the mill was the reason for her decision.

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