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Gov. Robert Bentley speaks Wednesday, July 23, 2014, at a Delta Regional Authority workforce development conference in Chatom, Ala. Bentley said he plans to call for a special session of the Legislature after the November 2014 election. (Brendan Kirby/bkirby@al.com)

CHATOM, Alabama – Gov. Robert Bentley said Wednesday that he plans to call a special session of the Legislature after the November election to shift from the state's General Fund to education funding to pay for economic incentives to lure new businesses.

Speaking at a workforce development summit in Washington County, Bentley noted that the state is running short on money to lure manufacturers and other larger employers. That money traditionally has come from the General Fund, which pays for Medicaid, prisons and other non-education functions of government.

But Bentley said the additional tax benefits that new businesses bring to Alabama mostly flow to the Education Trust Fund.

"Who pays for the incentives? It's not education, but they benefit from it totally. ... You ought to eat what you kill," he said.

Senior lawmakers have been lukewarm toward a special session, and Senate President Pro Tem Del Marsh, R-Anniston, said Wednesday that he opposes it.

"I think we've got so many challenges with the budget that I'm going to be very resistant to offer any kind of economic incentive packages," he said. "I'm not on board."

The Democratic leader in the state House of Representatives, Craig Ford of Gadsden, said the governor should be focusing efforts on growing small businesses that are the backbone of the economy instead of chasing multinational corporations with expensive tax abatements. And, he added, a state lottery or an increase in the cigarette tax should fund the programs – not education funds.

"This is just par for the course with the governor," he said.

At an appearance in Oxford later Wednesday, Bentley said that his comments on the special session were a "trial balloon" and had been misconstrued. His spokeswoman also sent this statement from the governor:

"Any economic incentive package I propose will guarantee millions of dollars more for education. I will work closely with the legislature to make sure we have the most competitive economic incentive package in the country. I have fought hard for education during my entire career in public service. My goal is to grow the ETF so that we can provide a quality education for our children and to make sure our teachers and support personnel have competitive salaries and benefits."

The Alabama Department of Commerce announced earlier this year that it was studying ways to revamp the state's economic incentives structure.

Other lawmakers expressed more support Wednesday.

Sen. Arthur Orr of Decatur, who chairs the Senate's General Fund budget committee, said the state needs to revamp its economic incentive program because it depends too much on borrowing money by selling bonds.

"The idea of issuing debt to fund economic development certainly in my opinion is not the best way to support economic development," Orr said. "There are better ways to achieve that goal."

Orr said he had discussions earlier this year with Alabama Secretary of Commerce Greg Canfield about alternatives. He said he has not seen any proposals for what might be introduced in a special session, but said there's still plenty of time for the governor to share those with legislative leadership to build support before a special session.

Orr said Alabama needs to make changes to be more competitive.

"Right now it would appear the case can be made that Alabama is at a marginal competitive disadvantage because of our current structure for economic development incentives," he said. "It would appear that other states have more arrows in their quiver than we do when it comes to incentives."

House Speaker Mike Hubbard of Auburn issued a statement saying that private sector job creation and a pro-business environment are priorities for the Republican majority in the House.

"That being said, I have seen no proposal details from the governor or anyone in his office and I think it would be unwise to call a special session without involving the legislative leadership," Hubbard said.

Rep. Steve Clouse of Ozark, who chairs the General Fund committee in the House, said, "My only thoughts are we need to make sure we stay competitive, particularly with the bordering states, on economic development incentives. But then the question always is where is the money coming from?"

Sen. Trip Pittman, chairman of the Senate's education budget committee, said legislators should evaluate the results the state has gotten from incentive spending as part of considering any possible changes.

"When you start talking about changing you need to look at what you've been doing and how well that has worked," Pittman said.

The chairman of the House education budget committee, Rep. Bill Poole of Tuscaloosa, said he could not comment because he had not discussed or seen any proposals.

Bentley told people at the Delta Regional Authority conference that the state should have about $150 million a year to go after large economic development projects. He said the money should come from a budget stabilization fund and not the Education Trust Fund, itself. Having the money is crucial to compete with other states, he said.

"We have to be in the ballgame," he said.

Questioned by reporters after his address, Bentley declined to discuss details of his proposal. He said his administration is still working on the specifics.

"We don't have any final proposal on that," he said, later adding, "We will not do anything to hurt the Education Trust Fund."

AL.com reporter Mike Cason contributed to this report.

Updated at 1:59 p.m. to add comments from two additional lawmakers. Updated at 3:14 p.m. to add comments from two more legislator. Updated at 5:24 p.m. to include comment from Rep. Craig Ford. Updated at 12:43 a.m. to include additional comments from the governor.

