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Economy

Canfield: Alabama Jobs Act will help grow payroll by $10.7 billion over the next 10 years

Brandon Moseley

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Monday the Joint Legislative Advisory Committee on Economic Incentives met in Montgomery to hear the annual required report on the performance of economic incentives that the state has offered under the Alabama Jobs Act. The joint committee holds a minimum of two meeting a year.

Alabama Commerce Secretary Greg Canfield reported that from July 2, 2015, to Dec. 31, 2018, the state of Alabama Department of Commerce has made agreements with companies promising $1.7 billion in economic incentives for 118 projects.

Those companies will make a capital investment of over $10.5 billion in the state and will produce a projected 10-year payroll of $10.7 billion creating 23,952 jobs with an average annual wage of the jobs created of $47,923. That is substantially higher that the median average income in Alabama.

Canfield said that in 2017 the legislature changed the Alabama Jobs Act replacing the hard cap on total incentives to an annualized cap of $300 million a year.

“In 2018 we had a very robust year,” Canfield said. “The incentives offered will produce a 61 percent return over ten years and 197 percent return over 20 years producing a $10.7 billion ten year payroll and a projected $25.1 billion 20-year payroll

Canfield said that the Alabama median hourly wage is $15.77; but in 2018 the project average hourly wage was $26.98.

Canfield said that there are additional incentives available under the Alabama Jobs Act for employers willing to locate in targeted counties. Targeted counties are counties with populations less than 25,000.

“There has always been a challenge in luring jobs to rural Alabama,” Canfield said. Expanding broadbands and improving transportation infrastructure will be important to landing more projects in targeted counties.

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Canfield said that the Department of Commerce agreed to $999.3 million in incentives in 2018 alone. Those 43 projects will produce $5.6 billion in capital investment in Alabama and will create 11,136 jobs. Key projects include Mazda-Toyota in Limestone County and Shipt in Jefferson County.

In 2018 the highest performing sector was auto manufacturing with nine automotive projects. Five projects were in forestry, and five in aerospace. They also were able to land foundational targets including four corporate operations, three data centers, and two information technology projects.

Canfield also presented information to the Committee on the number of offers that they have made. “I wish we could win everything that we made an offer on.”

“In summary, if you look at our performance under the life of the Jobs Act it has been a net positive return for the state,” Canfield said. “We want to be competitive when we make an incentive offer; but not necessarily the highest offer. North Carolina offered 40 percent more in incentives than we did for Mazda-Toyota, but incentives are only part of landing a project. Incentives don’t make a bad site good they don’t make a bad workforce good.”

“The $1.7 billion in incentives are over the life of the project. That could be over a ten year period. I don’t want to scare anyone,” Canfield said. Since the Alabama Jobs Act went into effect on July 2, 2015 the most successful sectors have been automotive manufacturing with 31, Aerospace at 15, and forestry products at 11.

“We feel that the Alabama Jobs Act has performed well,” Canfield said, “We have never come to the legislature and asked to raise our borrowing limit in the seven and a half years I have been in this role. We have lived within our borrowing capacity and made it work.”

State Senator Greg Reed (R-Jasper) said, “I am excited to hear what you are sharing with us.” “Where do we go next?”

Canfield said that we have had accelerate Alabama 2.0 since 2016. As we look at the world today we have to revisit where the targets are. We have to acknowledge the fact that as the U.S. population is changing. We are going to have to pay more attention to tech and innovation. Tech and innovation culture has a much more entrepreneurial economic system. We are building a strategy around the seven research universities around the state. Some of them are better than others at commercializing their research. If we develop the right ecosystem for tech and innovation we will draw in more of our young people and keep them in Alabama and be able to begin to lure other people to come and work in the state of Alabama.
Senator Arthur Orr asked is there a whistle or bell that we need to add?

Canfield said. “Other states do a better job of targeting incentives to research that can be commercialized. I would like to see more of that tax credit go to companies that do product development.”

Canfield said that the incentives under the Alabama Jobs Act are pay as you go. The companies receive the incentives as they achieve targets in the agreements,
Since the incentives come as companies add payroll and achieve the targets, “Is there really a need for the cap?” Canfield suggested. “We are watching the ($400 million) cap.”

The Committee is co-chaired by Sen. Orr and state Representative Alan Baker (R-Brewton).

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Economy

Business Council of Alabama Small Business Exchange on APT tonight

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The Business Council of Alabama (BCA) will present the Small Business Exchange on Alabama Public Television (APT) tonight, Thursday, April 9. This event is designed to help small businesses applying for federal stimulus funding under the new CARES Act.

In partnership with APT, BCA will bring together experts in business, banking, accounting, and law to answer phone calls from Alabama business owners and employers as they grapple with the impact of the coronavirus on the state’s economy. New federal loans are now available for small businesses, but funding is limited in some cases and quick action is required.

The Small Business Exchange program airs tonight on APT from 7-8 p.m. BCA experts will be available to answer questions from 7 p.m. – 10 p.m. tonight. In addition, experts will be available for consultation from 9.a.m. to noon tomorrow, Friday, April 10.


To ask a question or consult with our BCA experts during these times, the phone number is 1-833-BCA4BIZ (1-833-222-4249).

 

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Economy

Manufacture Alabama launches “Ask the Experts” webinar

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Ask the Experts: Employment Law Questions Related to the COVID-19 Pandemic is a new webinar being offered by Manufacture Alabama.

As the COVID-19 pandemic continues to develop, disrupting the lives of everyone around our state, country, and the globe, employers are left with many questions and Manufacture Alabama wants to answer them.

Manufacture Alabama is the only trade association in the state dedicated exclusively to the competitive, legislative, regulatory, and operational interests and needs of manufacturers and their partner industries and businesses.

Manufacture Alabama has enlisted some of the top labor and employment attorneys in Alabama to bring you the first installment of a web series, ‘Ask the Experts.’ In the first installment, their experts will be answering your questions about implementing the new CARES Act Leave guidelines, and best practices for what to do if you have an employee test positive for COVID-19.

The attorneys will also be covering questions whether they are questions related to OSHA standards, the Families First Coronavirus Response Act or the impact of the CARES Act, or anything else labor or employment-related.

Manufacture Alabama also wants to hear stories of the changes manufacturers have experienced in the workplace as a result of the pandemic, and how businesses have changed day to day operations.

Send your questions and responses regarding these topics to [email protected] and stay tuned.

The webinar will be published Tuesday, April 14.

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Ainsworth unveils website for small businesses seeking information during pandemic

Brandon Moseley

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Alabama Lt. Gov. Will Ainsworth unveiled a new web page Monday designed to provide small business owners with a one-stop information hub during the COVID-19 pandemic crisis and forced economic shutdown.

The website is www.atlasalabama.gov.

“The COVID-19 pandemic is already providing small business owners with unprecedented challenges and frustrations, so they should not have to struggle to find the information necessary to survive in the current economic climate,” Ainsworth said. “As new small business programs are announced and revised health orders go into effect, the website will be updated in order to provide the most timely and accurate information possible.”

The website was created by the Alabama Small Business Commission, which Ainsworth chairs. The site provides information related to Small Business Administration loans and assistance, unemployment claims, tax relief programs, and other timely initiatives.

The website is intended to help small businesses remain in compliance with COVID-19 guidelines and protocols. The website also provides links to every state, county, and municipal health order currently being enforced in Alabama.

The Legislature placed the Alabama Small Business Commission under the authority of the Lieutenant Governor’s Office in 2019.

The 22-member commission is tasked with formulating “policies encouraging innovation of small businesses in the state” and advising the Department of Commerce in promoting small businesses within Alabama.

On March 12, the rapidly spreading coronavirus strain, SARS-CoV-2, led President Donald J. Trump (R) to order a forced economic shutdown on March 12. Those original orders have subsequently been strengthened by Gov. Kay Ivey (R), culminating in a statewide shelter in place order on Friday.

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Realizing that with most of their businesses shut down through at least April 30, Congress passed and the President signed the CARES Act, which provides low interest loans to hundreds of thousands of struggling small businesses. If the businesses use the money to make payroll and to pay other business overhead costs the loans will be forgiven.

Currently, there are 2,113 Alabamians with confirmed cases of COVID-19. 64 Alabamians have died and 271 are currently in the hospital. 20 Alabamians have recovered from their illness and been cleared by their doctors. The global pandemic has infected more than 1,441,589 people globally and killed 82,933, including 7,380 people just on Tuesday (1,970 of them were Americans). Gov. Ivey’s shelter in place order is in effect through April 30, but that is likely to be extended.

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Businesses applying for aid can receive proof of existence from secretary of state’s office

Brandon Moseley

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Alabama Secretary of State John Merrill said Monday that federal resources have been made available to support businesses during the coronavirus pandemic to assist with tax relief, employee protection and benefits, loans and grants, and many other challenges that business owners may encounter during the ongoing coronavirus crisis.

Merrill’s office explained that in order to be eligible for this federal aid, some corporations and businesses may be required to prove their existence as part of their application. Certificates of Existence can be obtained through visiting the Alabama Secretary of State’s website.

Business owners can apply online to receive their Certificate of Existence electronically for immediate processing. The non-subscriber fee is $28 and will allow a user to download their copy for up to 15 days.

If you are completing the request for a Certificate of Existence by paper, you may access the application here.

The form must be typed and will not be accepted via email.

Once completed, mail the application, along with the $25 filing fee, to:

Secretary of State’s Business Services Division
P.O. Box 5616,
Montgomery, Alabama 36103

Those who apply online will not receive a mailed copy. Rather, a copy can be downloaded online and then printed out.

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Certificates of Existence are only available for businesses who have previously filed for formation with the Secretary of State’s Office. If you have not yet filed, you are still able to do so through the Secretary of State’s website

This documentation may also be required to process loan applications by lending institutions, banks, credit unions, farm credit, or public accountants.

For questions or more information, contact the Secretary of State’s Business Services Division at (334) 242-7221 or (334) 242-5324.

Thousands of Alabama businesses have been forced to close by orders from the state as well as local health departments. Many businessmen and women are having to make the difficult decision on whether or not to continue to make payroll. The aid under the CARES Act is a lifeline to businesses that the federal government is offering during this unprecedented period of economic crisis.

The forced economic shutdown was deemed necessary by state and federal government authorities in consultation with public health experts in order to slow the spread of the coronavirus strain, SARS-CoV-2, that causes COVID-19. The COVID-19 global pandemic has already killed 12,857 Americans and 82,993 people globally. 1,050,077 people around the globe are still struggling through active cases of the illness, including 395,981 Americans.

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