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Economy

Sewell, Rogers vote for bipartisan bills to improve Paycheck Protection Program

Brandon Moseley

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U.S. Reps. Terri Sewell, D-Selma, and Mike Rogers, R-Saks, voted in favor of a bipartisan bill aimed at improving the Paycheck Protection Program, dubbed the Payroll Protection Program Flexibility Act.

“The Paycheck Protection Program has been a lifeline for tens of thousands of Alabama businesses, but there are still too many small businesses that have been unable to access necessary resources because of the program’s strict stipulations,” Sewell said.

Sewell said many small businesses have not applied despite their urgent need because they do not believe they can meet current standards, and many are afraid to use the money because of the program’s strict requirements.

“The bills the House passed today would both make the PPP program more flexible so it can reach more small businesses in need, and also increase the program’s transparency to ensure funding is going to main street businesses that need support the most,” Sewell said.

Rogers said he was pleased the act passed the House.

“The bill will add more flexibility to these loans to help small businesses even more,” he said. “It will extend the loan forgiveness period, allow businesses that receive forgiveness to also receive payroll tax deferment and will allow businesses to spend different amounts on payroll costs and mortgage, rent, and other expenses. I hope these modifications will further help our small businesses that are the heartbeat of our local economies.”

According to the U.S. Small Business Administration, more than 60,000 Paycheck Protection Program loans have been issued to small businesses in Alabama with each recipient receiving an average PPP loan of about $100,000.

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According to Sewell’s office, the new bill would provide needed flexibility to the Paycheck Protection Program — originally created by Congress in the CARES Act in April — in order to make this key program functional for the small businesses that need it the most.

Sewell’s office provided a lengthy explanation of what the legislation does:

Under the current Paycheck Protection Program, the PPP loan converts to a grant as long as the small business uses the loan within eight weeks of the CARES Act enactment – that is, by June 30 – and uses at least 75 percent of the loan proceeds on payroll and the rest for such necessary expenses as rent, mortgage interest, and utilities. Many small businesses, particularly very small businesses, have reported that, with these restrictions, the loans do not meet their needs.

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The bill makes the PPP program more flexible in the following key ways, in order to make it more accessible and usable for the vulnerable small businesses that need it the most:

Allowing loan forgiveness for expenses beyond the 8-week covered period to 24 weeks and extending the rehiring deadline. Back in March, the PPP program was established as an eight-week program, ending on June 30. However, it is clear that the economic effects of the pandemic will impact small businesses long past June 30. The current eight-week timeline does not work for local businesses that could only very recently have customers and those that are only allowed to open with very heavy restrictions. Small businesses need the flexibility to spread the loan proceeds over the full course of the crisis, until demand returns.

Increasing the current limitation on the use of loan proceeds for nonpayroll expenses from 25 percent to 40 percent. Currently, under regulations issued by the Trump Administration, the PPP loans require that no more than 25 percent of loan proceeds can be spent on non-payroll expenses such as rent, mortgage interest, and utilities. This limitation has prevented many small businesses, such as independent restaurants, from applying to the program because their rent is significantly more than 25 percent of their monthly expenses. The 40 percent limitation in this bill is much more realistic.

Extending the program from June 30 to December 31. By ensuring the PPP program will operate for 24 weeks, rather than only eight, this bill will ensure that many more truly small businesses will be able to take advantage of the program.

Extending loan terms from two years to five years. According to the American Hotel and Lodging Association, full recovery for that industry following both the September 11, 2001 terrorist attacks and the 2008 recession took more than two full years. This was also true for many other industries. If the past is any indication of the future, it will take many businesses more than two years to achieve sufficient revenues to pay back the loan.

Ensuring full access to payroll tax deferment for businesses that take PPP loans. The purpose of PPP and the payroll tax deferment was to provide businesses with liquidity to weather the crisis. Receiving both should not be considered double-dipping. Businesses need access to both sources of cash flow to survive.

The Payroll Protection Program Flexibility Act passed on a 417 to 1 vote. Alabama Congressmembers Bradley Byrne, Mo Brooks, Robert Aderholt, Martha Roby, and Gary Palmer also voted for the legislation. It now heads to the Senate for their consideration.

Rogers represents Alabama’s 3rd Congressional District. Sewell represents Alabama’s 7th Congressional District.

 

Brandon Moseley is a senior reporter with eight and a half years at Alabama Political Reporter. You can email him at [email protected] or follow him on Facebook. Brandon is a native of Moody, Alabama, a graduate of Auburn University, and a seventh generation Alabamian.

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Economy

Alabama unemployment rate drops more than 2 points to 5.6 percent

Micah Danney

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(STOCK PHOTO)

The state’s seasonally adjusted unemployment rate decreased to 5.6 percent in August, down from 7.9 percent in July, according to the Alabama Department of Labor. 

The figure represents 127,186 unemployed people, compared to 176,556 in July. It compares to an August 2019 rate of 2.8 percent, or 62,149 unemployed people.

“August showed a larger drop in the unemployment rate than we’ve seen for a few months,” said Alabama Labor Secretary Fitzgerald Washington. “We are continuing to see our initial claims drop, staying under 10,000 for the past several weeks. We regained another 22,200 jobs this month but are still down more than 86,000 from this time last year.”

Washington said that the number of people who are working or actively looking for work is at its highest level ever, which he described as a sign that people are confident that there are jobs to be found. 

Gov. Kay Ivey said the numbers are good news for Alabama. 

“We have worked extremely hard to open Alabama’s businesses safely, and to put our hard-working families back to work,” Ivey said in a statement. “We know that challenges remain, and we will endeavor to meet them so that we can get back to our previous, pre-pandemic record-setting employment numbers.”

All the state’s counties and metro areas experienced a decrease in unemployment rates from July to August. The most gains were seen in the government sector, the professional and business services sector and the trade, transportation and utilities sector.

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Counties with the lowest unemployment rates were:

  • Clay County – 3.4 percent
  • Randolph, Franklin, Marshall, Cullman, Cleburne and Cherokee Counties – 3.6 percent
  • Blount County – 3.7 percent

Counties with the highest unemployment rates were:

  • Wilcox County – 14.8 percent
  • Lowndes County – 13.8 percent
  • Greene County – 10.9 percent

Major cities with the lowest unemployment rates are:

  • Vestavia Hills – 3 percent
  • Homewood  – 3.2 percent
  • Madison – 3.3 percent

Major cities with the highest unemployment rates are:

  • Prichard – 15.4 percent
  • Selma – 12.9 percent
  • Bessemer – 10.7 percent

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Economy

New unemployment claims drop slightly

Micah Danney

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There were 8,848 new unemployment claims filed in Alabama last week, slightly fewer than the 8,902 filed the previous week, according to the Alabama Department of Labor.

Of the claims filed between Sept. 6 and Sept. 12, 4,485, or 51 percent, were related to COVID-19. That’s the same percentage as the previous week.

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Economy

Inaugural Alabama Works innovator awards presented

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The inaugural AlabamaWorks! Innovator Awards were presented by Gov. Kay Ivey and Deputy Director of Commerce and AIDT Director Ed Castile Thursday during the AlabamaWorks! Virtual Conference.

The awards were developed to highlight people and programs across the state that take an innovative approach to solving workforce challenges and help advance Ivey’s Success Plus attainment goal of adding 500,000 highly skilled workers by 2025.

At the time of the inception of the awards, Alabama was unaware of the impact COVID-19 would have on the workforce and although the attainment goal has not changed, our economic and workforce recovery post-COVID-19 will hinge on innovators like those recognized.

“The workforce challenges that we face today are not the same ones that we faced six months ago due to the COVID-19 pandemic that has completely reshaped the workforce landscape,” said Gov. Kay Ivey. “The State of Alabama is relying on those who are leading the charge by implementing innovative solutions in their cities, counties and regions to further economic and workforce development.”

The recipients are visionaries, outside-of-the-box thinkers and problem solvers. The programs test boundaries, explore new opportunities and reach deeper to bring about change. “It is important to recognize these leaders of innovation and to thank them for their hard work and dedication to the citizens, communities and industries of Alabama,” said Ed Castile, deputy director of commerce and AIDT director. “Their innovative approach to workforce development will be key to opening doors, breaking barriers and propelling Alabamians forward.”

The recipients of the first-ever AlabamaWorks Innovator Awards are as follows:

Region 1 – North AlabamaWorks – Beth Brumley, Colbert County Schools

Beth Brumley built the Health Science Program for Colbert County Schools from the ground up by using her experience in the healthcare field to provide critical, real-world skills to her students. She developed key relationships within the healthcare community to provide her students enhanced learning opportunities and exposure, which resulted in increased demand for program graduates. Beth was also named the 2020 National New Teacher of the Year through the Association for Career and Technical Education. By bridging the gap between education and employer, Beth has created a formula for success that positively impacts the workforce.

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Region 2 – East AlabamaWorks – The Sylacauga Alliance for Family Enhancement (SAFE)

SAFE has been a model for supportive services to empower individuals and families while fostering positive and healthy development of the community for nearly 25 years. In their program, SAFE combines occupational and employability skills to help job seekers be ready to enter the workforce regardless of barriers they may have faced in the past. Their dedication to providing practical solutions to modern problems is a testament to their heart for service and passion for helping their community and region.

Region 3 – West AlabamaWorks – Dr. Mike Daria, Superintendent Tuscaloosa City Schools

Dr. Daria has played a crucial role in the success of West Alabama’s workforce development by fostering important relationships between industry and education. His leadership has focused on increased Career Technical Education (CTE) enrollment, supporting local Worlds of Work events and the Educator Workforce Academy. Dr. Daria’s emphasis on the importance of identifying career pathways for the students in his district and then providing viable opportunities for students to take those paths, make him invaluable to West Alabama.

Region 4 – Central Six AlabamaWorks – Ed Farm

Ed Farm is the signature program of TechAlabama that focuses on encouraging children and adults to discover and pursue STEM careers. Ed Farm has a vision for a world full of invention, led by citizens who have been equipped with the necessary tools to fill or create the careers of the future. Through equipping educators and communities with innovative tools, strategies and programs they are able to support active learning for all students. With three signature tracks, Ed Farm is poised to help increase educational equity and improve learning outcomes through technology all while preparing the future tech workforce.

Region 5 – Central AlabamaWorks – Tiger Mochas, Auburn City Schools

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Tiger Mochas is a collaborative effort between special education students, FCCLA (Family, Career, and Community Leaders of America) members and peer volunteers at Auburn High School. This student-led organization is serving up a lot more than hot cups of coffee to their peers because through their work, students are provided meaningful, hands-on work experience that teaches important functional, social and daily living skills. Graduates of the program leave with not only work and employability skills, but in-demand soft skills that will help them succeed in life and work.

Region 6 – Southeast AlabamaWorks – WeeCat Industries

WeeCat Industries uses a simulated workplace model to meet the growing demand for a skilled workforce. WeeCat saw an opportunity to begin teaching work ethics and employability skills as early as preschool, and rose to the challenge. Their students clock into work, run an assembly line, fill orders, check invoices, meet production quota, interview for new positions and implement quality control all while earning a “paycheck” to be spent at the WeeCat Store before they can even spell the word “school”. WeeCat Industries places invaluable skills at a crucial age in development which will shape the future of the workforce.

Region 7 – SAWDC AlabamaWorks – Ed Bushaw

Ed Bushaw with the South Baldwin Chamber of Commerce researched and developed initiatives to address the region’s workforce supply to meet the needs of the growing hospitality and tourism industry in his region. His collaborative efforts with business and industry officials resulted in the development of the first Hospitality and Tourism registered apprenticeship program in Alabama. Apprentices receive classroom instruction as well as valuable real-world experience within the hospitality and tourism industry and finish the program with a credential that can be used to advance their career. Ed’s ability to adapt to the needs of industry and implement programs that address those needs are vital to the continued success of southwest Alabama.

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Economy

Report: Transitioning to electric vehicles could save Alabama millions in health costs

Alabama would experience approximately 500 less asthma attacks per year, about 38 fewer premature deaths and prevent more than 2,200 lost workdays annually.

Micah Danney

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Alabama could save $431 million in public health costs per year by 2050, if the state shifted to an electric transportation sector between now and then, according to a new study by the American Lung Association.

Such a transition would reduce other health-related issues, said the organization, which used data on pollution from vehicles and from oil refineries to calculate its findings.

Alabama would experience approximately 500 less asthma attacks per year, about 38 fewer premature deaths and prevent more than 2,200 lost workdays annually.

The transportation sector is one of the main contributors to air pollution and climate change, said William Barrett, the association’s director of advocacy for clean air and the study’s author.

“We have the technology to transition to cleaner cars, trucks and buses, and by taking that step we can prepare Alabama for the future while also seeing the health and economic benefits forecasted in ‘The Road to Clean Air,’” Barrett said. “Especially as our state faces the impacts of climate change, such as extreme storms, this is a powerful and practical opportunity to take action to improve our economy, our health and our future.”

Trading combustion-powered vehicles for electric ones could result in $11.3 billion in avoided health costs across southern states by mid-century, the report estimated, and prevent roughly 1,000 premature deaths.

Nationally, Americans stand to save $72 billion in health costs and $113 billion in avoided climate change impacts, the ALA said.

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The path to that future depends on leaders factoring public health effects into decisions about transportation, Barrett said.

That involves steps like pursuing electric vehicle fleets when purchasing decisions are being made and supporting the creation of enough charging stations along highways, roads and at truck stops.

Investing in that infrastructure can drive wider economic benefits, Barrett said. He cited California’s increased manufacturing of electric vehicles.

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Tesla is the most well-known producer that has located there, but Barrett said that makers of trucks and buses have also chosen to locate their facilities in the state.

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