Economic growth is clearly visible in every corner of Alabama. For decades, Alabama has been among the nation’s leading states in recruiting new businesses and developing existing industries. We must retain our competitive edge in economic development and job creation.
Many factors have contributed to that success, including: a productive workforce; a positive business climate; excellent quality of life; strong support from governmental leaders; and competitive economic incentives. Incentives can tip the scales and serve as the deciding factor for a business to locate or expand in Alabama. Once a company comes to Alabama the other factors mentioned above kick in and provide an operating environment that leads to continued reinvestment and growth.
The Alabama Joint Legislative Study Commision on Renewing Economic Development Incentives recently finished a thorough review of two critically important job creating laws. The Commission has recommended that the Alabama Jobs Act incentives and the Growing Alabama Credit, two foundational tools for creating jobs in our state, be reauthorized by the legislature in the 2023 regular session.
The Business Council of Alabama was proud to be asked to participate in this committee which was chaired by Lieutenant Governor Will Ainsworth. BCA is Alabama’s largest and most diverse business association representing the concerns of nearly 1 million working Alabamians. Our role is to advocate for business to ensure that the climate supports growth and economic expansion.
Lieutenant Governor Ainsworth recently underscored the importance of these incentives, stating, “Our goal is simple – we want to have the best incentives not only in the southeast, but in the nation as a whole. Reauthorizing these programs is going to be essential in attracting high paying, long lasting 21st century jobs.” The BCA and its membership couldn’t agree more.
BCA’s membership has made renewing these important economic development tools its top priority for the upcoming legislative session and we look forward to working with the legislature to ensure that they are continued with no interruption.
Other key legislative leaders including Senate President Pro Tem Greg Reed, R-Jasper; Senate Minority Leader Bobby Singleton, D-Greensboro, and Speaker designate Nathaniel Ledbetter have all expressed support for renewal. The support from these pro-jobs leaders is appreciated and BCA encourages the legislature to move swiftly and in a bi-partisan manner to ensure that these job supporting measures remain in the toolbox of state and local economic developers and elected officials across Alabama.
BCA heartily concerns itself with comments from legislative leaders who are supporting the renewal of the incentives. “When you look at the top issues Alabamians care about, economic development and job creation are right at the top of that list,” said Senate Pro Tempore Greg Reed. “States around our region are all competing with each other to attract jobs and create economic growth and we need to make sure that we win those competitions so good-quality jobs will come to our state and our communities.”
In my over thirty years of financial services and business experience, I have seen first-hand the benefit that economic incentives have on our communities and state as a whole. Virtually every state aggressively utilizes incentives and Alabama must not fall behind. Creating and maintaining a business climate that fosters job creation and retention is at the core of BCA’s mission. Retaining these incentives fits perfectly with our commitment of advocating for pro-jobs and pro-growth legislation.
The Alabama Jobs Act was passed by the Alabama Legislature in 2015 with bipartisan support, and most recently reauthorized by lawmakers in 2021. The incentives were expanded to create opportunities in every corner of the state by identifying specific “target” and “jumpstart” counties. The Alabama Jobs Act reauthorization expires July 31, 2023, making renewal an immediate priority in the 2023 legislative session. Failure to renew this act would send the wrong signal to current and future industrial prospects that are considering locating in Alabama. It is vitally important that pending economic development projects go forward with the assurance that these incentives will be available.
According to reports from the Alabama Department of Commerce the Alabama Jobs Act incentives are projected to create a 173 percent return on taxpayer investment within 20 years. The report also showed that between July 2015 when the act went into effect and the end of 2021, projects supported by the Jobs Act have generated commitments of over $17 billion in new capital investment and over 34,000 jobs.
The Alabama Jobs Act incentives have not only brought jobs, but good-paying jobs to the state.
For these projects, the average hourly wage was up 36 percent at $23.69/hour compared to the Alabama median hourly wage of $17.43.
The numbers don’t lie. The Alabama Jobs act is a “win-win” for Alabama taxpayers and for businesses that locate or expand in Alabama.
In addition to reviewing the Alabama Jobs Act incentives, the Joint Legislative Study Commission also reviewed the other economic development incentives like those of the Growing Alabama Credit to evaluate their effectiveness in today’s environment. These incentives provide new flexibility for state and local economic developers to pursue growth projects involving the technology industry and minority and veteran owned companies.
While incentives are important, transparency and accountability to taxpayers about how public funds are utilized is an absolute necessity. Incentives like those in the Alabama Jobs Act and Growing Alabama Credit are “performance based” and provide income credits for qualified businesses based on new job and investment creation. The incentives are transparent and are reviewed by an established legislative committee to ensure that the jobs that are promised are jobs that are delivered.
The facts and data are present to prove that incentives in the Alabama Jobs Act and the Growing Alabama Credit have propelled and will continue to fuel the upward economic trajectory in our state. Alabama’s economy is thriving, and businesses of all sizes are applying for and benefitting from these incentives. Plain and simple, economic incentives are working in Alabama and should be reauthorized in 2023.