The Alabama Jobs Act, a 2015 law passed to create economic incentives to recruit businesses to the state, will sunset in July 2023 unless the Legislature takes action in its upcoming session.
Gov. Kay Ivey briefly addressed the topic as one of the priorities of the incoming legislature in its first session.
“It’s vitally important that we continue to focus on economic and workforce development efforts,” Ivey told legislators at their orientation last week. “This starts with renewing Alabama’s economic development incentives so they can continue to serve as a reliable tool for job creation and industry expansion.”
The Joint Legislative Study Commission on Economic Development Incentives earlier this month recommended the extension of the act, plus raising the cap from its limit of $350 million.
Republican and Democrat leadership released statements agreeing with the recommendation.
“Growing Alabama’s economy and creating good jobs for our citizens is something we can all agree on,” said Senate Minority Leader Bobby Singleton, D-Greensboro, in a statement. “This commission has been thorough in studying existing incentives and exploring how they can be improved and further deployed to really capture their full potential. I thank this commission for its diligent work and look forward to seeing the impact its findings will have on communities across our state.”
Although the commission recommends increasing the cap, no recommendation was made about how much to increase the limit.
Alabama Secretary of Commerce Greg Canfield told members of the Association of County Commissions earlier this month that the cap limits recruitment efforts because the state has to include any outstanding offers against the cap, despite knowing that not all offers will be taken.
He also explained the importance of economic incentives, stating that in a “perfect world” where no states could offer incentives, Alabama is at the top of a 10-state survey ranking how attractive the state would be to businesses.
But factoring in the reality of other states’ incentive models, Canfield said Alabama would drop to eighth without incentives in place. And with the current model provided by the Alabama Jobs Act, Canfield said the state lands in second or third place.
“I can live with that,” Canfield said.
Senate President Pro Tempore Greg Reed, R-Jasper, agreed it is crucial to extend the incentive model.
“When you look at the top issues Alabamians care about, economic development and job creation are right at the top of that list,” Reed said. “States around our region are all competing with each other to attract jobs and to 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. Alabama is the greatest state in the nation to live and work, and these incentives will play a key role in keeping it that way.”