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Opinion | Incentive programs essential for higher quality of life in Alabama

With the Alabama Jobs Act and the Growing Alabama Credit, communities will have important tools in their toolbox to achieve growth.

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The Alabama House and Senate have been in full swing since the 2023 Legislative Session began in early March, and one of their top priorities has been economic development and job creation.

At the top of the Legislature’s list of economic development priorities is the reauthorization and strengthening of two critical economic development programs – the Alabama Jobs Act and the Growing Alabama Credit.

Before we get into these important incentive programs, let’s talk about what economic development really means.

To some, any progress in a community would be considered economic development, and they’d be right. Bike lanes, new retail, improved walkability, new healthcare infrastructure and other improvements all make a community’s quality of life and attractiveness better for both existing and incoming citizens. The question is how do you create these community improvements?

The view shared by the hard-working people at the Alabama Department of Commerce’s Business Development Division, most of their local counterparts, and their utility partners – including Southeast Gas – aims to improve the quality of life for the people of Alabama through the recruitment of high-quality jobs. Those jobs then provide the disposable income needed to entice the retail and service businesses to set up shop. The increases in combined individual tax revenues and business tax revenues then allow governments to provide more services to their citizens. In short, if people have high-quality, full-time jobs with good pay and benefits, the services needed to support that industry and their employees will follow.

Attracting a job creator is primarily accomplished by fostering a low-risk business environment and building trust that a selected community will be a long-term partner in the shared success of the business. Alabama is a state that looks for strong partners when recruiting new jobs and there are countless examples of communities within Alabama that continue to outperform their peers in larger states by implementing strong strategic plans for growth. 

Having a high-quality site, one with minimal risk to the prospective company you want to attract, is the best way to get a community into consideration for new investment and job creation. Without somewhere for the business to locate that meets their size, logistics, utility, and workforce requirements, everything else falls apart.  

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Many communities in Alabama are actively working to provide these sites and are doing it well, particularly in the region we serve at Southeast Gas. Strategies vary by area, but most begin with taking a hard look in the mirror and understanding who they are and what they want – this includes understanding what incentives they’re willing to use at the community level to attract the desired job creator. Once goals are agreed upon and established, communities typically start a process to acquire and improve their preferred site or industrial or research park. This is usually accomplished by leveraging a combination of public funds, state site development programs, and, on some occasions, private funds. All of this should be done with a strong and consistent marketing effort designed to keep the site at the forefront of decision makers’ minds.

The previously alluded to toolbox of State and local incentives is an important one to the overall success of the recruitment process. Since 2015, the State of Alabama has been a leader in the US with its common sense, performance-based incentives offered through the Alabama Jobs Act. They provide real value to qualifying companies and, while satisfying a stringent statutory reporting requirement, don’t burden the incentivized company with a difficult compliance process.  

The Jobs Act is an incredibly powerful tool but requires partnership at the local level. This is why it’s important to understand your community’s toolbox and how those programs fill gaps and complement the total incentive package prior to attempting to close the deal.  

Along with the passage of the Alabama Jobs Act came the Growing Alabama Credit. This tax credit is now the premier site development tool used in the state. It allows communities to direct a private company’s state income tax liabilities towards site and infrastructure improvements that prevent a property from being successful.  

Often these improvements wouldn’t be feasible if the community was left to finance the work themselves. We have only just begun to tap the potential of this program, but it’s already had major successes. An example of that success can be seen in the new state of the art Novelis aluminum mill in North Baldwin County. That project’s direct jobs and investment, in addition to the service industries that follow, will have a major impact on that area for decades to come. It’s a testament to what can be accomplished by a community that develops a strong plan and has the conviction to follow through to maximize the economic impact of a piece of property.

Alabama’s communities are at their best when they’re innovating and making products that add value to society. All in all, communities are masters of their destinies, but they aren’t alone. With key incentive programs like the Alabama Jobs Act and the Growing Alabama Credit, communities will have important tools in their toolbox to achieve growth and higher quality of life for their residents.

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