Gov. Kay Ivey to announce launch of economic development agenda

On Monday, Alabama Governor Kay Ivey will officially launch her push to pass economic development bills at an announcement event in Montgomery.

Ivey will present “The Game Plan,” her plan for Alabama’s continued economic success.

“The Game Plan” is a proposed package of four economic development bills that Ivey insists will strengthen the state’s competitiveness for job-creating projects.

Ivey will be joined by Alabama Department of Commerce Secretary Greg Canfield, Senate President Pro Tempore Greg Reed, Speaker of the House Nathaniel Ledbetter, Senate Minority Leader Bobby Singleton, House Minority Leader Anthony Daniels, and Lieutenant Governor Will Ainsworth.

Ivey has made renewing the state’s economic incentives a key goal of her administration this legislative session.

“I am proud of the successful track record we have had in recruiting business and industry to both the rural parts of Alabama and the larger cities,” Ivey said in her state of the state address. “Since I’ve been governor, more than $42 billion have been invested in our state, which has created some 78,000 new jobs. For most of those, we can thank the Alabama Jobs Act. And any good coach knows when you have a play that’s working, the team needs to keep running it. Today, we have to look ahead and create an economic development strategy for the 2030s. I assured you we would have a winning game plan here at home, and tonight, I am calling on you to get behind our playbook for economic success, what I am calling The Game Plan. We will ensure stability and growth by renewing and improving the Alabama Jobs Act and the Growing Alabama Act.”

Speaker Ledbetter has said that renewing the Alabama Jobs Act would be one of the legislature’s first priorities.

“(The Alabama Jobs Act) is going to be priority No. 1 coming back after break. I think you’ll see a big push for that,” Ledbetter stated. “They’ve been very positive for our state. We’ve seen the job growth has been tremendous because of it. We’ve looked at the numbers; we got a return on the investment of 173% over a 20-year period.”

Ledbetter believes legislation on this needs to be done quickly.

The Alabama Jobs Act, created in 2015 and set to expire this year, has netted $256.8 million in incentives, Sec. Canfield reported in 2022. This amount outpaced the department’s benchmark of $164.6 million.

The Joint Study Commission on Renewing Incentives has discussed extending the Jobs Act through 2028 with a higher payout cap. Legislation has not been filed yet.

The Jobs Act created two separate incentives: The Alabama Jobs Credit and Alabama Investment Credit. The Jobs Credit gives companies cash rebates on their previous year’s payroll for qualified employees, and companies can get higher rebates if they locate in rural parts of the state or hire veterans.

The Investment Credit addresses a company’s capital investment and can be applied to several taxes, including income. Companies can receive incentives for up to 10 years.

The incentives are currently capped at $350 million annually.

Canfield said the Jobs Act has helped the state recruit 217 projects creating more than 38,000 jobs, and he believes the $350 million cap should be increased.

During her state of the state address, Ivey also proposed a plan to dole out $200 million in direct cash payments to Alabama businesses.

“I am also proposing we invest even more into our locally owned businesses – the ones engrained into the DNA of our communities – through a $200 million grant program known as our Main Street Program,” Ivey said. “These competitive grants will help revitalize our small cities and towns. When folks think of main streets, they should think of rural Alabama!”

Unemployment has dropped to just 2.5%, and state revenues have soared under Ivey. The state is so flush with cash that on September 30, it rolled $3 billion in surpluses from the 2022 fiscal year into the 2023 budget year.

Renewing economic incentives is also a priority of Alabama’s Big Ten Mayors.  The Mayors of Alabama’s ten biggest municipalities support the reauthorization and accompanying expansion of the Alabama Jobs Act and the Growing Alabama Act. The Mayors claim that the incentive programs established by these bills are critical to keeping Alabama’s economy globally competitive as we work to attract new businesses and jobs to our communities.

Some fiscal conservatives have criticized the push to renew incentives.

“Economic incentives should be Alabama’s last resort in securing new businesses,” the Alabama Policy Institute’s Justin Bogie argued recently. “Lower tax rates and a better-educated workforce will be enough incentive. It will also improve the lives of all Alabamians.”

At this point, it appears that the Governor’s plan, with perhaps some minor alterations in the legislative process, will pass the Alabama Legislature with broad bipartisan support.

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