While speaking to the Business Council of Alabama (BCA) on Tuesday morning, House Speaker Nathaniel Ledbetter (R-Rainsville) voiced strong support for expanding economic incentive programs for select businesses in the state.
“The state’s economy is stronger than any other time in our history, and we have an abundance of good-paying jobs, but while our state achieves more milestones, Alabama is at the cusp of transforming the economy for generations to come,” Ledbetter said.
Ledbetter insisted that renewing the state’s economic incentives would be one of the “biggest legislative issues this session.”
“This is vital for our economy, vital for our children and vital for our grandchildren that we pass these incentives,” he said. “So I’m asking you this morning to join me and this legislative body to get this thing done.”
Governor Kay Ivey and several other state legislators have called for renewing economic incentive programs, such as the Alabama Jobs Act, which offers tax credits and abatements to certain businesses in Alabama. Economic incentive proponents argue that special privileges and awards attract more business to the state and create jobs.
Last month, economists gathered for an event hosted by Troy University’s Johnson Center for Political Economy were critical of such incentive programs.
Director of the Political Economy Research Institute Dan Smith said there was no evidence that economic incentive programs work. They may even discourage homegrown entrepreneurs, and entrepreneurs out of state could be discouraged because Alabama continues to expand incentive programs, he said, regardless of the evidence.
According to Smith, a better way to attract business to the state is to decrease the tax burden for everyone. He noted that tax collection per person in Alabama was relatively high compared to neighboring states.
Some businesses that have received economic incentives in the past have been accused of supporting left-wing causes and taking advantage of underage illegal immigrant labor.
One nonprofit organization labeled the Birmingham-based grocery delivery service company Shipt “high risk” due to several factors, including what it claims are policies that discriminate against religious organizations. Shipt has also donated to left-wing groups like the ACLU, Black Lives Matter and the Human Rights Campaign, which advocated against legislation last year that prevented minors from having sex changes.
Shipt was once praised by Ivey and received tax breaks for the state and almost $2 million in incentives from the City of Birmingham to go through with an expansion project in 2018.
Two suppliers of Hyundai Motor Company have been accused of violating child labor laws. One was even accused of hiring a 14-year-old Guatemalan girl to assemble auto body components. The U.S. Department of Labor has already charged one of the suppliers with child labor law violations.
Alabama lawmakers pushed for Hyundai to come to Alabama in the 1990s and early 2000s, offering hundreds of millions of dollars in economic incentives. Former Alabama Governor and convicted felon Don Siegelman dubbed it “the biggest economic development project in the history of Alabama.” In 2018, Alabama offered Hyundai $59 million in incentives for an expansion project projected to cost almost $400 million.
Hyundai initially announced its intention to drop the suppliers in October but is now backing away from its statements. Hyundai said the suppliers have taken “corrective actions” against the staffing agencies they were using.
Nevertheless, Ledbetter said the state's efforts to incentivize companies to relocate here had earned it a 173% return.
"That's a pretty good investment for our state," Ledbetter said.
The BCA was founded in 1985 as a voice for Alabama’s business community in the Statehouse. It was instrumental in the 2010 election of the first Republican legislature in 136 years.
Formerly led by newly-elected U.S. Sen. Katie Britt, the BCA is now headed by Helena Duncan, a consistent Democratic primary voter and far-left U.S. Rep. Maxine Waters (D-Calif.) donor.
Ledbetter also said that expanding workforce programs was “essential to fulfilling high-paying jobs” and commended the Rebuild Alabama Act.
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