The Alabama Jobs Act has been in the spotlight since proposals to remove the caps on the tax credit incentives provided for corporations who decide to set up shop in the state.
The 2015 Alabama Jobs Act gives qualified corporations, who desire to open in Alabama, various tax credits and rebates as incentives for bringing business to the state.
Recently, the economic incentives study committee met, where Alabama Department of Commerce secretary Greg Canfield suggested removing the state's current incentive cap. The current cap rests at $350 million per year; a number Canfield claims the state is rapidly approaching.
There are mixed feelings across the state about Jobs Act incentives. While many consider incentives imperative in bringing economic prosperity to the state, others consider incentives "corporate welfare."
Alabama Lawmakers vary on the prospect of removing the cap on Jobs Act incentives, as they vary on the scope and extent that incentives should play in state politics.
State Sen. Arthur Orr (R-Decatur), who has been vocal in his opposition to economic development incentives, says he would support some form of federal action to prohibit the courting of corporations through incentives.
"The rules are: states engage in the incentive game and play it against each other, and to be competitive, Alabama has got to play the game," Orr said. "[W]ould I prefer the Feds to come in and say, 'no state can give any economic incentives to any company, period?' That would be nice unless there is an international competition.
"[T]here are some international, I would say between Mexico and Canada, that we are competing with for sites and jobs. But nationally, when it's Alabama vs. Texas, it would be nice if the feds said, 'hey, you can't do that.'"
While Orr states that he believes Canfield has done an "excellent job," removing the cap seems to be a bridge too far.
"To give a blank check concerns me greatly," Orr said. "Particularly when it comes out of the education coffers. Because I would certainly submit that education is the future of our state as far as improving, growing, and becoming a much more prosperous place to live."
Lieutenant Gov. Will Ainsworth, who chairs the economic incentives study committee, insists the economic benefits are a net positive for the state and should not be dismissed as corporate welfare.
"[O]ne of the things that I was real encouraged on is a lot of times that is viewed as corporate welfare," Ainsworth said on FM Talk 106.5's "The Jeff Poor Show." "It is not that at all. Our state is benefiting, you know, in a big way financially from these companies coming here and the amount of investment, taxes our state is receiving because of that. And you know, why does that matter? Because obviously, if the economy is doing well, we are having more money coming to our state, then we can do things such as tax cuts for individuals.
State Sen. Larry Stutts (R-Tuscumbia) says he is not entirely opposed to competitive tax incentives. However, he says he would like to see more incentives for small businesses in the state.
"The bottom line is most of the jobs in the state are supplied by small businesses," Stutts said. "It's a big splash to recruit Toyota Mazda, Mercedes and all these things, but I'm for tax breaks for small businesses. Most of the jobs are created by businesses that employ less than 50 people, and we are not giving any incentives to them."
State Sen. Sam Givhan (R-Huntsville) takes a more middle-of-the-road approach to economic incentives.
Givhan says removing incentives altogether would be an unrealistic goal for the state. He also noted that while he would support increasing the cap, having some sort of restriction in place was paramount.
"I think there needs to be some kind of check," Givhan said. "If something is so big that, by golly, we have to increase the cap, then just call us into special session. If it's that big of a deal, we can go to Montgomery and take care of it."
"I don't have a problem going up to half a billion dollars, and I could be maybe talked into more than that. … I just don't know that we need to open it wide and have no cap on there whatsoever."
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