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Alabama approves incentives to attract industry


Alabama Governor Kay Ivey has signed a package of economic development bills into law, acting shortly after lawmakers gave the legislation final approval. The new laws reauthorize and expand the tax breaks used by Alabama to lure new industries. The Republican governor has called the four-bill package "the game plan" for economic development in her state. The centerpiece of the package is a reauthorization of the Alabama Jobs Act, which gives tax credits for capital investments and cash rebates for job creation. Lawmakers who voted against the proposal expressed concern about the cost on the education budget, particularly new handouts for tourism projects.

The Alabama Senate voted 29-6 earlier Thursday to approve the centerpiece of the package, a bill that reauthorizes and expands the Alabama Jobs Act and gives tax credits for capital investments and payroll rebates for job creation. The program is the state's primary economic recruitment tool and was set to expire this year barring renewal.

The legislation authorizes the program for another five years and incrementally increases the cap on incentives from $350 million for 2022 to $475 million for 2027. It would also establish a new $10 million in incentives for tourism projects such as amusement parks, resorts, water parks and aquariums.

Senate President Pro Tem Greg Reed said the approval will "continue building on our success and providing more, higher-paying jobs to the citizens of our state." Lawmakers who voted against the bill expressed concern about the cost on the education budget, particularly because of new state hand-outs for tourism projects.

"Every time we chip away, take away - trying to do some good — just remember it comes at some cost. This is not Washington D.C. Every time there is a winner, there is a loser because we have limited funds," Republican Senator Arthur Orr, the chairman of the Senate education budget committee, said.

Alabama and other southern states have used large incentive packages, where state and local governments often work together to provide land, infrastructure work, worker training, tax breaks and rebates to lure industries. In 1993, Alabama used a $253 million incentive package to bring Mercedes-Benz to the state and has since used multiple large incentive packages to entice auto manufacturers and other industries.

Orr expressed concern that states have entered an arms race of sorts to offer larger and larger incentive packages. "My concern is how states are played against each other by the companies and the taxpayers pay," Orr said.

Lawmakers also approved legislation to create a program where local economic development organizations could seek financial help with site development and another bill to require the state to publish information about incentive agreements on its website.

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