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Incentives: Why they are important!

There has been much discussion in the past few weeks about Alabama's new proposed incentive package.  Earlier this month, Governor Bentley led his State of the State Address by laying out the need for incentive reform.  Essentially what it boils down to is competitiveness.  Years ago, when Alabama was looking to recruit companies like Mercedes, we needed a new approach to business incentives, a reason for companies to give Alabama a second glance rather than merely considering our past and shaking their heads.

In the early 1990’s the legislature and Governor Folsom took bold steps to make us a competitive state.  And companies took notice.  Companies like Mercedes, Honda and Hyundai led the way for Alabama to become the automotive giant that we are today.  If a rumored expansion at Hyundai were to happen, Alabama will soon be producing more automobiles than any other state in the country.  This was unfathomable in 1993 prior to the announcement of Mercedes. 

This transformation had great impact on places like Marshall County.  With the announcement of Honda came wave after wave of suppliers looking at northeast Alabama.  In 2000 we had no direct automotive supplier jobs in Marshall County.  A couple companies made aftermarket parts but nothing on a large scale.  Today with companies like TSTECH, HFI and Newman Technology, over 1,100 people in Marshall County supply parts to companies like Honda, Subaru and Volkswagen.  The large-scale incentive packages that companies like Honda received, paved the way for this renaissance of manufacturing in Alabama. 

However, other states began to see our success and made changes in their tax incentive structure to make themselves more competitive.  We began to see projects like Volkswagen, Toyota and Yokohama Tire going to states like Tennessee, Texas and Mississippi.    Economic developers in Alabama began to worry that unless something was done to correct this, the forward progress we have made in the last two decades will begin to slow.  Some attempts were made in the last quadrennium to pass incentive reform with a little success, but Governor Bentley’s new proposal, the Made In Alabama Incentive Package will do the trick.  

The package consists of five bills that will essentially allow Alabama to be more competitive when attracting companies.  There are also components of the package that address retention of jobs as well as a designation for rural counties.   Currently, the package is working its way through the Alabama Legislature.  The MCEDC supports this package and is encouraging our legislative delegation to do the same.  For more specifics about the package click the following link.

Alabama House Passes Economic Development Bills in Made in Alabama Incentive Package

 

 

 

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Tuesday, 19 November 2019

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Marshall County Economic Development Council
2208 Ringold Street, Suite    1-A   |   Guntersville,    AL    35976   |   256-582-5100   |   info@marshallteam.org