AEA, Jones on opposite sides of bills

Published 12:01 am Thursday, February 23, 2012

A spokesman for the Alabama Education Association said Wednesday that two so-called “jobs” bills that passed the Alabama House of Representatives last week would open the lockbox on education funding without holding industries that get tax breaks from the legislation accountable.

But Covington County’s representative and a local economic developer say the bill is a good one.

House members last week passed House Bill 159, a constitutional amendment that allows voters to give the governor and the Alabama Development Office the authority to offer cash payments to corporations to recruit new industry to Alabama and prevent existing industry from leaving the state. The companion House Bill 160, which becomes effective only if Alabama voters approve the constitutional amendment, sets parameters for how those incentives can be used.

At present, state income taxes are guaranteed for school use, and have been since 1947. If approved, the constitutional amendment would allow some companies to receive a cash payment roughly equivalent to its employees state withholding taxes, which normally would go to the state’s Education Trust Fund.

In a conference call with state reporters Wednesday morning, AEA spokesman David Stout said AEA is opposing the bills because they would erode funding for education, and because they don’t hold industries accountable once they receive the cash payments.

Stout said the legislation is egregious in that it does not protect education funding.

AREA development magazine consistently lists Alabama as one of the top states for providing incentives to industries, he said.

“If we are No. 1 in incentives, and 44th in per pupil spending, why do we need more incentives?” he said.

The bills, which have not been passed by the senate, give the governor sole discretion in determining who qualifies for the state income tax incentive. It also allows the incentive to be used as a retention tool for current industries, so long as they don’t cut more than 33 percent of their workforce.

Covington County Economic Development Commission president Tucson Roberts spoke in favor of the bills when they were before committee last week. He said that incentives aren’t always competitive, and that at present, Alabama’s incentives are long term and take 10 to 20 years to pay out.

“Other states have attempted to make them more cash based and front end loaded and rely less on long term tax abatements ,” Roberts said. “This is an attempt to stay competitive.”

Covington County’s representative in the state House, Mike Jones of Andalusia, was not available for interviews yesterday. Questions posed to Jones yesterday were answered by Speaker Mike Hubbard’s communications director, Todd Stacy.

Stacy said the bills would help grow the Education Trust Fund (ETF).

“We know that for every one point drop in unemployment Alabama’s ETF gains approximately $160 million, so it’s in the best interest of all Alabamians that we create jobs,” he said.