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Alabama leaders unveil extensive seven-bill package designed to expand workforce

MONTGOMERY, Ala. — Almost two months after Alabama Lt. Gov. Will Ainsworth revealed that lawmakers were hard at work on a “transformative” workforce development package, he, Gov. Kay Ivey and other legislative leaders unveiled seven bills Thursday at the State Capitol  that they hope will significantly increase labor participation.

Characterized as a successor to last year’s economic incentive package known as the ‘Game Plan,’ this new package includes a number of significant proposals, among them new child care and housing tax credit programs, an initiative that will allow for cities and counties to offer new economic incentives, and a restructuring and consolidation of the state’s labor department.

“While we have record-low unemployment, our labor force participation rate is one of the lowest in the country, and y’all, that’s not low in a good way,” Ivey said during the unveiling.

“As governor, I’m calling on our Legislature to once again make the needed reforms so that our workforce development programs work better for us and its two customers: job seekers and our employers.”

Gov. Kay Ivey speaks at the unveiling of a new package of workforce development bills on March 21 at the State Capitol.

While Alabama’s unemployment rate remains at a healthy 2.9%, the state’s labor participation rate currently sits at 57.4%, among the lowest such rates in the country. 

Over the past year, state lawmakers have devoted significant time and resources into identifying barriers to employment for Alabamians, and found that child care costs, transportation and housing to be among the most frequently cited barriers for those without jobs.

Two of the seven bills, their sponsors and supporters say, will directly target those barriers.

House Bill 358, carried by Rep. Anthony Daniels, D-Huntsville, and in the Senate by Sen. Garlan Gudger, R-Cullman, would establish a new child care tax credit program that could significantly cut child care costs for families.

“We know that the workforce participation rate in Alabama is not where we want it to be, and this is another tool in the toolbox that will give us an opportunity to chart a path for families to be able to re-enter the workforce,” Daniels said.

“A mother or a family that wants to re-enter the workforce will now have an opportunity moving forward, after this piece of legislation moves through both houses and is signed by the governor, where the employer will be able to get a tax credit for building a child care facility on site, or also receive a credit to be able to then distribute to their employees.”

The program would be capped at $15 million in its first year, and increase annually by $5 million for five years until reaching $35 million. A tax credit of up to $25,000 would be awarded to companies that construct their own child care facility, and child care facilities would be awarded up to $2,000 for each child they take on.

House Speaker Nathaniel Ledbetter, R-Rainsville, also championed the child tax credit bill, calling its introduction a “momentous occasion.”

“We hear the fact that 43% of working-age people are not working; some people say they need to get off their couch and go to work, but it’s not that simple,” Ledbetter said. 

“When you’ve got families with single moms that have two kids and they’re paying (too much of their household income) for child care, there’s a problem. I think for us as leaders in the state, we have to try to fix those problems.”

Sen. Bobby Singleton speaks at the unveiling of a new package of workforce development bills on March 21 at the State Capitol.

Another bill whose sponsors hope will break down barriers to employment was House Bill 346, carried by Rep. Cynthia Almond, R-Tuscaloosa, and by Sen. Chris Elliot, R-Josephine in the Senate. Under HB346, up to $5 million in tax credits a year would be awarded to eligible housing projects that prioritize the construction of affordable, multifamily housing.

Another major component of the package is the Alabama Workforce Transformation Act, a bill that would consolidate the state’s workforce agencies and establish a cabinet-level workforce development official to oversee workforce development in the state. Ainsworth first teased the proposal in February before its filing.

“Business owners all over the state tell me the No. 1 limiting factor to growth is people; we want to solve that,” Ainsworth said. “We believe everybody’s got a God-given ability, everybody’s got a passion, and the purpose of education is to make sure that they get ready for a job.”

Another bill in the package is the Alabama Career Pathway Act, a bill that would provide alternative routes for younger Alabamians to receive a high school diploma, with a focus on developing skills and experience in high-demand industries.

“The goal of education should be to get students ready for a job, and we’re going to have a new diploma working with K-12, a workforce pathway diploma,” Ainsworth said. 

“The idea is simple: they’re going to spend less time in the classroom (and) more time learning a trade, so when they graduate high school, they can go right into the great jobs we’re going to have in Alabama.”

Lt. Gov. Will Ainsworth speaks at the unveiling of a new package of workforce development bills on March 21 at the State Capitol.

The Innovation District Act was another bill highlighted during the unveiling, sponsored by Sen. Bobby Singleton, D-Greensboro, and in the House by Rep. James Lomax, R-Huntsville.

“In the past, cities and counties have only had abatement taxes that they can offer to industry when they come to their area,” Singleton said.

“Now, we’re going to give them the opportunity to set up this innovative district to where they can offer sales tax; they won’t have to use the state all the time, they can put together their packages and put their own skin in the game. This is going to be a game changer.”

The newly permitted innovation districts, Singleton said, could comprise multiple cities or counties, allowing for municipalities to pool their resources together to offer incentive packages to draw in investment from businesses. 

Under the bill, municipalities would be permitted to offer a combination of tax exemptions, sales tax, or any tax not committed to education as economic incentives.

“I know my little town of Greensboro may not be able to have the capacity by itself to be able to bring in industry, but meshed up with the county or counties next door, we may be able to be successful at it,” Singleton said.

The child care and housing tax credit programs combined, Ledbetter estimated, would cost around $30 million to the state’s Education Trust Fund in its first year. Neither Ledbetter or Singleton, however, expressed concern over the cost.

“I think we’ll see a tremendous return for the money we invest into it,” Ledbetter said.

With all seven bills having been filed Thursday, Ledbetter told Alabama Daily News he anticipates a number of them being taken up once lawmakers return to Montgomery the first week of April after their second week-long spring break.

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