MONTGOMERY, Ala. — Ten years after the adoption of the Alabama Jobs Act, which provides financial incentives for companies that invest and create jobs in the state, the initiative has generated more than $25 billion in capital investment, and created nearly 40,000 jobs, Alabama Commerce Secretary Ellen McNair said on Tuesday.
“That is a really strong report,” McNair said, speaking before the Joint Legislative Advisory Committee on Economic Incentives at the State House. “…So we are meeting those goals of a positive return on investment for the state.”
Adopted in 2015, the Alabama Jobs Act established a number of financial incentives for businesses investing in the state, including cash rebates of up to 3% annually for employees and investment credits of up to 1.5% annually for a period of up to 10 years, and in some cases, 15 years for targeted counties.
With fresh data in hand, McNair also shared that in the last year alone, more than 220 capital investment projects in the state were announced, representing more than $4 billion in capital investment. Of those 220 projects, McNair said her agency used financial incentives for 15.
“We are really being prudent and discerning with which projects we’re using these state incentives for,” she said. “Those (15) projects represented about $1.5 billion, representing about 2,000 jobs.”
Sen. Arthur Orr, R-Decatur, a member of the committee, asked McNair to expand on the criteria her agency uses to determine which projects get financial incentives. McNair explained that it often came down to wages, and typically involved negotiations with local municipalities in the hopes they would offer their own financial incentives for the project to match the state’s.
“We’re looking that these wages are higher than the average wages in the area, and that there’s a positive return on investment to the state,” McNair said. “That’s the criteria.”
McNair went on to share that in the past 10 years, in total there have been nearly 3,000 capital investment projects in the state, representing capital investments of nearly $68 billion.
“Looking at the 10-year data that’s come in, it’s very exciting for us to look back and see the proof’s in the pudding, so thank you very much,” said Rep. Alan Baker, R-Brewton, also a member of the committee.
State leaders have doubled down on increasing financial incentives for companies investing in the state, adopting a four-bill package into law in 2023 that expanded and established more financial incentives for business startups and expansions. Dubbed the Game Plan, that bill package also mandated that the Commerce Department publish state financial incentive records, which include proposed salaries and the state’s return on investment.
On the Alabama Jobs Act’s return on investment, McNair said the ten-year return on investment, originally projected to be 36%, came out to be 135%, netting the state more than $6 billion in new tax revenue.
Little discussion was held on the new data, other than Orr proclaiming that McNair had “wowed and bedazzled” the committee.