A report released Wednesday by Jobs to Move America called Alabama’s corporate tax incentive system “exactly the wrong way” to improve the state’s economy, citing $ 4 billion in freebies between 1993 and 2020 with sparse information about what taxpayers were in Received in return.
The report was written by former Democratic State Representative Patricia Todd, the JMA’s southern policy manager. The Hidden Costs of Alabama’s Tax Incentives describes Alabama’s approach as a lack of transparency and accountability and makes recommendations on how it could be improved to meet the disclosure standards of other southern states such as Florida, Louisiana, North Carolina, Mississippi and Tennessee.
There are the following policy recommendations:
- Have a unified economic development budget that would include a comprehensive accounting of all economic development programs (tax-based, subsidies, grants, etc.). Louisiana and Kentucky have already adopted this budget model.
- Hold annual public hearings on corporate subsidies so the public can ask questions and make recommendations.
- Hire a third party or independent legislative party to evaluate each incentive and post a report on a public website showing the level of the incentive, clawbacks, employee salary scale, return on investment, and work results. This ensures accuracy and transparency and should be done every three to five years.
- Provide the public with solid information about how the return on investment is calculated. This should include implications for communities, workers and current businesses.
- Make all grant and incentive programs transparent and give the public full access to all information about the grant and tax credits granted, the terms of the deal, and the extent to which the recipient has fully complied with the terms of the grant agreement.
The report finds Alabama ranks 49th on state tax collection rates while having some of the lowest educational attainment levels in the country and the highest rates of poverty and incarceration.
“Alabam public taxpayers’ money should be used to do as much good as possible for our communities – not to further enrich multi-billion dollar businesses,” said Todd. “The recommendations in this report will bring more transparency to our state’s tax incentive programs and ensure Alabamans have the information they need to hold businesses and officials accountable to the public.”