Several things drive these critics. One of the main complaints was the requirement that the state Legislature has to come up with the money to cover the shortfall when investment returns are not up to expectations. Legislators never want to face that order, and in times like these when there is little money for anything, they want to do it even less.
Today, that criticism has begun to wane a bit if for no other reason than returns on RSA investments in recent months are running ahead of the national average. However, the critics also have quieted because Bronner has done what any smart CEO must do — he has opened lines of communication with those who have questioned how he invests. In the process, he has been able to reach an understanding with them.
For example, he went along with and helped shape the recently passed pension program for new state hires that will save money in the long run. After years of working with Democrats, Bronner has shifted gears and is cooperating with House Speaker Mike Hubbard, R-Auburn, and Senate Budget Committee Chairman Trip Pittman, R-Daphne, in an effort to get them to understand what the RSA does.
He also has hired former U.S. Attorney Leura Canary as his deputy director. Canary is the wife of William Canary, president of the Business Council of Alabama and a powerful force in the state Republican Party.
More than anything, Bronner has been able to convince many of the Republicans who are now running the state that one of the reasons some of his investments did not do as well in recent years was that he was investing in Alabama businesses — and Alabama businesses, by and large, did not do well over that period.
This is a message the Legislature needs to hear.
According to Keivan Deravl, an economist at Auburn University at Montgomery, the RSA invests 10 percent of its funds in Alabama businesses. Over the last 20 years, the total investment in the state has been $5.6 billion. The RSA has provided business loans, bought hotels and office buildings and built golf courses that it promoted from Florida to Michigan with free advertising through TV stations and newspapers in which it also invested. During that period, the RSA generated $1.1 billion in tax revenue for the state.
Last year, RSA investments were responsible for 4,332 in-state jobs and a payroll of $153 million, according to a report by University of Alabama economists Samuel Addy and Ahmad Ijaz.
In short, when it comes to job creation and economic stimulation, Alabama legislators should look more closely at what David Bronner and the RSA investments have done for the state. They also should consider supporting him more and criticizing him less.
Perhaps that’s already happening. The other day, Speaker Hubbard told the Associated Press, “I’m very pleased with how Dr. Bronner has worked with us and addressed our concerns.” Sen. Pittman added, “I think he’s the best person to work these investments and generate the best returns.”
This page agrees. Perhaps the Legislature should follow Bronner’s example and do a bit more investing in Alabama.
