Effect of jobs bill may be hard to measure
by Tim Lockette
Star Assistant Metro Editor
Mar 24, 2011 | 1889 views |  0 comments | 7 7 recommendations | email to a friend | print
A bill proposed by Gov. Robert Bentley this week would give small businesses a $1,000 tax break for every new employee they hire in 2011.

Bentley and the bill’s sponsors, Rep. Blaine Galliher, R-Gadsden, and Rep. Arthur Orr, R-Decatur, say the measure would jumpstart hiring in a state that is still desperately in need of jobs. But if the experience of local business leaders is any indication, it may be hard to measure just how much of an effect the bill would have on job-seekers.

“Any time you can help small businesses, that’s positive, and I’m sure this can only help,” said Don Hopper, who recruits new businesses to the area as executive director of the Calhoun County Economic Development Council. “But the local impact is hard to measure.”

Bentley held a press conference Tuesday to promote a bill called the Full Employment Act of 2011. If passed, the bill would provide a $1,000 tax credit to any business with fewer than 50 employees, for every new employee the business hires beginning Jan 1, 2011.

Bentley said the bill is an enhancement of the Alabama Reemployment Act of 2010, a bill Bentley sponsored as a state legislator. That bill allowed employers — small or large — to deduct 50 percent of the salary of most newly-hired employees from their state income taxes.

The 2010 bill became a centerpiece of Bentley’s campaign rhetoric. In campaign ads and debates, Bentley claimed the bill would create 5,000 jobs across the state.

But state officials still don’t know how great an effect the 2010 bill actually had on the job market. The Alabama Department of Revenue will eventually have an exact count of new employees businesses are claiming through the program — but that count isn’t ready yet.

“We won’t have data on that until after 2011 returns are in, and that won’t be complete until April,” said Carolyn Blackstock, spokeswoman for the department.

Local economic development officials have a hard time putting their finger on the local impact of the 2010 bill — but they are convinced it helped.

“I couldn’t say, right off the top of my head, how many have been hired as a result of the bill,” said Sherri Sumners, director of the Calhoun County Chamber of Commerce. Still, Sumners said, a tax incentive couldn’t hurt.

Hopper, of the Economic Development Council, said significant net growth probably didn’t occur in the number of workers in Calhoun County in the last year. Some businesses hired, others laid off and some re-hired workers they’d laid off earlier in the recession, Hopper said.

He said some of 2010’s biggest-hiring companies were industries such as Industrial Products Co., an Anniston auto parts supplier; Garcy, Piedmont plant which makes wooden store fixtures; and Anniston’s foundries.

Two of those foundries, Lee Brass and Union Foundry, produced some of last year’s most encouraging local news. Lee added 28 employees, according to news reports. Union Foundry’s workforce grew from 248 to 330.

Union’s spokeswoman says she doesn’t know whether Bentley’s jobs bill contributed to the hiring spurt — but she knows that industry fundamentals did help.

“Most of our business is from municipalities,” said Mickie Coggins, corporate communications director for McWane, Inc. which owns the foundry. “When the economy is bad, cities don’t spend as much money replacing fire hydrants and other equipment they’d get from us.”

Coggins said business improved in 2010 after a drop in 2009 — possibly because municipalities simply could no longer put off replacing certain items. She said it wasn’t possible to say whether stimulus funding played a role in those purchases.

Coggins also said she didn’t know whether Union would claim a tax credit under the 2010 jobs act for the employees it had hired. She noted that many of the hires were actually re-hires of workers who’d been laid off months before.

“I don’t know that our hires would even have qualified under the act,” she said.

Under Bentley’s proposed 2011 act, only small businesses would qualify a $1,000 tax credit — and they’d have to hire workers who are already on unemployment, employ them for a year, and pay them at least $10 per hour. Because it is effective for the tax year beginning Jan. 1, 2011, businesses may be able to claim the tax credit for employees who have already been hired.

But local officials say any aid would help.

“Anything you can do to help businesses, at this point, is going to help with the overall goal of creating jobs,” Hopper said.

Attempts to reach Bentley administration spokespersons for this story were unsuccessful.

Alabama’s seasonally adjusted unemployment rate for February was 9.3% according to the Department of Industrial Relations. In Calhoun County, 9.7% of the workforce was unemployed in February.

Star assistant metro editor Tim Lockette: 256-235-3560
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Effect of jobs bill may be hard to measure by Tim Lockette
Star Assistant Metro Editor

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