By Carrie Brown McWhorter
A projected revenue shortfall of $250 million or more in Alabama’s General Fund budget is evidence of Alabama’s need for economic development. Significant budget cuts to the agencies tasked with improving the business environment in the state could lead to even greater future economic weakness, according to Jim Byard Jr., director of the Alabama Department of Economic and Community Affairs (ADECA).
The Alabama Department of Commerce and ADECA both stand to lose ground in their efforts to bring businesses and industries to the state. For example the commerce department would have to scale back its outreach efforts. In an Aug. 24 tweet, Gov. Robert Bentley said “jobs are important to our citizens. Budget cuts to (the) Department of Commerce could hurt project recruitment efforts.”
ADECA could see even greater cuts, according to information provided by the governor’s office.
The Alabama Rural Development Office, the Small Business Office and the Appalachian Regional Commission all could be eliminated. Perhaps more important is the loss of state funds used to get federal matching funds for the Community Development Block Grant and Community Service Block Grant programs.
Byard said that in actual dollars, the projected budget cut for ADECA is around $5 million. Even that loss will have “huge consequences” for communities around the state, he said.
“That $5 million allows ADECA to secure hundreds of millions of federal dollars that local governments use to pay for their community’s high-priority projects,” Byard said.
Byard said the grant programs offer a “great return on investment” for Alabama’s 460 municipalities and 67 counties. By allocating a small portion of the General Fund budget to ADECA, the state secures hundreds of millions of federal dollars that local governments use to pay for their community’s high priority projects.
“These grants allow local leaders to move forward on projects that boost local economies and improve the lives of residents,” he said.
Through the Community Development Block Grant program, local governments receive $24 million in federal funds for every $1 million in state funds, Byard said. As a result, a cut of $5 million potentially translates into a loss of $120 million in federal funds for those projects.
Result in unmet needs
Byard said ADECA funds water and sewer improvements, recreation projects and disaster recovery assistance. Without ADECA resources many community needs would be unmet, he said.
“These grants also mean more local jobs and more paychecks that help the overall community to prosper,” he said.
The Alabama Department of Labor will see the results of budget cuts as well, specifically in the area of mine safety. Projected cuts include layoffs, reduced mine safety inspections and the elimination of the training contract with Bevill State College for mine rescue teams.
Alabama ranks 13th among U.S. states for coal production, according to the U.S. Energy Information Administration. In 2013, the last year for which statistics are available, Alabama had eight underground coal mines and 31 surface coal mines. Approximately 4,200 miners work in the industry in Alabama.
The governor’s office also said that up to 11 National Guard armories around the state could close because the state would no longer pay their electric bills.
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