Published On: 08.06.15 | 

By: Michael Tomberlin

Rural economic development remains a challenge in Alabama

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The same problems that have hampered economic development efforts in rural Alabama for decades are still cited as the greatest impediments today.

A lack of population means a lack of workforce. Education shortfalls lead to a lack of trained workers. Infrastructure gaps from interstates to fiber optics lead to a lack of suitable sites.

More often than not, major project announcements in the state go to counties with big cities – which have large populations to support the workforce and developed sites close to interstates and railways.

The state has tried to convince companies to consider more rural areas of Alabama for their projects. Approaches have included regionalism, promoting agriculture and outdoor tourism and increasing incentives to certain counties in the state.

The latest economic development incentives passed by the Legislature and signed by Gov. Robert Bentley this summer include several tax abatements and lower income tax and capital credit thresholds for counties found to be in a “favorable geographic area.” Those areas are based primarily on population but can also include specialized zones that carry other criteria.

“The state as a whole has to be competitive in order for rural communities to even have a chance and the state is more competitive now, in my opinion, because of those packages,” said David Hutchison, executive director of the Butler County Commission for Economic Development.

Hutchison is part of a rural economic development task force the Economic Development Association of Alabama organized to address the needs of rural counties. The task force was active in passing the latest incentives.

Full and partial counties that are included in the latest incentives targeting rural communities.

Full and partial counties that are included in the latest incentives targeting rural communities.

“Our major focus for the past six or eight months has obviously been legislation,” he said. “We wanted to see if we could get some legislation passed that would have a positive impact on giving rural communities the opportunity to compete more for projects.”

Hutchison said he is glad to see special incentives for rural counties, but he would like to see more entire counties included, not just zones or parts of some of the counties. The qualifying counties have populations of less than 25,000 and are designated as “less developed” by the Department of Labor.

“My personal opinion is we were semi-successful,” he said. “We hoped, or I hoped, for 30 or 35 counties. We ended up with 25 counties. We look at it as a stepping stone. We’re going to try to work with it this year and then go back next year and maybe talk to some more legislators into trying to expand from the 25,000 population up to maybe 30,000 to 35,000 or 40,000.”

Hutchison said rural counties don’t always have the large economic development organizations found in Alabama’s largest cities, but they have to be ready to use and promote their own attributes and their existing industries.

“Rural communities have to be more aggressive and somewhat independent in trying to develop their own projects in a lot of cases,” he said.

More is being done through education and workforce training programs to address needs in rural parts of the state, officials said.

Rural communities are seeing some progress.

Alabama Gov. Robert Bentley speaks at the Google announcement. (Governor's Office, Jamie Martin)

Alabama Gov. Robert Bentley speaks at the Google announcement. (Governor’s Office, Jamie Martin)

Last month, Google announced plans for a $600 million data center at a former power plant in Jackson County.

In April, Mar-Jac Poultry Alabama LLC announced a new $25 million feedmill in Franklin County’s Spruce Pine community, which retained 20 jobs from a nearby facility and will create 30 new ones. Mar-Jac also announced an additional $15 million in its other facilities in Northwest Alabama.

Last year, GD Copper USA opened up a $100 million copper tubing plant (pictured at the top of the story) in Wilcox County’s Pine Hill community, creating more than 300 jobs.

Alabama Commerce Secretary Greg Canfield said he would like to see all of the state get consideration from a large pipeline of projects currently eyeing Alabama. But, he said, companies have criteria that often eliminates many parts of the state from consideration.

“Most of the project activity is looking at different parts of the state, which is good,” Canfield said. “You know, we’ve had a lot of interest in the past in North Alabama, particularly in the Madison County and Huntsville areas, Limestone County. That has been driven by two factors – one is site availability and (the other is) workforce availability. If we can focus that same winning combination in other parts of the state, we will continue to see success in all parts of the state.”