July 11, 2011

State of Alabama
Press Release: Alabama Department of Commerce

New ADO Director Has Tough Task Ahead

New Alabama Development Office Director Greg Canfield has a tough task creating jobs and growing tax revenue

Published: Sunday, July 10, 2010- The Birmingham News Editorial Board
New Alabama Development Office chief Greg Canfield meets the media shortly after being introduced by Alabama Gov. Robert Bentley in Montgomery on Wednesday. (The Birmingham News/David White)

Call the appointment of state Rep. Greg Canfield, R-Vestavia Hills, to the director's job at the Alabama Development Office a little bit of poetic justice.

Or maybe it's more like no good deed goes unpunished.

Canfield, remember, sponsored the much-needed "rolling reserve" budget bill, now law, that changed the way the Legislature writes the education budget. Instead of relying on revenue predictions that often are wrong, lawmakers starting next year will use the previous 15 years of tax collections to set a growth cap for the budget for K-12 schools, colleges and universities.

And now, it is Canfield's job as the state's lead economic developer to bring new jobs, and the tax revenue they create, to Alabama. In other words, fill those tax coffers, Mr. Canfield, so state budgets will grow.

Canfield, elected to the Legislature in 2006, may seem an odd choice for the job. He served two terms on the Vestavia Hills City Council. Canfield also was on the board of the Vestavia Hills Chamber of Commerce for six years and its president in 1997. He serves as a member of the governmental affairs committee for the Birmingham Business Alliance and is chairman of the House Commerce and Small Business Committee. But Canfield lacks experience working in the economic development community.

Gov. Robert Bentley said he is counting on Canfield's personal skills to make him an effective director. "Recruiting industry is still a people business," Bentley said. "If you cannot relate to people on a personal level, then you can't be a good economic recruiter."

Canfield relates well to people, so in that regard, he should be well-suited for the job. He needs to be.

The Great Recession has battered budgets for schools and for state agencies. From the 2008 fiscal year to the 2012 fiscal year, K-12 schools lost more than $800 million from the state Education Trust Fund, going from $4.13 billion to $3.32 billion in inflation-adjusted dollars. Alabama's drop of almost 20 percent in K-12 funding ranked highest among the 10 states with the lowest median household incomes, according to Remapping Debate, a reporting group that focuses on public policy issues.

It's true that stimulus dollars bridged some of the gap caused by those losses, but that federal money is just about gone for the 2012 fiscal year. And it's also true school systems receive local dollars.

But here's the larger point: The recession ravaged the budgets for K-12 schools, as well as colleges and universities, and it will take years just to get back to the 2008 high-water mark. The same is true with the slower-growing General Fund, which supports state agencies including Medicaid, prisons, human resources, public safety and health.

Even though the recession ended in June 2009, according to the National Bureau of Economic Research, it surely doesn't feel that way to many Alabamians or to state and local governments.

Alabama's jobless rate actually rose to 9.6 percent in May, the latest data available, although state officials blamed the spike on the April 27 tornadoes that destroyed thousands of businesses. And the recent news on tax collections for the education and General Fund budgets reinforces the notion that it will be a years-long climb to get back to where we were. For the first nine months of the current fiscal year, October through June, revenue grew a modest 3.6 percent in the Education Trust Fund compared to the same period a year earlier. General Fund revenues jumped 18 percent compared to the same period a year earlier, but most of that increase came from two windfalls. Take those away, and the General Fund grew 3.4 percent compared to the same period a year earlier.

"Our state's economy is showing growth, but it's moderate," said Bill Newton, assistant state finance director.

That's where Canfield comes in. ADO's mission is to create jobs.

That means building on the successes we've seen in bagging the big manufacturing buffalo industry hunters love to target -- such as Mercedes-Benz, Honda, Hyundai and ThyssenKrupp. But it also means nurturing existing companies in Alabama, large and small, and helping them grow and create jobs. And, it should mean an even sharper focus on attracting and growing knowledge- and idea-based industries. Part of that must be ensuring the state does everything it can to bolster the biomedical and high-tech research going on at UAB and in Huntsville.

Finding ways to help grow research jobs should be a priority. Those jobs are "clean," pay well and won't leave for the cheaper shores of foreign countries.

Creating new jobs is always important; in a down economy with tens of thousands more people out of work and tax collections slumping, it is even more critical.

Canfield as a lawmaker was the driving force behind fixing the way the Legislature writes the school budget with his rolling reserve act. As ADO director, he must be the driving force behind fixing the school and General Fund budgets by growing jobs and tax revenue.

Best of luck to Canfield in getting the economy rolling.

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