North Jefferson News, Gardendale, AL

Business

March 4, 2011

Business AdVise

State budget changes affect north Jefferson County area

COMMENTARY — Now is not the time to blink. You will certainly miss something in the realm of politics and business. The tax code that was created in the 1930s and adopted by states like Alabama is a key element in the papers of late.

Over the past 70 years, the income tax has grown and is now the mainstay of the Education Trust Fund here in our state. Today, according to Steve Flowers (NJN 3/2/11) the state income tax and state sales tax are the primary sources of revenue for education here in Alabama. With our current economic climate that includes an unemployment rate of 9 percent, and some areas with much more, weak sales and income tax collections trigger shortfalls in funding at many levels to include education.  

Our new governor, Bentley, has his hands full for sure, but there are many in Montgomery who are working hard to balance and sustain a reasonable budget. One of Bentley’s key items under the education budget is to keep any state-funded teachers from losing their jobs. He does maintain and ask that they pay more for their health care and pension retirement costs. To quote Gov. Bentley, “We are only asking our teachers to do what virtually everyone else has been forced to do in these tough economic times.” (Birmingham News, 3/2/11).

Also on the table is a proposal to end the state’s deferred retirement program, known as DROP. This program allows eligible public employees to delay retirement for up to five years and then get their retirement benefits from those years in a lump sum. Very interesting. In the private sector where we find a cessation of 401K matching and a reduction of pensions in an effort to save jobs, this does seem mirrored and reasonable. Bentley’s plan does not dispense with this benefit as many companies have had to do, it simply reduces it. Most state employees contribute 5 percent of their checks to pension funding. In the private sector, contributions are as high as 16 percent to a 401K without a pension option. This would go up under this plan to 6 percent in 2012 and to 7.5 percent by 2013. Opponents see this as a pay cut. Proponents see it as a necessary budgetary measure.  

An educated work force is critical for sustained growth and development and thus supporting education is important. Perhaps it will be timely to add this metric to the mix. The measure of output of the school system as a measure of workforce contribution is not a far-fetched notion, and a bottom line concept certainly from a business perspective. Also important, let us measure the ability to retain our educated in this state with viable career options and employment.

House bill 57 and the Education Trust Fund isn’t the only glass ball that our legislators are juggling. Alabama republicans list several items in their “handshake with Alabama” and they do impact business big and small. Look for house bill 60 which would write in to the state constitution the ability to challenge in federal court the participation of Alabama in the healthcare overhaul law. Among other things, the law will require most Americans to have health care coverage or face penalties.  

House bill 64 will be working on a rewrite of the state constitution as well. This bill supports the view that workers would be guaranteed secret ballot when voting whether to unionize.  

Clear support for workforce development and its importance as a key pillar to economic development can be found in the five year plan of Blue Print Birmingham. Driven by the Birmingham Business Alliance, and continued by the newly appointed Director of BBA, Brian Hilson, we look forward to measured and sustained growth for our region. We can look forward to learning more about how Hilson, through his leadership with the Huntsville Chamber of Commerce, participated in the success and growth of the Huntsville/Madison area. We look forward to learning also how he will bring that experience to Birmingham and the surrounding areas to include our north Jefferson Area.

Watching these developments will be key to driving the development of the north Jefferson area. The recent 2010 U.S. Census reports that three cities in the north Jefferson County area had significant increases in population.  Kimberly grew by 50 percent, Fultondale by 27 percent and Gardendale by 19.5 percent. To put that in context, the population of the north Jefferson area is approximately that of the Homewood area. Think about that. Growth is fine, but managed growth with the ability to support and serve is better. Do we have the infrastructure to sustain this growth? Will we have good roads? Will we have strong schools? What will our law enforcement and fire support requirements support require? Pay attention, don’t blink, and keep in the conversation.

Remember to take care of your customers, or someone else will.  

You can find additional readings at http://businessadvise4u.blogspot.com.  Teresa works for Sanofi-Aventis Pharmaceuticals and supports the Fultondale Chamber of Commerce. The Fultondale Chamber will meet March 22 at the Holiday Inn Fultondale with host Barry Copeland of the Birmingham Business Alliance on the topic of Blue Print Birmingham, and the North Jefferson Impact. Please join us by calling 337-1629 or email to visemedical@bellsouth.net.

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