Commerce Secretary Ellen McNair today announced that the Alabama Growth Alliance, a public-private partnership dedicated to advancing the state’s economic priorities, has endorsed the creation of the Alabama Development Fund to provide a source of sustainable funding for economic development without increasing taxes or cutting existing programs.
Secretary McNair said the Alabama Development Fund would allow Alabama to remain competitive by providing new funding for rural development, international business development offices, global marketing, new quality-of-place initiatives and infrastructure improvement programs without impacting the state budget.
The Alabama Growth Alliance, a panel of 15 distinguished leaders from Alabama’s public and private sectors led by Governor Kay Ivey, voted today at a meeting to support the Alabama Development Fund initiative, which requires action by the Alabama Legislature to become activated.
“With the Catalyst strategic economic development plan now in place it is important to identify a sustainable source of new funding to fully implement this bold new strategy,” Secretary McNair said. “The creation of the Alabama Development Fund will represent a creative, responsible solution that doesn’t involve raising taxes or slashing programs.”
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The Alabama Development Fund initiative would generate self-sustaining funding by retaining a small portion of sales and property taxes that are abated in future qualified economic development projects.
These tax collections would slightly reduce incentives extended in these projects while simultaneously generating substantial new resources for Alabama’s strategic economic development efforts with no burden for taxpayers.
“This plan is an investment in the long-term economic prosperity of the state and aligns perfectly with other growth strategies we have adopted to keep Alabama moving forward at a time when competition for job-creating projects is intensifying,” said State Senator April Weaver, a sponsor of legislation that would establish the Alabama Development Fund.
The state Legislature, whose 2025 session started Tuesday, must modify existing abatement laws to enable these tax collections for the initiative to become operational. The Department of Revenue would receive the funds and deposit them directly into the Alabama Development Fund.
The changes would apply only to new economic development projects receiving abatements and would not impact projects that have already received abatements.
“The Alabama Development Fund will allow us to benefit from our successes in economic development by providing reliable funding for new programs that will assist business-recruitment and job-creation efforts across the state,” said State Representative Andy Whitt, another sponsor of the legislation. “It’s essential that we remain competitive in this realm and take the next step to outperform our Southeastern neighbors.”
The Alabama Growth Alliance, chaired by Governor Ivey and co-chaired by Commerce Secretary McNair, adopted its first set of priorities in December 2024. The group was formed under legislation that served as a cornerstone of the Governor’s “Working for Alabama” package of economic growth policies.
This story originally appeared on the Alabama Department of Commerce’s Made in Alabama website.
