SUMMARY: The Bentley campaign said that they have “anecdotal evidence” that the program has already produced jobs, but concrete results will not be known until the companies file tax returns for 2011. However, the estimate of 5,000 jobs stems from the 2007 Work Opportunities Tax Credit Bill, on which Bentley’s bill was modeled, that created 4,600 jobs in this state.
ANALYSIS: Throughout his campaign, Dr. Robert Bentley has said the Reemployment Act of 2010, which was passed unanimously by the state legislature in April, will create 5,000 new jobs by giving employers tax incentives to hire people who are currently unemployed. Bentley introduced the legislation as a state representative from Tuscaloosa.
Under the act, employers can deduct 50 percent of a qualified employee’s annual salary from the business’ state income taxes. The individual must be drawing unemployment benefits at the time they are hired, or have unemployment benefits that are expired, and they must remain employed for 12 months.
And while the campaign has had employers call to enquire about how to apply for the tax credit, the actual number of jobs created will not be known until employers file tax returns in 2011.
“We know that there are people being hired because of anecdotal evidence, but we won’t know a specific number until next year when companies file their taxes and take advantage of the tax credit,” said Angi Smith, Bentley‘s campaign manager.
The estimate of 5,000 jobs is based on results from the 2007 Work Opportunities Tax Credit Bill, Bentley said during the debate at the University of Alabama. The program created about 4,600 jobs in the state during the year after it was passed, said Smith. The federal program provided tax incentives for hiring people from particular portions of the population, such as veterans, food stamp recipients, ex-felons and disconnected youth.
“According to the State Department of Industrial Relations, there were 4,640 certificates issued for employees hired in Alabama that qualified for this credit in 2008,” Bentley says in his jobs plan.
Tara Hutchinson, public information officer with the Alabama Department of Industrial Relations, the agency that handles WOTC funding, said Alabama processes between 3,500 and 5,000 requests each month.
However, she could not say for certain how many jobs were actually created by the federal program and how many employers were planning to hire workers and simply chose to hire those covered by WOTC funding. The program has been available since 2007, and Bentley’s estimates are based on numbers form 2008.
The federal credit covers 25 percent of qualified first-year wages for those employed at least 120 hours and 40 percent for those employed 400 hours or more. The qualified wages depend on the population group that the employees belong to.
In August, the state unemployment rate fell to 9.4 percent, down from 10.3 percent in April 2010 when the bill was passed.
Links for Online information
Work Opportunity Tax Credit:
http://www.doleta.gov/business/incentives/opptax/
Bentley Jobs plan:
http://www.robertbentley2010.com/uploads/Jobs_Plan.pdf
