Q & A
with MIKE HUBBARD
Speaker Vows Friendly Business Environment
By David Zaslawsky
Mike Hubbard (R-Auburn) is the Speaker of the Alabama House of Representatives. He was recently interviewed by Montgomery Business Journal Managing Editor David Zaslawsky.
Montgomery Business Journal: What are your responsibilities as the Speaker of the House?
Hubbard: As the Speaker, I am the presiding officer of the House of Representatives; elected by the membership. It’s very similar to the Congress and House of Representatives, where the members elect a Speaker. I’m third in line in succession to the governor. You have appointment power. There are a number of appointments the Speaker makes, both legislators and non-legislators. For instance, the Speaker makes (appointments) to the ethics commission and other commissions. From a legislative standpoint, the Speaker makes the appointments of all the committee chairs and all of the members of the committees, which is unlike Congress.
MBJ: You must have a lot of lawmakers asking you to be named to their desired committees.
Hubbard: Yes. You approve travel and those kinds of things. I’m the Speaker for all of the House, not just the Republicans. From a partisan standpoint, clearly I’m a Republican – past party chairman; past minority leader – but, now that I am in this role it’s different. My job is to make sure that the flow of legislation moves properly; that we adhere to the rules of the House; and my job as presiding officer is to make sure that it’s done fairly and properly.
MBJ: How difficult and complicated is it to make all of those committee appointments? I would imagine it must be very important who is on which committee.
Hubbard: It is.
MBJ: Doesn’t that dictate what types of bills come out of the committees?
Hubbard: It does. We never had the opportunity to do that before. When I put together the committees it was really the first time. It was quite a chore. It took a lot of time and a lot of thought because you try to play to members’ strengths, their backgrounds, their professions, their interests. You can’t be an expert on everything. One of the first things I learned when I became a legislator is that you learn a little about a lot of different things, but you have to concentrate on one particular area where you become an expert. We had a lot of new members and they all pretty much came from a business background because they’re the people we recruited to run and sought out when we were looking to flip the Legislature – put it in Republican control. By putting the committees together the way I did, we really have a very pro-business House of Representatives and really we have a pro-business Legislature, the Senate included. There is no way to describe the House other than it is conservative and pro-business.
MBJ: How many people do you have on staff?
Hubbard: We have six people on staff. The previous Speaker had four. We have the same payroll, but I changed it up a little bit. He didn’t have a communications director and didn’t have a legal counsel. We have taken on a different role than the previous Speaker – more of policy-oriented. We have taken a real hard stance on and (become) a real active participant in policy and helping to put legislation together. It has been very helpful to have a lawyer who actually works for the Speaker’s office and in return works for the entire membership. Our attorney used to work in the legislative fiscal office so he has a background in that, which helps a lot. He is very knowledgeable about budgets and very helpful to the committee chairmen. I have a constituent relations person and a legislative affairs person, who works with the rules chairman on legislation and works with me on the appointments.
MBJ: What are your top priorities to improve the state’s economy?
Hubbard: Our No. 1 priority (from the) last session – aside from passing all the things that we promised that we would pass during the campaign – is jobs and do whatever we can to make the environment in Alabama as business-friendly as it can possibly be. To incentivize new companies to come here, but even more important is to make it attractive for existing businesses to grow and expand and prosper. The leadership certainly understands of both Houses that nothing happens unless it is done by the private sector. We redistribute what the private sector generates. In order for us to grow, the private sector has to grow and we’re working toward achieving that.
MBJ: How do you achieve that?
Hubbard: One of the things that we heard loud and clear … I put together a Speaker’s Commission on Job Creation last session, which proved to be extremely successful. Instead of us saying as legislators, “we’re going to come up with all the ideas,” – we actually went to the people who do it every day, trying to grow their business; become more efficient; and have to deal with government and tell us, what can we do to help? What are some burdens on you that maybe we can work with and try to eliminate or diffuse? What are some things we can do that would incentivize you to grow and expand? We got great feedback. If you talk to people and ask for advice, they will give you their opinions. Some of them were not workable, (and) some of them were not exactly how they came out but were the genesis of some legislation that we already passed.
MBJ: What were those pieces of legislation?
Hubbard: One was the Made in Alabama jobs bill. We passed it last session and it came from our commission. It went through some transformations, but the idea was, provide a temporary offset of foreign tariffs during the construction process for foreign companies who choose to locate in Alabama. It gives our economic developers locally and at the state level a tool in their toolbox that no other state has. It makes perfect sense. I believe very soon you are going to see an announcement of new jobs being created as a result of that bill.
MBJ: One of the recommendations from that jobs commission was establishing a Small Business Financing Authority. In the final report it states if there were a one-time, $5 million appropriation it will enable the state to assist 200-plus small businesses and generate $35 million in private equity and credit in the first year. Sounds like a no-brainer.
Hubbard: One of the problems that a lot of small businesses have – they said, “We don’t have access to capital.” The banks have gotten so tight and federal regulators are putting the handcuffs on the banks to where they are putting people out of business. People with good ideas or who can expand don’t have access to capital.
MBJ: In these days of very tight budgets, is a one-time, $5 million appropriation likely in the 2012 legislative session that starts Feb. 7?
Hubbard: You have to prioritize on what is important and obviously we have to fund state government, but you can take a $5 million investment and get a multiple return from it then you have to look at what is in the best interest of the taxpayer. Right now, there is nothing more important than creating jobs. I think the majority of the members of the Legislature are going to see that is very important. In the scheme of things, that ($5 million) is not a lot of money. We have to be very careful how we set that up. It’s kind of out-of-the-box thinking. The No. 1 deal that we heard from businesses is, “You guys are killing us with red tape and regulations. You’re making me non-productive because I have to spend time on it; I have to put personnel on it; and we spend so much time on that when it would be better if we were spending our time trying to figure out how to make more money and how to expand and how to grow my business instead of having to comply with all of these crazy regulations.”
We started asking questions: “Why do we have this regulation?” A lot of times we don’t get a good answer. If you can’t justify it then we don’t need to have it. The reg flex bill that we will propose as part of our agenda, I believe it will pass. Before any new regulation can be imposed, we have to do a thorough study to find out what fiscal impact it has on the private sector. It makes perfect sense. As further evidence that we are a pro-business Legislature, that (regulations flexibility bill) is going to be one of our linchpins of our agenda coming up. The end result is to make certain that we don’t burden the private sector with onerous regulations. If you have agencies promulgating rules and regulations and not going through the lawmaking process there is no check and balance and then you can end up with problems.
MBJ: I read about incentives for data processing centers. What is that about?
Hubbard: We have an opportunity to recruit some data processing centers. We have the data to back it up: They have a ripple effect in creating jobs and stimulating the economy. We have an opportunity to recruit those to Alabama. We have the labor; we have the infrastructure. They are a very clean business to bring in. We think it’s a good use of money.
MBJ: What are the incentives to attract data processing centers?
Hubbard: It has the number of jobs spelled out in the bill and what the average salary has to be. These are pretty high-income jobs. It has a ripple effect on other entities. That is a niche and we’ve gotten really good with automobiles; steel industry; and good on bio-tech with Hudson Alpha up in Huntsville and all resources at UAB (University of Alabama-Birmingham). The data centers are another niche that we can really excel in. It doesn’t require a lot of site prep. Again, it’s another tool we can give to our economic developers on the state level and local level; they can use or choose not to use it. We believe very quickly after we pass that we will have a success right away.
MBJ: Have you been contacted by a data processing center telling you if there are incentives they are coming to Alabama?
Hubbard: Yes. We think if we can get companies to look at Alabama – and I’ll tell you they are looking at us now because we have a really good reputation in the State of Alabama as being pro-business; very productive workers; a friendly Legislature now; friendly court system. If we can get people to look at Alabama then it pretty much sells itself. We have a lot to offer in this state. Sometimes if people have never been to Alabama and they have one image – but if you get them here and they look they are never going to leave.
MBJ: Are there any other proposals geared to small businesses? I read where you are recommending a task force to study streamlining and simplifying sales, use and lease taxes.
Hubbard: That is a big deal and will be a big deal for retailers. Right now we require you to pay sales tax on the local level; county level; municipal level; state level. We put together a commission to come back with a plan for us to implement that would consolidate that so you pay once and it gets dispersed out. It makes it so much easier and less expensive on the small business. Right now, it’s expensive just in time that you have to devote to paying your taxes.
MBJ: For small businesses that could mean the business owner spending their time.
Hubbard: It could or somebody who you would rather do something else. If you talk to the retail association, who represents retailers, they are going to say, “We have been wanting that for decades.” That is something we are going to make a reality.
MBJ: You have talked about making “the necessary investments” in the state’s two-year college system to “meet Alabama’s jobless with Alabama jobs.” How much money are you talking about and what type of programs?
Hubbard: Putting it in business terms, I look at it and I know President Pro Tem (Del) Marsh – we have a very close relationship – and we’re on the same page. In business you wouldn’t produce a product that you didn’t talk to your customer to find out if they need it or not. There has to be a communication between industry and business and education to make sure we are producing what they need. It makes common sense. They have done that in Florida, where industry and business have a seat at the table. It makes so much sense on so many fronts and the biggest one is to make sure that when people get out of school they have a job. In the two-year system we shouldn’t continue to put out the same thing we put out 25 years ago. The world has changed and it is changing.
We need to have a direct communication with the business community to tell us what they need now; what they are going to need five years from now; and what they are going to need 10 years from now so that can be implemented in K-12 and the two-year system. Dr. Tom Bice, who is the new superintendent of schools, he gets it. He understands that whole area that there needs to be some collaboration. I’m excited about working with him. I think we are going to have a great relationship between the Legislature and state Department of Education. I look at it from a business standpoint. You don’t put out a product that you don’t have a market for.
MBJ: Or you won’t stay in business very long.
Hubbard: You go out of business. We don’t go out of business, but you keep putting people out there who don’t have jobs. There has to be a connection there between what we’re producing … it has to go to the career tech. That’s another big deal for us to make sure we’re working in concert with the state Department of Education so that the career tech folks are plugged in to what the needs are. It’s hard to guide someone into an area if you don’t understand what’s going on and what the needs are. We have to bring those together and I believe we can do that through the appropriations process and just by working together for a common goal.
MBJ: Communication doesn’t cost anything.
Hubbard: Exactly, communication and working together and making sure everybody has the same plan.
MBJ: Please talk about existing industries vs. recruiting new businesses.
Hubbard: The vast majority of the new jobs, I think 80 percent – are going to be created by existing industries. We can’t lose sight and the new businesses and the big announcements – they are sexy. The ones you can bring in 500 jobs, but it’s a fact that the vast majority of new jobs are going to be created by existing industries. We can’t forget that. We can’t provide incentives at the expense of existing industries. We also have to understand that these folks have been good corporate citizens for a long time and they have been creating jobs for a long time. We have to be very mindful of existing industries and make sure that we are being fair to existing industries at the same time we’re being proactive in recruiting new industries to come. •