According to Dr. Keivan Deravi, economist and Dean of AUM’s College of Public Policy and Justice, several important and positive things: “There are four basic attributes that can act as catalysts for economic growth of a region. They are proximity to a compressive institution of higher education; access to a major interstate or interstates; access to an international airport; and being a state capital,” he said. “Montgomery has three of the above attributes.”
And of those three, Deravi stressed that being the capital carries the most weight. “Without being the capital, the city would not have enjoyed the growth it has seen,” he said. “It is one of the pillars of our city’s economy, along with the military and the city government.”
Being the capital means the majority of state government functions happen here, and that translates into a massive number of state government jobs as well as millions of dollars in spending thanks to legislators coming here each year, as well as other visitors traveling to the city strictly to interact with state officials and agencies. “State government employment along with its spending and physical footprint, plus the legislators, lobbyists and other visitors’ spending, provides a significant amount of the money spent in the city,” Deravi said. “It’s arguably between 30 to 50 percent of the city’s GDP. As such, the state government’s presence gives the city’s economy depth, diversity and stability.”
And it’s not just the official state jobs. As Deravi noted, as the center of state government, the city also gains thousands of additional jobs in businesses related to state government, things like lobbying firrms and industry associations. Johnny Adams, executive director of the Alabama Poultry & Egg Association and immediate past president of The Alabama Council of Association Executives (an association for those who run associations) pointed to the substantial impact associations alone have on the city. “The state associations based here — and there are many — represent thousands of employees,” he said. “Plus, they have multiple meetings and events here each year that bring in many more people who fill our hotel rooms, eat out in our restaurants, pay lodging and gas taxes and more.” But the city isn’t the only beneficiary of associations’ presence here.
There’s a good reason the majority of them are headquartered in Montgomery, as Adams explained. “Until 1994, the Poultry & Egg Association was based in Cullman; we were one of the few not based here,” he said. “When we came here, it was like opening a door to a whole new world. Our access to state leaders, lawmakers and agencies was so much broader and easier. We were finally sitting at the table. It would be hard to imagine being truly effective without being here.”
Jeremy Arthur, president of the Chamber of Commerce Association of Alabama, which represents 120 chambers of commerce around the state, agreed with Deravi and Adams, noting that the key effects from state government are the larger than average public sector workforce, which adds a layer of stability, as well as the many state associations, trade groups and government advocacy groups that locate here. He also highlighted other perks. “We have federal offices here that wouldn’t be if we weren’t a state capital,” he said. “And all the positives that the city enjoys spill over into surrounding River Region communities, so the impact is bigger than Montgomery.”
Hal Bloom, founder of The Bloom Group, a governmental relations firm, has been deeply involved in politics in Montgomery since 1975 and outlined a few intangible upshots. “The state government brings some diverse people here, from all over the state and from other places, and they bring ideas and different voices here,” he said. “That’s always a good thing. They add to the culture of our community. And from an economic development standpoint, our mayor can go right down the street and do face- to-face with the governor or other state leaders; that’s good too.”
MAKING OUR VOICE HEARD
These inherent advantages to being a capital city mean a lot to Montgomery, but our city leaders are working to enhance them and to get even more out of our proximity to state government. It’s why the Chamber produces on an annual legislative agenda (see page 28) that outlines the issues and goals it views as most important to the local business community for the coming year.
Whether the Chamber is backing a specific bill or voicing concerns about a concept being debated in the legislature, its leaders work hard to create the agenda and even harder communicating their thoughts to the individual legislators who represent Montgomery in the Alabama House and Senate. Being in the same town with them while they’re actively in session is a definite plus.
There is one potential drawback to how closely the city of Montgomery and state government are situated. When political scandals erupt and when news of unethical behavior from elected officials becomes public, the stench of this corruption can seep into the perceptions that other people in other parts of the state have of Montgomery, especially since some media and just everyday folks sometimes use the words “Montgomery” and “state government” interchangeably, implying that they are the same thing. But most local “politicos” believe that if and when that tarnishes the city’s image, it’s only surface deep. “I’ve heard those generalizations, and it’s something to be aware of that can be a small negative, but I’m not sure if it how much it really alters others’ perceptions of the city and its people,” Arthur said. “I think that most people understand where the blame goes.”
IMPACT OF GOVERNMENT EMPLOYEES & ASSOCIATES ON MONTGOMERY’S ECONOMY
- 140- There are 105 representatives and 35 senators in the Legislature, most of whom travel to Montgomery and stay here on a weekly basis.
- 600- There are approximately 600 lobbyists registered with the state. Many live and work here; the others come here (and spend money here) during the annual legislative session.
Each year, the Chamber compiles a legislative agenda listing specific issues that can affect our area’s business community and then monitors the bills and proposed regulations related to them throughout the legislative session.
HERE ARE THE CHAMBER’S 2018 LEGISLATIVE INITIATIVES
Business & Economic Development:
- Support initiatives that assist existing industry, new business recruitment, cyber and technology growth, and small and minority business development.
- Protect the rights of employee confidentiality and the secret ballot in union elections.
- Support initiatives to enhance Montgomery’s tourism industry and historical significance.
- Support improvement of and funding for transportation infrastructure.
- Support initiatives that support and grow the military and defense missions within the River Region.
- Support incentives for commercial development, particularly those that promote redevelopment of priority corridors and riverfront/downtown, to include cultural district incentives, new market tax incentives and other vehicles that aid in revitalization of priority urban areas.
- Support initiatives that support educational, employment and business opportunities for military families.
- Oppose mandated benefits, restrictions and regulations that unduly impede sound business practices initiatives at all levels.
- Support efforts to seamlessly link Alabama’s workforce initiatives with the Alabama Community College System.
- Foster a pro-business climate in the Montgomery area through sound fiscal policy; monitor tax reforms.
- Advocate adequate funding for public education at all levels to effectively prepare Alabama children and adults for an increasingly complex economy and competitive workforce.
- Advocate for continued expansion of pre-kindergarten educational programs.
- Support reform efforts that improve the quality of classroom instruction through increased technology and broadband initiatives.
- Support efforts that strengthen and expand workforce development policy; monitor tax reform initiatives.
IN THE KNOW
We asked the legislators who represent Montgomery County in the Alabama legislature their thoughts on the main issues affecting business and economic development here and what they’ll be working for in the 2018 legislative session:
SENATOR DICK BREWBAKER
Quality education is key to any successful community, and a solid foundation for education requires beginning the focus at Pre-K and maintaining it through high school and beyond. Education affects our ability to recruit and expand business and industry, our ability to attract and retain talent and our ability to share our storied history by attracting visitors here. With all this in mind, one issue I’ll be watching is education funding.
REPRESENTATIVE CHRIS SELLS
The budgets, both the general fund and education budgets, are the major issues coming up in the 2018 Regular Session. Adequate funding of education is essential for many things, including a prosperous business climate. Education is crucial as we work to continue to grow and develop a workforce pipeline that will allow us to expand and recruit business and industry to our region.
REPRESENTATIVE REED INGRAM
I believe that the budget will be the highest priority during the upcoming session. We have made a lot of progress in working to budget responsibly and ensuring we are living within our means. We will continue that work in the next regular session. Additionally, I would like to see us find a way to fund more state troopers to preserve the safety of our roadways.
REPRESENTATIVE JOHN KNIGHT
I believe our state’s public education system is one of the most important contributors to the success of any plans for business or economic development. A strong, capable workforce is key. When recruiting new industry, the River Region must demonstrate that it has a strong educational system, from the primary stage through higher education. As legislators, we must find ways to more effectively support and fund public education as a tool for economic development. We must also evaluate the impact of our current workforce development initiatives and identify opportunities to strengthen these programs.
REPRESENTATIVE THAD MCCLAMMY
Landing the Air Force’s Lockheed Martin F-35 Lightning II jet program will have a great, long-lasting impact on our area. Alabama is an established leader in aerospace and aviation; today, Air University at Maxwell and the Business and Enterprise System Directorate at Gunter are the heart of the Air Force information technology network worldwide. The success of our efforts to get the F-35 here also allows us to continue the trailblazing Red Tail legacy that the Tuskegee Airmen began in Montgomery. The announcement is wonderful news, and we now have work to do to get ready for the planes’ arrival. I’ll be focused on what is needed for that in the coming year.
REPRESENTATIVE KELVIN J LAWRENCE
As we approach the beginning of a new legislative session, education will be a very important issue. Parents and families want to put their children on the right track for success in school, work and life. That path starts with a first-class education. We must reverse the chronic pattern of underinvestment in our schools, students, teachers and classroom technology. By investing in our public schools now, we can rebuild our skilled workforce and lay the foundation to drive economic growth and development that would strengthen the business community.