Alabama’s economic development history is full of high-profile deals that cost state residents hundreds of millions yearly. Despite 18 recorded megadeals and over $4 billion in subsidies, Alabama’s remarkable tax giveaways have not brought the state broad prosperity, with consistently high poverty rates and a regressive tax structure that means poorer residents pay a higher portion of their income of basic living expenses. All the while, automakers such as Toyota-Mazda and Hyundai enjoy Alabama’s lavish subsidies, as do other manufacturing industries such as steel 

Alabama offers a diverse array of subsidies that reduce or eliminate almost all major business taxes. Those tax-based subsidies replaced Alabama’s previous practice of using industrial revenue bonds to help companies finance new projects. Still, a good feature in the state’s problematic use of subsidies is that Alabama does not allow school taxes to be abated.  

A mixture of agencies is responsible for running the programs: the Alabama Department of Revenue manages tax-based programs; the Alabama Department of Commerce manages grants and rebates; a division of the Commerce Department, AIED, manages training programs; the Alabama Industrial Development Authority approves development grants, such as those for site preparation. On the local level, secretive Industrial Development Boards have power to abate non-educational property taxes. 

In 2023, Alabama lawmakers passed “The Game Plan,” a package of four incentive laws. Although three of the four create new incentive programs or expand existing ones, the fourth required the state to publish information about incentive agreements on its website. Effectively, at the end of 2023, the Alabama Department of Commerce started to disclose limited data on subsidy recipients for the first time; still many subsidies, including deals done before “The Game Plan”, are hidden from the public view. 

Birmingham, in contrast to the glaring lack of transparency in the state, has a good disclosure under the GASB 77 rule, listing both program costs and naming recipients.  

Alabama also provides limited and fragmented data on how much subsidy programs cost the state. Some data is included under the GASB 77 rule in the state’s Annual Comprehensive Financial Reports, some in the Tax Expenditure Reports, and some in the state budget.  

The state tax-based subsidies are evaluated every four years, but a big drawback is that the evaluations are done by the agencies that administer the programs. The reports are posted to the Alabama Legislature website. Those reports, however, have little value and include mostly aggregate program information. 

Our database tracking corporate misconduct, Violation Tracker, scours 450 federal, state and local agencies in compiling resolved civil and criminal cases against companies. See the list of state agencies from which we collect information in Alabama.

Last updated February 2024.

For more information, contact Kasia Tarczynska at [email protected].