Advancing Equity in the Economic Sphere
One of the major responsibilities of any level of government in the United States – whether federal, state and local – is to promote broad-based economic opportunities for every segment of society. As expected, the experiences of these different levels of government in accomplishing this objective, or even striving to achieve it, have yielded varying degrees of success. There have been efforts that have been wildly successful while other efforts have been less so. In many instances, key segments of society have been marginalized, both intentionally and unintentionally, leaving these segments on the outer fringes of economic success.
Even though economic development efforts, particularly state-driven, have focused more on growth than on inclusion, in recent years this focus appears to be widening. A cursory review of the legislative initiatives in the South in 2023 covering the areas of revenue and taxation, climate and the environment, and infrastructure reveal an array of measures designed to achieve specific goals. Some of these goals included enhancing the state’s economic potential, creating jobs, mitigating negative impacts on the climate, generating revenue, strengthening the state’s regulatory apparatus and a host of other objectives. While some of these bills did get enacted, many of them failed to pass the requisite legislative hurdles in their states. At the micro level, among the propulsive motives in presenting these bills is the objective of creating jobs and thereby improving the economic lives of individuals, families and entire communities along with securing the ancillary objectives of raising tax revenues (income, sales and property), augmenting infrastructure systems, raising educational levels, fashioning more livable neighborhoods along with many others. In theory, all these motives have the potential to expand economic prosperity and bridge the equity gap in distressed communities.
Three broad trends emerged from the 2023 Southern legislative sessions:
- Fostering economic development, an objective that encompasses tax credits, workforce development and innovation at Historically Black Colleges and Universities (HBCUs);
- Promoting renewable energy; and
- Enhancing broadband access in both the rural and non-rural areas.
It should be mentioned that all these measures have the potential to significantly expand the economic potential of individuals, families and communities and thereby serve to diminish the equity chasm in many communities across the South.
Fostering Economic Development
One of the key ways states remain competitive in attracting both large and small economic development projects is by offering incentives through tax credits. This includes promoting development in blighted communities, a measure that has the potential to reduce the equity gap in America. A number of states this year (Alabama, Louisiana, Kentucky and West Virginia) sought to retain their competitiveness by bolstering their economic development funds to carry out this objective. It must be noted that only Alabama was successful in enacting legislation to that effect, as detailed below:
- AL HB 241 (and companion bill AL SB 164 – enacted) – Extends the Alabama Jobs Act economic development programs through July 31, 2028, ensuring economic growth, workforce development, and job creation
- Why it’s important: Renewing economic development incentives so that they can continue to serve as reliable tools for job creation is an important step to ensure a focus on economic and workforce development efforts.
Economic development professionals often cite a state’s workforce development capabilities as a key factor in the calculations made by companies on locating in a particular state. This year, there were a number of states that pursued efforts to improve their workforce training capacities, including Alabama, Georgia, Mississippi and Kentucky.
In this connection, the Georgia Quick Start program is a nationally-renowned program that has to be highlighted. This is a flagship program within the Technical College System of Georgia that works in collaboration with the Georgia Department of Economic Development. The Georgia program, which has been consistently ranked the best workforce development program in the country, provides nonfinancial incentives for companies looking to locate their operations in Georgia through tailored workforce development services. At this point, more than one million workers have updated their skills through the program. Among this program’s latest development is the Georgia Advanced Manufacturing Training Center, a 50,000-square-foot, well-equipped facility with computer labs and equipment to help workers become more proficient in such areas as mechatronics, control systems, automation, robotics, and networked wireless systems. The success of the Georgia program has inspired similar efforts in Virginia, South Carolina, Louisiana and Alabama, which are now ranked very high nationally.
Finally, though unsuccessful, promoting entrepreneurship at HBCUs surfaced in Georgia as an economic development tool through Georgia Senate Bill 235. A key strategy here is for HBCUs to leverage the $2.7 billion in funding to states provided in the 2021 American Rescue Plan. This funding level is an unprecedented number and provides abundant opportunities for promoting entrepreneurship at HBCUs. Legislators in Southern states should continue to find ways to invest in these institutions, not only in the manner of innovative programs but also in an effort to reinvestment decades of funding that has been systemically withheld from these institutions, leading to financial instability, outdated and inadequate infrastructure, limited access to resources to retain top faculty and researchers, and ultimately – economic and racial inequity. 85 of the 107 HBCUs in this country are located in the South. Recognizing the value of HBCUs in promoting educational access, diversity, and equity is crucial for ensuring their continued success and the empowerment of African American communities.
Promoting Renewable Energy
Researchers point to the fact that renewables are now expected to overtake coal by 2025 as the world’s largest source of electricity. The booming renewable energy focus in the South continues and this was reflected in a number of legislative initiatives in the Southern states this year.
Several states presented bills related to renewable energy in 2023. A few examples are below. As with all of the other issue areas presented in this report, the success of these measures is varied.
Enacted into Law
- Tennessee SB 1389 – Provides incentives to use certain types of renewable energy sources
Failed to Advance
- North Carolina HB 720 – Establish goal of 100% clean energy by 2050
- Why it’s important: Establishing a goal of clean energy, amid other reasons, mitigates climate change, improves air quality, enhances energy security, and stimulates economic growth. It is a multifaceted approach that addresses economic, environmental, and health concerns, and a crucial step in combating climate change, fostering sustainable development, and ensuring a better future for current and future generations.
- Virginia SB 1333 – To create solar and energy efficiency projects for low-income and moderate-income Virginians
- Why it’s important: In addition to being socially responsible as well as economically and environmentally beneficial, these types of projects are essential for addressing energy poverty, promoting environmental justice, reducing greenhouse gas emissions, and improving the overall wellbeing of vulnerable communities.
From Tennessee (incentives to use certain types of renewable energy sources) to Louisiana (tax exemptions for farmers acquiring solar energy) to Georgia (incentives for homeowners to own solar energy devices) to Mississippi (encouraging non-utility companies to set up electric vehicle charging facilities) to West Virginia (providing for solar energy production on formerly mined land), there were a surfeit of bills that were presented. While some of these measures were successful, others were not.
The assortment of bills presented in the different Southern state legislatures builds on the decades-long focus in the region on expanding renewable energy sources. For instance, Greenville, South Carolina, for nearly a decade now, has been a national leader in the area of wind energy innovation. As a result, GE located its wind turbine manufacturing facility in Greenville some years ago and has continued to expand production at the location. Research in the wind turbine area occurs at nearby Clemson University’s wind turbine drivetrain test facility, the Dominion Energy Innovation Center.
The solar panel production sector has been a stronghold of the region for over two decades now and more recently, REC Silicon announced an agreement with Mississippi Solar to develop a low-carbon U.S. based solar supply chain from raw materials to fully assembled modules. Along those lines, in spring 2023, in northwest Georgia, an agreement between Qcells, which is currently undergoing a $2.5 billion expansion at its Dalton, Georgia factories, and Virginia-based Summit Ridge Energy will see the assemblage of more than 2.5 million solar panels to provide 1.2 gigawatts of energy to power an estimated 140,000 homes and business.
Another area of great interest in the renewable energy sector is hydrogen. Springing from this interest is a public-private partnership across six Southern states (Alabama, Georgia, Kentucky, North Carolina, South Carolina and Tennessee) to create the Southeast Hydrogen Hub. These six states and a variety of utility companies in the region aim to develop an infrastructure network of projects across these states to form the basis for hydrogen infrastructure, a measure expected to generate significant job growth, economic development, a clean energy source along with positive climate mitigation.
Along those lines is the impressive array of electric vehicle manufacturing facilities that have either launched operations or expect to in a number of Southern states. Almost every vehicle manufacturer has announced an electric vehicle line and replicating the trend with internal combustion engines, many of these facilities are located in the South. Georgia is an industry leader here with a number of electric vehicle manufacturing facilities in the works, including the Hyundai Motor Group in Bryan County and Rivian (a $5 billion investment with an expected workforce of 7,500 in Morgan and Walton Counties). Hyundai, working in conjunction with LG Energy Solution to manufacture batteries to power its electric cars, announced a total investment of $7.6 billion and an expected direct workforce of 8,500 by 2031. Hyundai envisages manufacturing 300,000 electric vehicles once its manufacturing facility near Savannah is fully operational. A number of electric battery manufacturing facilities have either begun manufacturing or will do shortly in a number of Southern states, ranging from Georgia to North Carolina to Kentucky to South Carolina. These are all multi-billion investments expected to employ tens of thousands of employees.
While many of these renewable energy efforts were in place for some years, they received a considerable boost from the Inflation Reduction Act (IRA) signed into law in August 2022, the largest federal investment in clean energy in the history of the United States. This boost was both in terms of financial incentives and the considerable focus of the federal government to move the U.S. economy more proactively towards renewable energy sources. In fact, in nearly 12 months since the IRA was signed into law (August 2022 to July 2023), 272 new clean energy projects totaling $278 billion in new investments creating 170,606 new jobs were announced in 44 states. This included 91 new battery manufacturing sites, 65 either new or expanding electric vehicle manufacturing facilities and a further 84 plans to develop wind and solar manufacturing facilities. The IRA also contains a number of resources to expand the decision-making capacity and expertise of state and local governments around large-scale renewable energy planning, siting, and permitting.
Enhancing Broadband Access
Improving Internet access, both in rural and non-rural settings, continued to be a major consideration during the 2023 legislative sessions in many Southern states. States including Kentucky, Tennessee, Georgia, Florida, Alabama, Texas, Mississippi and Virginia all introduced bills to accomplish this critical goal, a goal with valuable benefits that extend to economic development, education, community development and promoting greater human interaction. Alongside the significant state resources allocated toward this objective, there are many federal resources that states and local governments must leverage to their benefit. Chief among these federal resources is the Broadband Equity Access and Deployment (BEAD) program, a $42.45 billion grant program created in the bipartisan The Infrastructure Investment and Jobs Act (IIJA) signed into law in November 2021. This massive grant program, administered by the U.S. Department of Commerce, will furnish all 50 states, the District of Columbia, and the territories sufficient resources to connect every resident and small business to reliable, affordable high-speed internet by 2030. While the awards range in size from $27 million to over $3.3 billion, every state will receive a minimum of $107 million. While 19 states received allocations of over $1 billion, the 10 states with the highest allocations included several Southern states including Alabama, Georgia, Louisiana, Missouri, North Carolina, Texas, and Virginia. In expectation of this major investment in high-speed internet infrastructure deployment, in March 2023, the fiber optic cable manufacturer Corning announced a combined $500 million expansions at their domestic manufacturing facilities, including at its newest optical cable manufacturing campus in Hickory, North Carolina.
In closing, the 2023 bills proposed in Southern state legislatures contain the potential to improve the economic lives of individuals, families and communities and by extension, the potential to bridge the equity gap so prevalent in this region of the United States. The observations made above seek to link those state legislative initiatives to the broader economic goals being pursued at the federal level. Southern states and cities have the unprecedented opportunity to take advantage of the immense resources made available under multiple federal legislative initiatives – the 2021 American Rescue Plan, the 2022 Infrastructure Investment and Jobs Act, the 2022 Science and CHIPS Act and the 2022 Inflation Reduction Act – and create a 21st century economy that meets the aspirations of a vast number of Americans.
In 2024, legislators should remain steadfast in their commitment to crafting legislation that enhances the economic well-being of the region. To bridge the gap, lawmakers should prioritize policies that promote access to quality education and workforce development programs, ensuring that all residents have the opportunity to acquire valuable skills and secure stable employment.
Moreover, lawmakers should recognize the interconnectedness of economic prosperity and environmental sustainability. Initiatives aimed at improving the economic lives of individuals, families, and communities should also incorporate legislation that protects our climate and environment while promoting clean energy and other green initiatives. This dual focus can create a more resilient and equitable future.
EPU will be focusing on working with policymakers and supporting legislation that, for example, incentivizes the growth of green industries, such as renewable energy, sustainable agriculture, and clean technology, which not only create jobs, but also reduce our carbon footprint. By offering tax incentives, grants, and research funding, policymakers can encourage innovation and investment in environmentally friendly practices. Building resilient, climate-ready infrastructure and updating aging systems with energy-efficient technologies can yield long-term economic and environmental benefits.
An inclusive approach to policy making, which actively seeks input from marginalized communities, advocacy groups, and experts, is essential in developing legislation that integrates economic empowerment and environmental sustainability. EPU looks forward to continuing to engage in meaningful dialogue and considering a diverse range of perspectives, and working with Cohort Four of our Unum Fellows to ensure that policies promote a just transition to a greener, more equitable future for the South and the nation as a whole.