My Role: This story was my first data-dive in an internship setting. I was tasked with going through multiple annual state revenue reports in order to cross reference how the state is doing in terms of business growth. I was able to speak with Greg Cochran, executive director of the Alabama League of Municipalities and he gave me insight regarding federal funding has helped bring new businesses to the state. I got a differing opinion from Rosemary Elebash the Alabama director for the National Federation of Independent Businesses. In this story I was able to give varying viewpoints then come up with a conclusion that the reader can make an educated decision on the business environment in the state.
In 2023, 260,974 business licenses were issued in Alabama, a nearly 15% increase from 2020 when 227,343 were issued during the COVID-19 pandemic, according to the Alabama Department of Revenue.
In 2019, 235,426 licenses were issued.
Still, many small businesses in the state are struggling to stay afloat as they deal with higher costs and a continued shortage of labor, advocates say.
Greg Cochran, executive director of the Alabama League of Municipalities, said the infusion of billions of dollars in federal aid over three years during the pandemic helped spur new businesses.
“(That) impacted our economy in the state of Alabama and because of that, yes, we’ve seen a surplus in business license activity,” Cochran said. In 2020, the league was helping Alabama cities monitor their losses related to the pandemic, including a decline in tax revenues related to shuttered businesses.
“Through The American Rescue Plan Act and through the COVID relief efforts that went into businesses and individuals certainly put more dollars into play in our economy,” Cochran said.
Meanwhile, corporate income tax receipts were up 7.65% from fiscal 2022 to 2023 to almost $1.4 billion.
“(The state) has continued to implement policies and laws that have been very business friendly in moving our business community forward, to the point where we have a shortage of workers,” Cochran said. “I think that speaks columns about what we’ve done – both at the state and local levels – of creating friendly environments to create jobs.”
While more business licenses is a positive, Rosemary Elebash, Alabama director for the National Federation of Independent Businesses, pointed to another statistic from recent years: net gains.
According to the U.S. Small Business Administration’s Office of Advocacy, 2022 was the first year since the pandemic that total establishments trended upward, netting 5,516. The two years prior carried a net loss of 618.
Small businesses employ about 46% of the state’s workforce, but many are still struggling, Elebash said.
“Inflation is so high, and we can’t find enough employees. So businesses, a lot of them have changed their business hours because they don’t have any coverage,” Elebash said. “So what they’ve done is they look at their lowest producing day. They may close that day, just because they can’t cover or they shorten their hours of when they’re open. That reduces their income, plus inflation."
“So maybe they don’t have their income prior to COVID. They haven’t caught back up because of inflation.”
Lt. Gov. Will Ainsworth recently discussed his proposals to train more potential workers and increase workforce participation.
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