Well after the nation's official recovery from the Great Recession began, Alabama continued to feel the downturn's lingering effects in 2010: lower median household incomes, more poverty and more residents without health insurance. Unemployment has fallen from its 2009 peak, but the state's jobless rate remains above the national average. Higher poverty, fueled by lower incomes and stubbornly high unemployment, hit the state's youngest residents especially hard, with one in four Alabama children living below the poverty line in 2009-10.
Like this summer's BP oil disaster, the Great Recession started for many Alabamians as something far away and impersonal. Then the disaster hit Alabama, and it hit hard. The resulting devastation was far-reaching, with scars that could last for decades even as things begin to return to normal.
Boosting the spending power of workers struggling to get by played a crucial role in stemming Alabama's economic decline, according to a new report on the American Recovery and Reinvestment Act of 2009 (ARRA) from Arise Citizens' Policy Project. The report, titled Cushioning the Blow: ARRA's Direct Assistance to Alabama's Working Families, finds that by late May 2010, the act's five major forms of cash assistance had provided a total of more than $2.1 million to Alabama's economy.
The economic recession took longer to crash the party in Alabama than in many other states. But once it did arrive in late 2008, it made its presence known swiftly and severely. Alabama once boasted a far lower unemployment rate than the national average. Now it has one of the highest. Despite a decade of solid growth in the state's productivity, the shares of Alabamians who live in poverty or lack health insurance have shown no appreciable declines in this decade. And the state's workers face broader challenges in their efforts to climb the economic ladder, such as soaring college tuition costs and a regressive tax system.
When ACPP and VOICES for Alabama's Children published The Alabama Tax & Budget Handbook in 2005, The Montgomery Advertiser called it "surely one of the finest examples of public service in Alabama history." The following year, the Alabama Legislature raised the state income tax threshold from $4,600 to $12,600 for a family of four. The insert linked below explains the 2006 changes. Though the budget figures cited in the handbook are no longer current, the description of how the state budgets work remains accurate.