Community Renewal Good Stories - Southern Alabama

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Hospital Turns to RC Tax Incentives To Offer Employees Childcare

Southern Alabama, RC

Because rural Alabama hospitals often struggle to make ends meet, funding services outside their primary mission-such as childcare for employees-may not be possible. Such was the case at Georgiana Regional Hospital, a facility the Alabama Hospital Association could have been describing when it reported that rural hospitals, especially those assisting low-income residents, often "operate in a marginally self-sufficient state."

Located in downtown Georgiana on the southern fringe of the RC, the hospital serves three counties inside and three counties outside the RC's border. Medical services are spread thinly throughout the area as several counties have neither the population nor finances to support a hospital.

Prior to the area's RC designation, says Hospital Administrator Harry Cole, "We wanted to build a daycare center for our employees but could not justify it because the revenue stream would not support it. However, through a combination of Renewal Community Federal wage tax credits and the accelerated depreciation provisions of the Renewal Community program, it is now financially feasible for the hospital to proceed with the capital investment to build the daycare center." The daycare center was designed to accommodate approximately 30 to 40 students.

In 2002 Georgiana Regional Hospital had approximately 105 full- and part-time employees. About half of them lived in the RC. "This resulted in an annual, after-tax wage savings of $50,000 to $60,000 annually thanks to the Renewal Community program's wage tax credit provisions," says Cole. The hospital is planning an additional capital investment. As a result of tax savings from several RC tax incentives, Georgiana Hospital began construction of the daycare center in 2003.

For more information on the programs of the Southern Alabama RC, contact Beatrice Forniss of the Alabama Department of Economic and Community Affairs at (334) 242-5464.