Kentucky Political News Headlines

Thursday, December 20, 2012

Gov. Beshear’s Top 10 Accomplishments of 2012

Governor Beshear released his top accomplishments of 2012 today. Press release below:

Commonwealth of Kentucky
Office of the Governor

Kerri Richardson

Terry Sebastian

Gov. Beshear's Top 10 Accomplishments of 2012
Kentucky earns national recognition for job growth, education improvement

FRANKFORT, Ky. (Dec. 20, 2012) – Nearly 15,000 new and protected jobs in the Commonwealth.  Another practical, balanced budget, with $1.6 billion in reductions since 2008.  Marshalling federal and state resources to help families and communities recover from devastating disasters.  These are just a few of the accomplishments Governor Steve Beshear highlighted in his "Top 10 Accomplishments of 2012" released today.

"I'm proud of the work we have done this year to help our families recover from tough times, from prescription drug abuse to tornadoes," said Gov. Beshear.  "We remain focused on the goals we brought into the administration – to create new jobs and keep them here, to manage taxpayers' money wisely, and to champion initiatives to improve public health, education and workforce development.  We have garnered national accolades for our efforts in these areas, but we aren't working for recognition.  We are working to better the lives of our Kentucky families."

In October, the U.S. Bureau of Labor Statistics ranked Kentucky second in the nation for job growth rate over the past year, with a net increase of 2.6 percent.  That growth is more than double the rate of our nearby competitor states.  From September 2011 to September 2012, 47,000 jobs were created in the Commonwealth.

Kentucky's flexible economic development incentives and friendly business climate continue to attract more new and expanding companies to our state.  2012 was a banner year for job growth made possible by these incentives, with the announcement of 342 projects representing 13,051 prospective new jobs and 1,896 jobs saved. Those critical job-creation projects represent a more than $2.6 billion investment across the Commonwealth. 

Multiple national organizations have recognized Kentucky's prowess in nurturing and supporting businesses, including:

·        The Kauffman Foundation ranked Kentucky as one of the top 10 states for entrepreneurs, tied for the eighth-highest number of new startup companies;
·        CNBC rated Kentucky as the best state for cost of doing business;
·        State Policy Reports ranked Kentucky in the top 15 states for economic momentum;
·        Business Facilities magazine named the partnership between the Commonwealth and Ford Motor Co. as its national Economic Development Deal of the Year;
·        Trade and Industry magazine ranked the Ford Motor Company investment in Kentucky as one of the top 15 corporate projects in the U.S.;
·        Area Development magazine recognized Kentucky with a Silver Shovel Award, given to states which are the most successful in creating jobs and securing investments in new and expanding facilities; and
·        Southern Business and Development magazine named Governor Beshear its 2012 Person of the Year, based on his strong pursuit of economic opportunity for the state.

Major jobs announcements in 2012 include:

·        Anchor Packaging in Mount Vernon - $7.6 million investment, 150 jobs
·        Elovations Services Group in Erlanger - $13.7 million investment, 696 jobs
·        David Brown in Inez - $4.7 million investment, 24 jobs
·        iwis in Murray - $12.5 million investment, 75 jobs
·        Modern Transmission Development in Leitchfield - $3.7 million investment, 61 jobs
·        American Fuji Seal in Bardstown - $10 million investment, 45 jobs
·        Big Ass Fans in Lexington - $8 million investment, 150 jobs
·        Teletech Services Corporation in Hopkinsville - $12 million investment, 700 jobs
· in Winchester - $20.7 million investment, 550 full-time, 600 seasonal jobs
·        CafePress Inc. in Louisville - $16.5 million investment, 592 jobs
·        Transcraft Corp. in Cadiz - $3 million, 80 jobs
·        Bluegrass Shavings in Liberty - $2.4 million investment, 50 jobs
·        GE in Louisville - $250 investment, 600 jobs
·        Plaza Recovery in Covington - $2.5 million investment, 250 jobs
·        Magna Seating in Shepherdsville - $20 million investment, 450 jobs
·        SMC in Nicholasville - $1.9 million investment, 94 jobs
·        Olympic Steel in Mount Sterling - $11.2 million investment, 40 jobs
·        Bingham McCutchen in Lexington - $22.5 million investment, 250 jobs
·        Berry Plastics in Madisonville - $96 million investment, 400 jobs

The state's comprehensive prescription drug law, House Bill 1 (HB1) has been in effect for less than six months but already shows major positive impact in shutting down unlicensed pain clinics, reducing prescriptions of some of the most abused drugs, and accelerating investigations of medical providers with suspicious prescribing habits.

HB1 passed with bipartisan support in a special legislative session this spring.  The bill includes multiple elements to prevent the abuse and diversion of prescription drugs and to enhance law enforcement's tools to investigate illegal prescribing practices.

Since HB1 took effect:
·        20 of the state's known 45 pain management clinics have closed rather than submit to new rules that protect consumers. 
·        The number of medical providers registered to use the state's nationally recognized prescription monitoring program, KASPER, has more than tripled.
·        The number of daily KASPER reports has skyrocketed from less than 3,000 per day to nearly 20,000.
·        Prescriptions for some of the most abused or diverted drugs have dropped compared to a year before (Nov. 2011 to Nov. 2012), including:
o   Hydrocodone – down 16 percent;
o   Oxycodone – down 16 percent;
o   Alprazolam (Xanax) – down 20 percent; and
o   Oxymorphone (Opana) – down 48 percent.

Governor Beshear has joined forces with partners in state and federal government to close loopholes and enact policies to thwart fly-by-night providers and doctor-shoppers who wreak havoc on families and communities through prescription abuse. 

·        Gov. Beshear met with U.S. drug czar Gil Kerlikowske to advise him of Kentucky's multiple efforts to battle prescription drug abuse.
·        This spring, Gov. Beshear spoke at the National Prescription Drug Abuse Summit to call on the federal government and state to develop aggressive shared tactics to fight prescription abuse.
·        In March, Kentucky signed a multistate agreement to share prescription drug dispensing data with at least 20 other states, to provide a more comprehensive database to cut off access to abusers and identify problem prescribers. 
·        Governor Beshear added $6.1 million in new funding in the current budget for substance abuse treatment for Kentuckians enrolled in Medicaid.  That treatment includes individual therapy, group therapy, peer support and intensive case management. The funding will provide treatment for 5,800 adults and teens over the biennium.

The March tornadoes that caused millions in damage and killed two dozen people, mostly in eastern Kentucky, are the 11th federally declared natural disaster of Gov. Beshear's administration.  After those storms, Gov. Beshear visited the disaster areas multiple times, and worked directly with the Federal Emergency Management Agency (FEMA) and state agencies to ensure the affected areas got needed relief assistance immediately.

The tornadoes damaged more than 2,800 homes.  Of those, 810 were destroyed.  FEMA provided $24.5 million for repair projects, and $10.2 million for individual assistance grants.

Gov. Beshear also accelerated state assistance to areas like West Liberty and Morgan County.  State agencies set up temporary offices in damaged areas within hours of the storm. The Governor directed long-term assistance as well, including providing funding for highway reconstruction and downtown redesign and rebuilding.

The summer brought scorching drought that affected nearly every Kentucky county.  Eventually, all but 3 of Kentucky's 120 counties were classified as drought disaster areas by the U.S. Agriculture Secretary.  Gov. Beshear worked with the state and federal partners to make sure farm families had access to relief assistance.

By working across party lines with other governors, accelerating construction timelines and promoting competition among contractors, Gov. Beshear has ensured that Kentucky's critical transportation arteries are under construction faster than anticipated.  Moving quickly to build or repair these bridges will save tens of millions through increased competition and compressed timelines, and creates safer, more reliable transportation for Kentuckians.

·        Gov. Beshear joined Gov. Mitch Daniels of Indiana in August to break ground on the first construction phase of the Ohio River Bridges Project, which will build two new spans across the Ohio River in Louisville.  The governors, working together, identified practical solutions to cut costs to an attainable level. They also split the project, giving Kentucky authority over the downtown bridge and Indiana responsibility for the eastern span. Their combined efforts dropped project costs 40 percent from original estimates.  In November, the Kentucky Transportation Cabinet awarded the contract for construction of the downtown Louisville bridge to Walsh Construction Inc.  The contract is $90 million under estimate and the bridge is expected to be finished nearly 19 months ahead of schedule.
·        The Sherman-Minton Bridge in Louisville returned to service ahead of schedule following emergency closure in September 2011 after a suspicious crack was found during a routine inspection.  Kentucky and Indiana worked hand-in-hand to redirect traffic and expedite the repair, which was completed in February.
·        In December, Gov. Beshear joined Ohio Governor John Kasich to sign an agreement to begin the formal process for planning and building a new span alongside the Brent Spence Bridge in Covington.  The current bridge carries the entire load of both Interstate 71 and I-75 as well as local traffic.  It is classified as "functionally obsolete" because of its narrow lanes, absence of emergency shoulders and limited visibility on the lower deck.  A construction contract is could be awarded by 2014.
·        Govs. Beshear and Kasich also broke ground on another Ohio River bridge, this one spanning Ironton, Ohio, and Russell, Ky.  The Ironton-Russell Bridge is 90 years old and will be demolished after the new bridge is completed in fall 2015.
·        The Eggners Ferry Bridge, which carries U.S. 68/KY 80 across Kentucky Lake, opened to traffic 2½ days earlier than expected after emergency repairs.  The bridge was severed Jan. 26, when a cargo ship, the Delta Mariner, struck the bridge and tore away a 322-foot span.  The bridge was repaired before Memorial Day weekend, saving the summer tourism season in the Lakes Region of Western Kentucky.
·        A new U.S. 60 Tennessee River Bridge between Paducah and Ledbetter may open more than a year ahead of schedule, thanks to an aggressive construction timetable.   The Ledbetter bridge is scheduled to open by Oct. 31, 2013 – instead of an original target of July 2014.

Gov. Beshear takes his message of Kentucky's business-friendly climate and strong workforce directly to job-creators across the globe, and 2012 offered outstanding results.  Kentucky is home to approximately 420 foreign-owned companies from 30 nations, employing more than 77,000 people, and the Governor continues to pursue more.  Nearly 35 percent of all capital investment and almost 20 percent of all jobs announced in 2012 were a result of foreign-owned enterprises.

·        Germany – after the Governor's trip in July, two German-owned automotive suppliers announced plans to invest and hire in Kentucky. Webasto Sunroof Systems announced plans to invest $10 million and add 65 jobs in Lexington, and iwis, which manufactures timing drive systems for engines, will establish its first U.S. manufacturing operation in Murray. The iwis project will create 75 new, full-time jobs and entail a more than $12.5 million investment in the Commonwealth.
·        France – after the Governor's visit to global cosmetics and hair care manufacturer L'Oreal in Paris this summer, the company announced plans to invest more than $42 million and add more than 200 new jobs in Florence.
·        Japan and Taiwan – Shortly after returning from a successful economic development trip to Asia, Gov. Beshear joined Taica North America Corp. officials to announce the company's plans to locate a manufacturing facility in Winchester. The Japanese investment will create 30 new full-time jobs over the next several years and entail a more than $8 million investment by the company. Kentucky has the second-highest per capita rate of direct investment from Japan in the country – trailing only Hawaii.
·        India – Gov. Beshear traveled to India in September, his third trip to the world's second most-populated nation.  India-based Flex Films announced $180 million in investment and 250 new jobs in Elizabethtown after his first trip.

Other countries are also making direct investments in the state.  China-owned Birtley announced in September it will invest $10 million and create 30 to 50 new, full-time jobs in Lexington.  The announcement marks the first Chinese-owned manufacturer in Kentucky.

Kentucky's ranking in an annual grading of all states on key education indicators jumped 20 spots in 2012, placing the state 14th in the nation for its work on academic standards, the teaching profession and many other variables related to public education.
The annual ranking by national publication Education Week is found in a special issue, "Quality Counts." The report tracks key education indicators and grades states on their policy efforts and outcomes. Last year, Kentucky ranked 34th in the nation in this annual report.
Much of the impetus for Kentucky's high ranking can be traced to 2009's Senate Bill 1, which set Kentucky on a course to become a leader nationwide in school accountability, teacher training, college/career readiness and stronger academic standards.  Kentucky was also the first state to adopt tough Common Core content standards, which set minimum standards for math and language skills.

Gov. Beshear balanced Kentucky's budget for the 11th time since taking office, and has now cut a total of $1.6 billion from state expenditures.  While reductions have been significant in many parts of state government, significant cuts to our priorities of education, critical public safety programs and job creation efforts have been prevented.
Governor Beshear shrank state government to its smallest size in a generation, and continues to find ways to improve government efficiency with fewer taxpayer dollars.
Kentucky's tax system cushioned some of the impact when the nation's economy ran off the tracks in 2008.  But as the state recovers from the recession, Gov. Beshear has begun an effort to make our tax code more fair to taxpayers and our state more attractive to new and existing business. 

Early in 2012, the Governor appointed a broad, bipartisan commission to make sure our state doesn't face another economic crater by failing to update its tax code.  A study of our tax system earlier this summer revealed that without significant changes, Kentucky will face a $1 billion shortfall by 2020. 

The Governor's Blue Ribbon Commission on Tax Reform just submitted its report to the Governor, which includes dozens of recommendations that could create $659 million in additional revenue.  Gov. Beshear will study the report before he meets with legislators to build a consensus on moving forward on changes to our tax code. 

In a move to help produce the skilled workforce businesses require today and in the future, Gov. Beshear signed an executive order in August to overhaul the state's career and technical education (CTE) system.
The order unites the state's two CTE systems under the guidance of Kentucky's Department of Education. The goal is to create a unified, more relevant and efficient system to educate and prepare students for the world of work in a real-life setting.
Today's employers require a workforce that is skilled, adaptable and equipped to compete in the global marketplace. Students need an education system that provides job-training and learning opportunities that will put them on a career pathway. Transforming and elevating CTE is essential to this process.

Gov. Beshear signed House Bill 495, a measure that provides the resources to pay interest owed on the state's federal Unemployment Insurance (UI) loan and that will save Kentucky employers $600 million in federal tax penalties.
The bill is the result of collaborative work by Kentucky employer groups. Since January 2009, Kentucky borrowed more than $960 million from the federal government to continue paying UI benefits to eligible Kentuckians, much like other states had to do. If HB 495 had not been enacted and Kentucky could not make the interest payment due Sept. 30, 2012, employers would lose all of the federal tax credit, and the UI tax payable by employers would rise.
Follow Governor Beshear on Twitter @Govstevebeshear, read the Governor's personal notes on his blog at, and view the Governor's weekly YouTube commentary at

Friday, December 7, 2012

Commission on Tax Reform - FINAL MEETING SUMMARY

Staff Report by Rachel Phelps

The Governor's Blue Ribbon Commission on Tax Reform met for the final time Thursday.  As you know, the Commission has been meeting since late Spring working to make recommendations on changing the state's tax code.  At the end of the day long meeting and with all changes scored, the Commission recommended a package that increases state revenue by nearly $700 million, with over half coming in changes to the individual income tax.

The Commission staff is now putting together the actual report and plans to have a draft copy to all Commission members by December 11th. The final report will be sent to Governor Beshear on December 17th. The Governor will review the report and then make the decision on what he will submit to the General Assembly. He has said he will discuss with leadership in the General Assembly before reaching any final decision.  Governor Beshear could also end up adding to the recommendations or removing some from the package.  He did say yesterday that it would be difficult to address during a short session and that a special session on this and pension reform might be necessary.

As with any tax proposal, the actual language to accomplish the intent will be very important and none of that has been drafted to date to our knowledge.  What is listed in the "scorecard" are the recommendations and those will have to be converted to the language in a bill for the General Assembly to consider.

The scorecard is the best document to date that lists what is actually contained in the recommendations.  The only detail missing is the individual income tax.  They are recommending a progressive rate option with the top rate being reduced from 6% to 5.8% and the second highest rate from 5.8% to 5.5%.  Deductions will be capped and retirement income will be taxed for the first time beginning above 30K.  Also, please be aware that the numbers on the score card are not exact and some were changed or tweaked during the meeting yesterday.  The "Throwback" was taken off the table altogether yesterday and the cigarette tax will be roughly 100M and the OTP tax 10.4M after you take out the inventory tax (after the first year) which is included in the numbers on the sheet.

For your convenience here is a snapshot of the changes to the corporate income tax.  We do advise that you review the attached score card as well though. Additionally, take note of applying the sales tax to some services - although the Commission did not set the services that would be taxed, they only used broad categories which had been recommended by the consultants.  The detail of what exact services will be taxed, under this plan, would be included in the bill language, if and when it is introduced.

Corporate Taxes
Single Factor Apportionment - (110 million)
Destination Sourcing - (10 million)
Angel investor Tax Credit - (3 million)
Income tax credits in lieu of barrel tax - (12.6 million)
Decouple QPAI - 4 million
Lower the small business standard on the LLET - 13 million
Eliminate corporate income tax loopholes - 10 million

We will send you the final report when we receive it.  Please don't hesitate to contact us with any questions or concerns you may have.

Senate Chairs

TheSenate Republicans released a list of their 2013-14 Senate Committee Chairmen, and they are as follows:
Agriculture, Hornback
A&R, Leeper -  Sen. Givens will Vice-Chair A&R
Banking & Insurance, Buford
Econ Development, Kerr
Education, Wilson
Health & Welfare, Denton
Judiciary, Westerfield
L&O, Schickel
Natural Resources, Carpenter
State & Local Government, Bowen
Transportation, Harris
Veterans, Higdon. with Sen. Leeper.

Statutory Committees:
Administrative Regulation Review Subcommittee, Bowen
Capital Planning Advisory Board, Humphries
Capital Projects and Bond Oversight, Girdler
Education Assessment & Accountability Review, Wilson
Government Contract Review, Gregory
Medicaid Oversight & Advisory, Givens
Program Review & Investigations, McDaniel
Tobacco Settlement Agreement Fund Oversight, Hornback

This article has more details.