Economy

ArkEncounter.com

The state is giving approval to $18 million in tax incentives for a Noah’s Ark theme park in Grant County.

The Courier-Journal reports the Kentucky Tourism Development Finance Authority approved the incentives Monday for the controversial park run by the Christian ministry Answers in Genesis.

The state program gives developers of tourism projects the ability to recoup up to 25 percent of the project’s cost.

That money comes from a return of the sales tax visitors pay on admission tickets, food, souvenirs, and other items.

Answers in Genesis filed a federal lawsuit after an official under then-Governor Steve Beshear’s administration rejected the group’s application for the tax incentives. That decision was based in part on the group’s policy of hiring only Christians.

Answers in Genesis runs the Creation Museum in Boone County, and embraces the strict biblical view that the earth is 6,000 years old.

Flickr/Creative Commons/401kcalculator.org

For Kentucky tax filers, the check will be in the mail a little later than usual this year. 

The state Department of Revenue says enhanced security features and fraud analysis tools will delay refund checks.  According to spokeswoman Pamela Trautmer, cyber criminals are often at work during tax season.

"They get a social security number from a taxpayer, then they file a return using that social security number," Trautner explained.  "When the true person goes to file their tax return, they may find out a refund has already been issued to the people committing fraud."

For the 2014 tax year, the state stopped more than $16.5 million in fraudulent refund requests. 

The Revenue Department says electronic filing is still safe and the quickest way for taxpayers to get their refunds. 

E-filers should get their refunds in about three weeks while paper filers can expect to wait six to eight weeks.

Bevin Wants to Downsize Scope of KentuckyWired Project

Feb 6, 2016
Jacob Ryan, WFPL

Republican Gov. Matt Bevin wants to downsize a proposed 3,400-mile fiber optic network meant to make high-speed Internet possible throughout the state.

Bevin told the Saving Our Appalachian Region meeting Friday the project is off track. He said he still supports installing the network in eastern Kentucky.

A group of private businesses borrowed $289 million last year to begin constructing the network. Kentucky  government officials promised to pay the companies about $28 million a year for Internet service, which the companies would then use to pay off the loan.

But a key piece of how Kentucky  planned to pay back the loan has fallen apart. Bevin said Friday he wants to try and renegotiate with Macquarie Capital, the Australian-based investment company that is leading the project.

A new report is offering a snapshot of how Kentucky’s economy has fared since the end of the national recession. 

In a report prepared for the Kentucky Chamber of Commerce, University of Louisville Economics Professor Paul Coomes says the Bluegrass State now has 20,000 jobs above it's pre-recession peak. 

Payrolls in five of the nine economic regions of the state grew by 20 percent or more since 2009. However, payrolls declined in the Mountain region by 13 percent. 

The dwindling coal industry is only partly to blame.  Professor Coomes says the loss of coal jobs is a long-term trend.

"Regardless of coal prices or regulations, mining has shedded jobs even while it added output for 20 or 30 years, and that's because of automation," states Coomes.

While Kentucky added jobs at a slightly slower pace than the national average since the recession, the commonwealth had a better growth rate than all border states, except Tennessee and Indiana.

The bright spot has been in manufacturing, which has seen jobs increase three times the national rate.

Century Aluminum Says It Won't Lay Off Sebree Workers

Dec 18, 2015
Credit Flickr/Creative Commons/Pete Prodoehl

A company official says the Century Aluminum plant in Sebree won't have to cut back production and lay off workers after all.

The company announced last month that it planned to close a production line by Dec. 31 and cut a third of its workforce, but The Gleaner reported on Friday that Century Aluminum President Michael Bless said in a statement the western Kentucky plant will continue to operate at full capacity.

When the closure was announced, Bless said the company was struggling to compete with the low prices of subsidized Chinese aluminum.

Bless now says access to low-cost market power gave the plant a competitive advantage over many other smelters in the U.S. and allowed it to continue operating.

The Sebree plant has about 525 workers.

Kentucky’s unemployment rate fell in September to five percent, down from 5.2 percent from the month before. 

According to the Office of Employment and Training, the state’s jobless rate hasn’t been that low in 14 years.  State Economist Manoj Shanker says Kentucky has outperformed the U.S. average in 13 of the last 14 months. 

"The reason the national average is a little bit higher than ours is because whatever is happening abroad, in Europe and China, is hitting markets in California, New York, and the rest of the east coast," Shanker told WKU Public Radio.  "We've been immune to it, so we've been growing quite steadily since actually April of last year."

Despite the drop in jobless numbers, Kentucky faces the challenge of a shrinking workforce. The state has a higher number of retirement-age individuals than the U.S. average. Last month, Kentucky’s civilian labor force declined by more than 11,000 people compared to the previous month.

Borrowing attitudes are posing a challenge for community banks in Kentucky and across the nation. 

Community bankers recently provided input at town hall meetings hosted by state regulators in 27 states, including Kentucky. 

Charles Vice, commissioner of the Kentucky Department of Financial Institutions, says borrowers are still hesitant to take the risks they were willing to take prior to the recession.

"People are still paying down debt and saving more, and because of that, it doesn't give our banks the lending opportunities that they had in the past," Vice told WKU Public Radio.

Other challenges include the regulatory climate and competition from non-bank sources.

"What banks are telling us is that marketplace lending or peer-to-peer lending is creating a lot of competition for them," added Vice.  "Many banks had stories of neighbors funding loans for other neighbors to buy cars and homes."

The Community Banking in the 21st Century report was released at the third annual Community Banking Research and Policy Conference, hosted Sept. 30-Oct. 1 at the Federal Reserve Bank of St. Louis. 

Vice notes that while community banks control less than 20 percent of total banking assets right now, they make more than 50 percent of the loans to small business and they issue 70 percent of the loans for agricultural production. 

He adds community banks are important especially to small and rural towns where access is limited to large national banks.

Kentucky's Jobless Rate Rises Slightly in July

Aug 21, 2015

Kentucky officials say the state's unemployment rate rose slightly last month but remained below the national rate.

The state Office of Employment and Training said Thursday that last month's seasonally adjusted rate in Kentucky was 5.2 percent. Officials say the preliminary July rate was up from a revised 5.1 percent rate in June but was well below the 6.2 percent statewide rate in July 2014.

The U.S. jobless rate remained at 5.3 percent last month.

Kentucky officials say employment gains were made last month in the government, financial activities, leisure and hospitality and information sectors.

Sectors that had employment declines in July included mining and logging, construction, manufacturing, educational and health services, professional and business services and trade, transportation and utilities.

Economists Project $219 Million Budget Surplus in Kentucky

Aug 14, 2015

State economists have predicted a $219.2 million surplus for the budget year that ends June 30.

The Consensus Forecasting Group made the adjustment after looking at strong trends in individual income and sales tax collections, estimating Kentucky's general fund tax collections will grow by 3.2 percent. But they were less optimistic going forward, projecting growth rates of 2.7 percent and 2.8 percent for the following two fiscal years.

The road fund, meanwhile, is expected to come up $129.3 million short this year, a decrease of 6.4 percent from the previous year. However, the fund should rebound in 2017 with a 3.1 percent growth followed by a 4.1 percent growth in 2018.

All of these numbers are preliminary estimates. The group plans to issue its final budget forecast in December.

iStockPhoto

Kentucky businesses will save about $165 million on federal unemployment taxes after state officials paid off a close to a billion dollar federal loan early.  

Gov Steve Beshear says the Commonwealth has paid off the $972 million federal loan needed to meet unemployment insurance benefit obligations during the Great Recession at least two years ahead of schedule.

The early payoff means employers will see a reduction of $105 per employee.   

Big Rivers Electric Corporation plans to sell wholesale power to Nebraska customers in hopes of cutting costs to current customers.

Big Rivers has lost about two-thirds of its revenue after aluminum smelters in Hawesville and Sebree stopped purchasing power.  Since then, the Kentucky Public Service Commission has twice approved rate increases.

Big Rivers Spokesman Marty Littrel says revenue from Nebraska contracts will help pay a portion of Big River’s fixed operating costs.

“The benefit to west Kentucky is the fact that we have been able to land a deal that we anticipate – we’re not sure, it’s still early – but we think it’s projected to provide our members, which again are the consumers, a $65 million benefit over the life of the agreement," explained Littrel.

Big Rivers has around 114,000 Kentucky customers. The company will begin selling wholesale power to around 11,000 Nebraska customers in 2018.

Report: Poverty Afflicts 1 in 4 Kentucky Youth

Jul 21, 2015

A new report says poverty remains the biggest problem facing Kentucky children, a trend affecting all other aspects of child well-being.

Terry Brooks, executive director of Kentucky Youth Advocates, says the Annie E. Casey Foundation's 2015 KIDS COUNT report shows poverty afflicts one in four Kentucky youngsters. Brooks says reducing poverty is the single most impactful way to improve overall child well-being.

The Lexington Herald-Leader reports the findings generally used figures from 2013.

Brooks says the way to help families build assets include ensuring they have access to responsible lending and financial services, along with providing a more integrated approach to benefits. He says tax reform would also make a difference.

Kentucky has General Fund Surplus, but Road Fund Deficit

Jul 10, 2015

Kentucky taxpayers got good news and bad news on Friday on the state's budget.

The good news is the state finished the fiscal year with a $165.4 million surplus in the general fund. But the bad news is the state's road fund has a $20 million shortfall.

The results were not unexpected. State budget officials had predicted a general fund surplus just two months ago. State officials also predicted a deficit in the road fund after falling gas prices automatically cut the state's gas tax rates. State lawmakers agreed to freeze the gas tax in March, preventing what could have been a larger deficit.

Democratic Governor Steve Beshear said the surplus is a sign that Kentucky's economy continues to grow and is moving in the right direction.

An estimated additional 70,000 Kentuckians would be eligible to receive overtime pay if a new U.S. Department of Labor rule goes into effect.

President Obama this week proposed a rule that would raise the salary threshold for those who can receive overtime from $455 per week to $970 per week. The Department of Labor estimates that if implemented, 4.7 million workers would become eligible for overtime pay if they work more than 40 hours per week.

Kentucky Center for Economic Policy director Jason Bailey said the rule also means employees are less likely to be pressured to work more than 40 hours per week.

“When folks are working beyond that it really strains their ability to take care of family, take care of children, participate in their community, have some rest,” Bailey said.

About 800 state workers in Kentucky will get a raise after Democratic Governor Steve Beshear decided to increase the minimum wage to $10.10 per hour.

The increase affects only workers in the executive branch of state government and will cost taxpayers about $1.6 million. The current minimum wage is $7.25 per hour. Tipped workers in state parks will be paid $4.90 per hour, up from the current $2.19 per hour. Private companies with state service contracts will have to pay its workers at least $10.10 per hour. But that won't take effect until the current contracts come up for renewal.

Beshear said about a third of the affected employees work in state nursing homes caring for military veterans. Most of the other affected workers work in behavioral health centers and state parks.

Pages