Economy

J. Tyler Franklin, WFPL

Despite a strong showing during the first 10 months of the year, tax revenue was down last month in Kentucky, dashing hopes of a sizable surplus at the end of the fiscal year on June 30.

State revenues are still expected to have grown by 3.9 percent over the fiscal year, slightly above the rate the state estimated and budgeted for of 3.2 percent.

“Monthly revenue collections were hampered by declines in several accounts, some expected and some not,” state budget director John Chilton said in a news release.

Some of those “expected” declines include revenues from taxes on insurance premiums, limited liability entities and coal. Coal severance receipts have fallen every month this fiscal year, with a total decline of 32.2 percent.

Creative Commons

The U.S Department of Labor has funded a grant worth $3.4 million to help retrain out-of-work coal miners in Kentucky.

Shuttering coal mines have left thousands of miners in the state without a job, many of them in eastern Kentucky.

The Department of Labor says in a release the supplemental funding of the National Dislocated Worker Grant provides re-employment services and training for nearly 800 workers in Kentucky .

The recent additional funding brings the program to a total of more than $17 million since 2013, serving a total of 3,200 dislocated workers.

The services are provided by the Eastern Kentucky Concentrated Employment Program, based in Hazard. The program serves 23 Appalachian counties in Kentucky.

Flickr/Creative Commons/Chris Yunker

Economists with the Federal Reserve Bank of St. Louis say the nation continues a modest recovery from the Great Recession.  The group held a regional economic briefing Thursday at Western Kentucky University. 

Economists says slow is the new normal for growth in the gross domestic product.  Kevin Kliesen is a business economist and research officer at the Fed.

"You have very strong job growth," Kliesen stated.  "The unemployment rate is low, somewhere around the natural rate of employment.  Wage growth is picking up and consumer spending still looks pretty good."

The nation has seen brisk auto sales, solid gains in construction, and stronger growth in the services sector of the economy.  However, two areas remain disappointing.  Labor productivity growth is weak, and business capital spending has been soft. 

Still, in the near-term outlook, the economy is expected to grow by around two percent this year.  While modest increases are likely, long-term interest rates are expected to remain at historically low levels.

Gabe Bullard

Kentucky regulators are looking for proposals to spur economic development on Appalachia’s abandoned surface mines.

Two state cabinets — the Cabinet of Economic Development and the Energy and Environment Cabinet — announced the pilot program Monday. It’s funded by the massive spending bill passed by Congress last year that sent $90 million to Abandoned Mine Lands programs in the region. Kentucky’s share of that money is $30 million.

The bill’s language requires the money to go toward projects that reclaim abandoned mine lands and create economic and community development. Additional money was included in President Obama’s “Power+ Plan”— a part of his Fiscal Year 2016 budget that addresses economic development in the nation’s coalfields. Obama’s budget hasn’t seen any movement in Congress.

With the $30 million available to Kentucky through the spending bill, state officials say they’re looking for projects that would bring long-term, dramatic growth to Appalachia. State and local governments are the only eligible grant recipients, and projects must be in one of the 54 counties that are in Eastern or Southeastern Kentucky.

Marshal Ray

Southern Kentucky is seeing a huge boost in tourism spending. A new study shows a 10-county region including Barren, Logan, Simpson and Warren Counties had a nearly seven percent increase in tourism receipts last year.

The numbers come from the annual Kentucky Tourism Economic Impact Report released this week.

Telia Butler is a spokeswoman for the Bowling Green Area Convention and Visitors Bureau. She says the spike in regional tourism is due in part to several new Warren County attractions and events.                     

“We’ve got the Mid-South Conference athletic  championships,” says Butler. “They announced their partnership with Bowling Green to host all kinds of their championships with sports at the beginning of 2015 and they’ve been here all year.”

She says new motor sports events also added to the growth in tourism. The first full year of operation for the National Corvette Museum Motorsports Park drew a large number of visitors.

Sam Owens/Getty Images via NPR

All over eastern Kentucky, you see cars and pickup trucks with black license plates proclaiming the owner is a “friend of coal.”

Even though the license plates are all over, it’s getting harder to find actual coal miners here: Fewer than 6,000 remain in the state, where the coal industry is shrinking fast. More than 10,000 coal workers have been laid off since 2008.

Many have had to leave the area to find work, but a few have found employment in other — and sometime unexpected — fields, as businesses are innovating to use former coal workers in new ways.

Rusty Justice’s company is one of these.

“The realization I had was that the coal miner, although we think of him as a person who gets dirty and works with his hands, really coal mines today are very sophisticated, and they use a lot of technology, a lot of robotics,” says Justice, who has worked in the coal industry all his life.

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.

Pages