Economy

Rae Hodge/Kentucky Public Radio

Gov. Steve Beshear on Monday announced $1.3 million in grants for an initiative  to create jobs in the depressed coal regions of Eastern Kentucky.

The state plans to use $1 million to fund 52 full-time AmeriCorp positions  to shore up "youth engagement, education success and health and human services over the next year," according to a news release from the governor's office. About $312,000 "will support implementation and technical assistance by a consortium of nine Area Development Districts located in the region."

Beyond that, it's unclear how the money will be administered by the 12-member executive committee of the SOAR, or Shaping Our Appalachian Region, initiative.

Beshear, a Democrat, and U.S. Rep. Hal Rogers, a Republican who represents Eastern Kentucky, unveiled SOAR in December in an attempt to gather ideas for revitalizing the economically devastated coal communities in Eastern Kentucky.

Kentucky’s two U.S. Senators have helped defeat an effort to raise the federal minimum wage.

Republicans Mitch McConnell and Rand Paul joined almost every other GOP Senator Wednesday in voting against a bill that would have boosted the minimum pay level for federal workers to $10.10 an hour by 2016, up from the current rate of $7.25.

Indiana Republican Sen. Dan Coats voted against the bill, with Indiana Democrat Joe Donnelly supporting it.

Overall, the bill received 54 votes in favor and 42 votes against, short of the 60-vote threshold needed to continue.

Tennessee’s Bob Corker was the only Republican to vote in favor of the measure.

The federal minimum wage bill has become a hot campaign topic ahead of the next round of Congressional elections. Democrats have portrayed GOP opposition to a minimum wage increase as proof of Republican disinterest in the working class poor.

Republicans point to a Congressional Budget Office report that found such an increase could cost the economy 500,000 jobs.

Senator Rand Paul says raising the minimum wage would negatively impact job prospects for minorities and children.

The Courier-Journal reports that while speaking Monday night to a group of business owners and officials in Louisville, Sen. Paul said Congress could help the poor and unemployed by cutting corporate and personal income taxes in struggling areas.

The Bowling Green Republican has introduced a bill that would create what he calls “economic freedom zones” in zip codes where at least one-quarter of the residents live at or below the poverty line.

That move comes amid a debate at both the federal and state governmental levels over whether the minimum wage should be hiked. Congress is considering whether to raise the federal minimum wage to $10.10 an hour.

Kentucky House Speaker Greg Stumbo sponsored legislation this year that would have increased the state’s minimum wage to that same level over the course of three years.

Toyota North America is consolidating its corporate headquarters from three locations down to one.  Offices in Erlanger, Kentucky, California and New York will be moving to the Dallas suburb of Plano.

That means about a 1,500 employees from Erlanger will be relocated.  About 300 of those employees will be moving to the manufacturing plant in Georgetown, Kentucky, which will remain open.  But 250 will move to Michigan, the remainder will go to Texas.

In a letter to Governor Steve Beshear, Toyota says the changes will leave about 8,200 Toyota employees in Kentucky.  Beshear calls the move “extremely disappointing”.

Kentucky LRC

The director of one of Kentucky’s leading non-profit economic policy think tanks says the recently-passed state budget fails to address the state’s revenue problem.

Jason Bailey, the director of the Kentucky Center for Economic Policy, says the budget, which includes five percent cuts to over a dozen state agencies, reflects the 14th round of harmful cuts since 2008, and doesn't do enough to generate new revenue.

“There are areas that have been time after time after time, so I think for higher education, for human services, for areas like environmental and public and worker protection, I think those systems will be frayed even further by the cuts that we’ve seen.”

Bailey adds that the revenue bill passed by the legislature that gives tax breaks to the bourbon industry and beer and wine wholesalers aren’t worth the cuts to important state agencies.

An effort is underway in the Kentucky General Assembly to enact a state Earned Income Tax Credit in addition to the federal one. 

A state EITC is part of the tax reform proposal being considered this session, and it’s also included in stand-alone legislation. 

Democratic Lieutenant Governor Jerry Abramson says the federal EITC  most often is used to purchase basic necessities and has a ripple effect in the local economy.

"What you find from the federal earned income tax credit is that it's probably the number one item that's spent immediately upon being received by working families who qualify for the earned income tax credit," explains Abramson.

The tax reform plan calls for a state EITC at 7.5% of the federal credit.  Separate legislation filed by Senator Morgan McGarvey, a Democrat from Louisville, would allow at state EITC of 15% of the federal credit.

"This is an opportunity to encourage all the right values - work, responsibility, family, and fairness," comments McGarvey. "Ronald Reagan called the EIC the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress, and we need to embrace that opportunity in Kentucky."

If approved by the legislature, Kentucky would be the 25th state to have a state EITC.

A new report shows over half of Kentuckians are living paycheck-to-paycheck, and would fall below the federal poverty line if they lost their job.

The numbers come from the Corporation for Enterprise Development, a non-profit based in Washington D.C. that has released a scorecard focusing on the financial well-being of households in each state.

The numbers for Kentucky aren't good.

Fifty-two percent of Kentuckians wouldn’t have enough money to get by at the federal poverty level if they lost their job. The report says that means more than half of households in the commonwealth “are one crisis away" from financial devastation.

Sixty-percent of Kentucky residents have sub-prime credit, which is defined as a credit score below 570.

Kentucky Center for Economic Policy Director Jason Bailey says the report is proof that the commonwealth has steeper economic challengers compared to many other states, because of Kentucky’s traditional reliance on low-wage jobs.

An economic think-tank says a raise in the minimum wage would benefit reduce child poverty and help about a quarter of Kentucky workers.

The Kentucky Center for Economic Policy says a $10.10 an hour minimum wage would lead to a boost in consumer spending. That, they say, would spur job creation, and allow low-income families to make ends meet.

Opponents argue higher wages would force layoffs or cause businesses to raise prices. But center director Jason Bailey says it would actually keep employees in what are currently lower-paying jobs. That cuts the costs businesses pay to hire and train new workers.

“The lack of consumer spending is a big impediment to additional hiring; that additional money in people’s pockets, low-wage workers’ pockets at this time, money that they will then spend, could actually result in a small job gain," Bailey said.

Bailey supports a bill filed by House Speaker Greg Stumbo that would raise the state’s minimum wage from $7.25 an hour to $10.10. A new Public Policy Polling survey shows that 57 percent of Kentuckians support the idea.

Stumbo’s measure would also require pay equity for women, who earn 77 cents for every dollar earned by men.

Kentucky's pension systems are slated to have to pay out more than $17 billion that the state doesn't have.

The numbers come from Kentucky Retirement Systems director William Thielen, who testified before lawmakers in Frankfort Monday. He says the state's various pension funds have only a fraction of what they need to pay all potential retirees.

Thielen says if lawmakers make good on a promise to fund the pensions with the recommend amount, known as the ARC, it'll take a few years before the unfunded liability starts to drop.

“It’ll bottom out around 2018 or ‘19, and then start increasing. But, again, that depends on the full ARC being paid and for us meeting all of our assumptions, and most importantly our investment assumptions," Thielen told lawmakers.

Gov. Steve Beshear has appropriated about $200 million for KRS over the next two years.

Kevin Willis

Kentucky’s bourbon distillers are celebrating a record number of visitors in 2013.

The eight facilities that make up the Kentucky Bourbon Trail saw a 12 percent jump in visits last year, with nearly 572,000 visitors touring facilities such as Four Roses,  Maker’s Mark, and the recently-opened Evan Williams Bourbon Experience in downtown Louisville.

Kentucky Bourbon Trail director Adam Johnson  attributes part of the tourism draw to the efforts distillers have made to improve their facilities.

“Name the distillery, and they’ve put some serious money in expanding that experience for their visitors," Johnson told WKU Public Radio. "Woodford Reserve, for example—they’re working hard on their place and hope to be open in the spring with a much more expanded experience, just like Jim Beam has done, just like Maker’s Mark has done, just as Wild Turkey has done.”

Johnson says the rising popularity of bourbon and other Kentucky-made spirits has also trickled down to the commonwealth’s growing list of smaller craft distilleries. Nearly 62,000 visits were made last year to members of the Kentucky Bourbon Trail Craft Tour, including Corsair Artisan Distillery in Bowling Green, and Limestone Branch in Lebanon.

Here is a list of the member distilleries that are a part of the Bourbon Trail and Craft Tours:

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