Kentucky has had success in recent years in improving its schools, building its economy and weathering a recession that delivered a body blow to our state's productivity, employment and tax revenue.
But throughout much of its modern history, Kentucky’s progress has developed by way of regular, small steps toward the realization of a significant goal - what I like to call “aggressive incrementalism.” Occasionally we will have a transformational event such as Toyota or UPS selecting Kentucky and hundreds of smaller companies following them here; but most of our progress is more the result of methodical, shoulder-to-the-wheel efforts by thousands of Kentuckians.
That type of vision and hard work – and a public-spirited ambition – is what Kentucky needs from leaders in both government and business. At the Kentucky Chamber, we are developing a “Working Agenda for Kentucky” to guide our work in the coming months (see below for more). We will focus on moving the agenda forward in the next legislative session and encourage candidates for governor in 2015 and Kentucky’s next chief executive to embrace its elements as key planks of a platform for progress.
Creative thinking and new solutions must become the norm for Kentucky. This agenda offers some ideas, but turning them into reality will require aggressive strategies that are well executed.
The Chamber considers this a starting point and encourages debate on these and alternative proposals for moving
Kentucky forward in the months and years ahead.
In order to move forward Kentucky must ...
Create and support a culture of competitiveness.
Elements of this "must win" culture should include:
- A pro-growth tax system that does not disadvantage citizens or employers compared to surrounding states. Kentucky slipped from 25th to 27th among the 50 states in the Tax Foundation’s 2014 State Business Tax Climate.
- An aggressive economic development program customized for Kentucky’s nine distinct, regional economies. A recent Chamber report notes that regional economic performance can vary greatly across the state, and job-creation prospects are different in each.
- A deliberate plan to recruit talent and creativity, as well as new industries. Economic development professionals agree competition for talent is as important as competition for companies.
- An escalated emphasis on international trade, building on the gains Kentucky has made. Most potential customers for Kentucky goods, from soybeans to automobiles to aluminum to bourbon, live outside the U.S.
- The promotion of wellness for individual, civic and economic benefit. Kentucky's health problems are holding back our workforce and our economy.
Embrace modern practices to ensure an efficient, fiscally sustainable government.
These would include:
- Continuing to curtail increases in state spending on the leaks identified in the Chamber’s Leaky Bucket report, namely prison costs, Medicaid costs and public employee health insurance and pension costs. A recent update shows important progress in the past five years, but the state must maintain its focus on this critical area or investments in education will suffer.
- Becoming more aggressive in fixing the public pension system by demanding a program of disclosures and a consensus approach to
- calculating long-term obligations. Kentucky is in terrible shape for not putting aside enough money to pay for the pensions already promised to public employees.
- Enacting “P3” legislation to significantly expand the use of public-private partnerships. Let the private community save taxpayer dollars on important projects like building dormitories, managing state parks or administering public benefits.
- Undertaking a top-to bottom management review by outside experts to ensure state agencies are necessary and are providing the best possible return on taxpayers’ dollars.
Accelerate the development of a highly skilled and well-educated workforce.
To do this, we must:
- Work methodically to increase the relative funding levels for education to their previous peak as a percentage of the General Fund (48.2% for K-12 and 16.9% for postsecondary).
- Demand efficiency, accountability and transparency at all levels of education, primary through higher education. For example, we should reward our universities when they produce graduates rather than when they enroll new students.
- Institute demand-driven worker training and retraining programs. In Kentucky, we have too many jobs without people and too many people without jobs. And it's only going to get worse as thousands of baby-boomers retire each year.
- Address Kentucky’s dependency culture. The state has the second-highest rate of disability in the country (behind West Virginia) based on the percentage of population receiving disability benefits from the Social Security Administration. We must protect the integrity of these programs for the people they were intended to serve. Getting on disability should not be a career goal.