Lexington, KY - After two days of meetings with members of President-Elect Barack Obama's administration and the nation's other governors, Steve Beshear said when the new administration takes office, he will be ready to hit the ground running in pursuit of any federal dollars made available for infrastructure improvements.
"What I hear the Obama Administration saying is that they want to put money into projects that can be started almost immediately - - within the next 90 to 120 days - - and then finished quickly, so that it's not just a long slow project, but something that will involve lots of people that will put our people back to work," Beshear said. "That's what this is designed to do. It's to get our people working again, get paychecks in their hands."
As Beshear readies for his second legislative session, beginning in earnest on Feb. 3, the governor sat down for an exclusive interview with Business Lexington. Beshear discussed his plans for the legislature, the state's economy and issues pertinent to the Lexington business community. Prior to the interview, a wide variety of local elected officials, business leaders, developers, civil servants, non-profit directors, educators and other local leaders were asked to submit concerns they would bring up with the governor.
Local sales tax option
Since the 2006 Commerce Lexington Leadership Visit to Oklahoma City, a number of organizations - - most notably the Kentucky League of Cities - - have pushed for an amendment to the state's constitution to allow localities the right to ask citizens for a limited duration sales tax for a specific project. Beshear, then an attorney in practice at Stites and Harbison, attended the trip. Recently, he was asked as governor what he now thought of the local sales tax option:
"Certainly Oklahoma City was able to do some things with that process that they had out there Ö their process was that certain cities were allowed to put an increase of the sales tax on for a specific period of time and then it would sunset and go off. I just don't think that Kentucky and the legislature are ready for that yet. I think we're going to need to see a lot more discussion of it before we get to the point of having any kind of serious consideration of it," he said.
While constitutional amendments can be broached in the legislature whenever it meets, they can only appear on the ballot in general elections in even years. That would mean an almost 2-year wait before any amendments passed in the 2009 session could appear on the ballot. The timing and current economic strife, he said, are enough to quell his interest in the local option this time around. "I know that that idea has been tossed around and I know that there is a lot of support from city governments for it at this point. I'm not sure that issue has been discussed enough or debated enough to move very far yet. It's not something that is on my radar screen right now for 2009."
Casinos
Beshear, though, did hint once again at pushing for expanded gaming in the state, which would also require a constitutional amendment that could not be voted on until Nov. 2010.
"Whether it is gaming here or something else we've got to figure out ways to keep our horse industry competitive or we're going to lose it. It's going to move other places because that's where the money is going to be," Beshear said when asked about the state of Kentucky's equine industry.
Economic development
Despite asking the legislature to approve nearly across-the-board cuts in state funding of 2 percent to 4 percent, Beshear said he would seek new, non-revenue intensive ways to stimulate business in the commonwealth.
"In spite of our budget problems we are aggressively pursuing new business, we're aggressively working with existing businesses to try to maintain the jobs we have and to get them to expand and grow and create new jobs ... in connection with that. We are in the process of taking a comprehensive look at our incentive packages and incentive legislation that we have on the books to see if we need to modernize that in any way, to make it more flexible ... [in order] to create new jobs and to get our economy moving even more in Kentucky," he said.
Beshear has yet to name a replacement for Economic Development Secretary John Hindman who resigned in early September after 14 months on the job. One of Beshear's top aides, Larry Hayes, has filled in as the interim secretary.
Professional recruitment
Toyota and Lexmark, two of Central Kentucky's largest employers, told the Urban County Council in November that they are having economic development problems of their own and they are failing to attract top professionals to come to work for them in Kentucky because of a lack of cultural and entertainment options.
"For every person who is looking [to live in a mega city like a New York or Chicago], there are 10 or 15 or 20 people that are looking for a different quality of life, a wonderful quality of life in a little smaller place, but a place that has all of the cultural amenities and social amenities that you can find in many large cities," the governor said, citing his son and daughter-in-law's move from Washington, DC to Louisville. "Obviously the Lexington area has much of that with the university and it brings the cultural activities and the artistic activities to that area that a university attracts, and of course it is a beautiful place because of the landscape and the whole atmosphere there.
"What we do need to do and will do is to continue to work with the Lexmarks, the Toyotas and others to help recruit people," Beshear said.
Beshear said he has experience in helping recruit people to the Lexington area. "I have spent some time with folks at UK talking to a potential doctor [recruit for the hospital] or a potential professor about how great being in Lexington is and what a good quality of life it would be. Those personal kinds of touches can help also," he said.
Kentucky as the No. 3 auto state
Beshear said he is also concerned about Toyota and the other car companies in Kentucky. While Toyota is in much better shape than the domestic automakers, Beshear said he has been keeping a close eye on the situation in Washington as 85,000 jobs in the state are directly or indirectly linked to the auto industry.
"Toyota is an example of a company that has been very forward thinking and has planned ahead. They are constantly thinking of 10 years down the road and 15 years down the road, whereas our domestic manufacturers were much slower to come to the realization that they needed to do that. They tended to get satisfied with the niche they were in and thought that things would continue the same way they always had," he said.
Beshear, who served as lieutenant governor when Toyota agreed to build its first North America plant in Georgetown, has been in extensive conversations along with Louisville Mayor Jerry Abramson to keep Ford producing vehicles at its two Louisville facilities. Beshear said Ford will retrofit its Louisville lines to allow multiple cars to be produced on the same line rather than force a shutdown of up to 12 months to accommodate a shift in production as is currently the practice. The Toyota Georgetown plant has had some of these capabilities since opening 20 years ago and is now completely flexible.