If you’re snowbound today, don’t fret! The March issue of Business Focus magazine is already available on-line. Get a head-start on all the great upcoming programs and events, including the @330 Series focused on mobile apps & websites, Annual Dinner recap with photos, a Good Morning BG featuring Toyota’s Wil James and FCPS Superintendent Tom Shelton on March 20th, and an unbelievable travel opportunity to Dubai with CLX in October! Happy reading!
Legislative Session Nears Mid-Point; Budget Process Continues
As the legislative session nears the halfway point, the House budget review subcommittees continue to meet and work through the process of reviewing sections of the Governor’s budget, comparing them with agency requests and hearing from impacted groups such as the University of Kentucky and KCTCS. The Governor’s budget also contained $65 million in state bonds for the renovation of Rupp Arena and the Lexington Convention Center. This project has the possibility of transforming downtown Lexington, creating jobs and enhancing economic development opportunities.
Restoring Cuts to Higher Education:
Commerce Lexington, Inc. believes education is one of the most important functions of government, and therefore urges policymakers to make education funding a top priority in the 2014 state budget. Having a highly educated and capable workforce is essential to attracting and retaining business and creating jobs.
The Governor’s proposed budget reduces funding for higher education by 2.5 percent for public institutions. For example, to UK this equates to a $7.1 million loss to its base, operating budget. To put this in perspective, UK’s state appropriation would be $57 million less per year than it was in 2008 if this is enacted.
In addition, the Governor’s budget does contain some positive elements for UK and KCTCS that advocates are working to keep in the House budget and hoping the Senate will also consider.
These capital projects include state bonding for the renovation and expansion of UK’s College of Law building and a much needed research facility on UK’s campus, as well as KCTCS’s BuildSmart proposal, a public-private partnership investment initiative that will provide a total of $194 million in funding for the top capital project at each of the 16 KCTCS colleges - including $24 million in agency bonds for Bluegrass Community and Technical College’s Newtown Campus expansion phase II design.
As the House develops its version of the state budget, it is important for members of the business community to express support for higher education because of its importance to workforce development and economic competitiveness.
Please take a few minutes to contact your State House member and urge support for higher education by calling 1-800-372-7181 or by e-mail. Visit the Voter Information Center to verify your legislative district and representatives.
Minimum Wage Increases Passes Kentucky State House:
House Bill 1 (Stumbo), which seeks to raise the state’s minimum wage from $7.25 to $10.10 per hour, has passed the State House (54-44) despite the objections of many business groups including Commerce Lexington. HB 1 would put Kentucky businesses at a competitive disadvantage with surrounding states and force higher labor costs on Kentucky employers. Additionally, this bill includes a very subjective “equivalent job” standard, which could lead to many lawsuits against employers.
This bill now goes to the Senate for consideration. If this issue is important to your business, please contact your State Senator by calling 1-800-372-7181 or by e-mail. Visit the Voter Information Center to verify your legislative district and representatives.
Workers Compensation Special Fund Assessment:
Every employer in Kentucky currently pays a “Special Fund Assessment” rate (6.28%) on all workers compensation premiums paid. This special fund assessment is intended to pay off previous debt incurred from special fund workers compensation claims (claims prior to 1996). However, over the last several budget cycles, there has been a trend to increase the amount taken from this assessment to fund the Labor Cabinet - above what many in business feel are appropriate administrative costs. This bill now goes to the Senate for consideration.
Senate Bill 63 (McDaniel) is intended to correct this issue and ensure these funds are used for what was originally intended. It would also prohibit the siphoning of funds out of the special fund to fund the day-to-day operations of the Labor Cabinet and encourages one-time settlements on claims before 1996 - which ultimately will help lower the costs of workers compensation assessments for employers. This bill passed out of committee and now waiting action by the Senate.
If this issue is important to your business, please contact your State Senator by calling 1-800-372-7181 or by e-mail. Visit the Voter Information Center to verify your legislative district and representatives.
Governor’s Tax Reform Package:
This past week, Lt. Governor Jerry Abramson discussed the Governor’s tax proposal to a House budget committee. The Kentucky Competes tax reform plan consists of more than 20 different proposals to restructure the state tax code through a mixture of tax reductions/credits and revenue generating measures including an expansion of the sales tax on selected services. If implemented, the plan is estimated to generate approximately $210 million in new revenues each year. For more details, VISIT HERE for the fiscal impact and VISIT HERE for the impact of the expansion of sales tax on selected services.
Local Option Sales Tax:
Two bills were introduced (SB 135; HB 399) in the House and Senate to amend the state’s constitution to allow local governments the ability to enact up to a 1% local option sales tax for voter approved capital projects with a sunset provision. Thirty-seven other states allow local citizens to vote for or against new projects paid for by a temporary local option sales tax. Drafts of the enabling legislation are still being discussed by interested parties. Lexington Mayor Jim Gray has expressed support for this concept.
BLOG POST BY ANDI JOHNSON, VICE PRESIDENT OF PUBLIC POLICY FOR COMMERCE LEXINGTON INC. | firstname.lastname@example.org
Governor Beshear Announces Tax Reform Plan
Governor Steve Beshear announced his legislative plan to modernize Kentucky’s antiquated tax code and make the Commonwealth more competitive for jobs. Based on recommendations from the Governor’s Blue Ribbon Tax Commission, the Kentucky Competes tax reform plan consists of more than 20 different proposals to restructure the state tax code through a mixture of tax reductions/credits and revenue generating measures.
If implemented, the plan is estimated to generate approximately $210 million in new revenues each year. In a recent CN2 Politics interview, House Appropriations and Revenue Committee Chairman Rick Rand (D-Bedford) said the plan may help “fill in gaps” in state budget. Rand is expected to file legislation containing the Governor’s tax reform plan in the State House. Senate President Robert Stivers (R-Manchester) said in a Courier-Journal interview the proposal is “a beginning…a point to start the discussion” and reiterated the importance of understanding how the proposal impacts the business community and job creation.
Below are some highlights from the Governor’s tax reform plan. For a complete description of the proposal, CLICK HERE (plan details) and CLICK HERE (fiscal impact).
GOVERNOR’S TAX REFORM PLAN HIGHLIGHTS:
• Broadens the sales tax to include selected services such as the labor associated with installation and repair of taxable goods, certain recreational activities, and certain commercial, residential and personal services. CLICK HERE for more information this proposal.
• Increases tax on cigarettes to $1.
• Reduces retirement income exemption for those with an annual gross income over $80k.
• Applies sales tax and transient room taxes to the entire hotel accommodation price.
• Reduces individual income tax rates.
• Enacts a refundable earned income tax credit for low wage earners.
• Lowers the top corporation income tax rate from 6% to 5.9%.
• Phases in ‘single factor apportionment’ solely on sales for corporation income tax.
• Creates an angel investor tax credit.
Help for Kentucky’s Signature Industries
• Creates an income tax credit for the bourbon industry.
• Exempts sales and use tax on certain equine products, similar to other livestock - and exempts sales tax on pharmaceuticals for food animals.
• Lowers wholesale tax on beer, wine and distilled spirits.
If you have any questions, concerns or comments about this plan, contact Andi Johnson, Commerce Lexington Inc.’s vice president of public policy.
Kentucky Governor Steve Beshear was the featured speaker at Commerce Lexington Inc.’s Good Morning Bluegrass event presented by Fifth Third Bank on January 31, 2014. Gov. Beshear talked about a number of topics, from his attendance at President Obama’s State of the Union Address to the Affordable Care Act to Medicaid, local option tax, raising the minimum wage, and Rupp Arena/Lexington Center.
Commerce Lexington Inc. has been known by several different names over the course of its 130-plus year history. By the 1920’s, it took on the name of the Board of Commerce.
During a regular meeting of the Board of Commerce’s Board of Directors on Wednesday, January 18, 1922, at the Phoenix Hotel, the minutes reflected that the directors discussed the formation of a Calvary Troop in Lexington, plans for bridle paths around Lexington, the dates of that year’s Blue Grass Fair, the area’s racing and horse industry, and support of the Burley Tobacco Growers Cooperative Association.
SOME OF THE ENTRIES FROM THE JAN. 18, 1922, MEETING INCLUDED:
- CALVARY TROOP: After a discussion of the steps taken to organize a Calvary Troop in Lexington, Director Stewart of the Department of Public Affairs, was asked to name a committee to render any help possible in organizing the Troop.
- BRIDLE PATHS: President Barney Treacy outlined to the chairman some of the plans for 1922, including the establishment of a free campsite, free publicity in outside communities, and bridle paths around Lexington. He stated that horsemen were enthusiastic about the bridle path proposition and that E. R. Bradley had offered to donate patent gates to the owners of farms who gave free use of their farms to this project.
- BLUE GRASS FAIR DATES: Chairman Thompson representing the wholesale interests launched a discussion as to the Blue Grass Fair dates, which had been set for August (1922). He stated that these dates were too early for the wholesale and retail interests to profit by the fact that the Fair was being held here, and suggested that some action be taken. The matter was referred to Director Thompson to be worked out by his department.
- RACING INDUSTRY: Chairman Cramer made a talk on behalf of the horse and racing industry in Lexington, citing the many advantages to this city of the three annual race events.
- BURLEY TOBACCO GROWERS CO-OPERATIVE ASSOCIATION: Director Jones suggested that the Board of Commerce again display its interest in the work of the Burley Tobacco Growers Co-operative Association in view of the fact that they were now up to a point of opening the warehouses, and moved that the Secretary write Mr. James C. Stone to the effect that this Board passed a resolution offering support in every way to their plans. Seconded and carried.
Watch for other historical notes about Commerce Lexington Inc. on this blog, as we comb the board minutes from the early 1900’s.
BLOG POST BY MARK TURNER, SENIOR VICE PRESIDENT, COMMUNICATIONS, COMMERCE LEXINGTON INC. | email@example.com
Throughout the first week of the Kentucky General Assembly, state legislative leaders promoted their respective agendas and issue priorities for the 2014 regular session.
During his State of the Commonwealth Address, Governor Steve Beshear outlined his legislative priorities which include proposals to improve the health of Kentucky’s workforce, provide additional funding for education and modernize Kentucky’s tax code. To read the Governor’s full remarks, click here.
At the recent Kentucky Chamber of Commerce annual legislative dinner in Lexington, Senate President Robert Stivers (R-Manchester) called for legislators “to be bold” in the discussion of how to enhance Kentucky’s economic competitiveness and business climate. Stivers specifically advocated for tax and regulatory reforms, repealing prevailing wage and improving the state’s education system. House Speaker Greg Stumbo (D-Prestonsburg) used the event platform to push for changes in the state’s labor laws including an increase in the state’s minimum wage from $7.25 to $10.10 per hour.
A flurry of bills continues to be filed during week two of the legislative session. Legislative action is expected to heat up after the candidate filing deadline on January 28. This year, half of the 38 State Senate seats and all 100 State House seats will be on the ballot in November.
EDUCATION FUNDING A TOP PRIORITY FOR COMMERCE LEXINGTON:
This session, one of Commerce Lexington’s top advocacy efforts will be urging policymakers to make education funding at all levels a top priority in the state budget. Education is one the most important functions of government. Increasing investment in our public schools and institutions of higher education, such as the University of Kentucky and Bluegrass Community and Technical College, is a critical component to building a stronger workforce, creating jobs and ensuring a vibrant economic future for Central Kentucky.