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Kentucky Policies Prevent Progress

By Theresa Fritz Camoriano

Steve Higdon, President of Greater Louisville Inc., Louisville’s Chamber of Commerce, addressed the Louisville Venture Club on May 4, summarizing  an economic report that explains why Kentucky has fallen behind other states in terms of economic growth.  Higdon explained that the cities are the economic engines that provide the jobs and taxes, but, instead of appreciating their contribution to the state’s economy, the state legislature drains them of resources, making them uncompetitive as compared with cities like Nashville and Indianapolis.  Higdon said the traditional businesses of agriculture, horses, and mining account for only 3% of the state’s economy, but they receive the lion’s share of attention in the state legislature. 

Some points Higdon made:

·                    Louisville sends two billion dollars in taxes to Frankfort each year but receives only one billion dollars back. 

·                    Kentucky tax policy punishes the high income workers, who generate the jobs, driving them to other states. 

·                    State gasoline taxes are spent in rural areas, building highways and roads that are sparsely used, while allowing city highways and roads to become congested and poorly maintained.

·                    Kentucky is not getting its money’s worth on education.  It spends as much as other states but is not receiving comparable results.

·                    Taxes paid by Louisville residents are not being used to build the infrastructure needed to support future growth.

·                    One of the most frightening economic issues for Kentucky’s future is the pension plan for state workers, which is far more generous than private sector pensions and will drain substantial financial resources in the future.

Higdon said he has begun reaching out to the chambers of commerce of other Kentucky cities, which are suffering from the same problems as Louisville, in an effort to have some political clout with the state.  If the cities and business enterprises can speak to the state legislature with one voice, as the teachers do, then maybe they will be heard.  Higdon said the state needs to understand that a change in policy that benefits the cities would result in economic growth that would benefit the entire state.

The Kentucky legislature’s policy of draining the resources of the cities in an attempt to benefit rural residents (attempting to rob Peter to pay Paul) brings to mind the words of former slave Frederick Douglas: “No man can put a chain about the ankle of his fellow man without at last finding the other end fastened about his own neck.” 

The full economic report can be found at: http://www.greaterlouisville.com/content/community/newsroom/CoomesManuscript.pdf

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