KAM House Testimony Paves Way for Future Economic Incentives for Existing Manufacturers

KAM’s testimony Thursday before the House Economic Development Committee laid the groundwork for an out-of-the-box approach to economic development incentives that could pay dividends for existingKentucky manufacturers in years to come.

            The committee hearing was set up to present a new iteration of legislation (HB 730) that KAM worked on earlier and was introduced by Rep. Fred Nessler of Mayfield. 

            KAM’s Jim LeMaster, Greg Higdon and Rusty Cress (see photos above) told  Chairwoman Rep. Ruth Ann Palumbo and other committee members that Kentucky’s future prosperity depends on providing economic incentives for existing manufacturers to expand operations or invest in high-speed equipment that will allow them to out-produce low-wage nations.

            “Let’s think about having a paradigm shift in the way we think about economic incentives,” LeMaster said.  “In addition to the existing programs that tie economic incentives to new job creation…let’s provide economic incentives to keep the jobs we have.”

            Palumbo and others on the committee engaged in a lively and friendly exchange with the KAM delegation, due in part because some of the committee members served with LeMaster and Higdon when they were in the General Assembly.

            “Because you have been members of the General Assembly yourselves, you know how this process works, so you also know how to educate and work with us on this important issue,” Palumbo said in reference to KAM’s highly experienced and veteran government relations team representing the manufacturing industry.

            Committee Member Melvin Henley of Murray lauded the proposal, saying, “This impacts our communities even more than we realize,” he said while pointing to a KAM slide that showed the industry’s $27 billion contribution to the state’s economy.  “The dollars we invest in manufacturing will stay home.” 

            LeMaster and Higdon also emphasized the importance of the workforce development challenge in response to an inquiry.  “There are lots of well-intentioned efforts going on around the state, but most are being done in silos,” he told the committee.  “KAM is trying to bring together these groups to make a difference.” 

            Higdon pointed to KAM’s partnership with KCTCS as an example of efforts to train Kentucky’s existing and future workforce to replace retiring Baby Boomers.

            Under the proposed legislation, which effectively expands the Kentucky Reinvestment Act of 2003, tax credits would be extended to existing manufacturers that invest in new machinery or equipment that improves productivity (including renovation or construction of new facilities to house the equipment) as follows: 

§         Over 100 Employees - $1 Million (minimum) Projects

§         26-100 Employees - $500K (minimum) Projects

§         1-25 Employees - $250K (minimum) Projects

            Rep. Tommy Thompson of Owensboro asked LeMaster what type of manufacturing represented Kentucky’s best opportunity for economic growth. “The automotive sector, which comprises $7 billion of the industry’s $27 billion output, continues to show tremendous promise,” LeMaster said. 

            Rep. Alicia Webb-Edgington of Ft. Wright recommended that KAM should also look at how Kentucky might also provide more incentives for technical education training.   LeMaster used a new advanced manufacturing program at Gateway Community and Technical College in Florence as an example of the type of training program that is needed in other regions of Kentucky.

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