Business investments in Kentucky hit new record with $5.8B pledged so far this year

05/26/2017 06:04 PM

FRANKFORT – Gov. Matt Bevin and state officials said Friday that Kentucky had set a new high-water mark in economic development with more than $5.8 billion in business investments pledged thus far this year.

That amount surpasses the previous record, $5.1 billion, set in 2015, and Bevin says this year’s total will likely grow with seven months left in the calendar year. The governor said he’s continuing to talk to businesses interested in future developments in Kentucky.

“We are just getting warmed up,” Bevin said, adding later that the investments will amount to about 9,500 jobs once complete.

Bevin, in a press conference on the Capitol steps, singled out a few big-money projects that helped establish the new record.

Amazon announced in February it would spend $1.5 billion to build a new shipping hub in northern Kentucky, with tax incentives worth up to $40 million. Toyota unveiled its plans to invest $1.3 billion in its Georgetown plant in April, with tax incentives worth up to $43.5 million, and later that month, Braidy Industries said it would locate a new aluminum mill in Greenup County at an estimated cost of $1.3 billion, with up to $10 million in tax incentives and a $15 million investment from the state that could ultimately be worth $200 million.

Those incentives are worth a small fraction of the companies’ overall investments, Bevin said, pointing to the General Assembly’s passage of a right-to-work law as a primary driver of growing business interest in the state.

He noted that the new law was central to Braidy Industries’ planned aluminum plant in South Shore, which is expected to employ 550 at average salaries of $70,000 annually.

“It was literally because of that that we are now competing for business we never would have gotten,” he said.

“Braidy Industries is a perfect example where they have said straight up time and again, with very little coverage I might add, but they have said repeatedly that they only came here and would only be here because of the fact that we’re a right-to-work state. I’m in the process right now of talking to some other significant companies, major players, names you know, some you might not know, but most you know, who are also looking at us for the exact same reason.”

Bevin and Senate President Robert Stivers, who predicted that the state could hit $10 billion in economic development by year’s end, were critical of“a lawsuit filed Thursday by the AFL-CIO and Teamsters Local 89”: challenging the constitutionality of the right-to-work law in Franklin Circuit Court.

Stivers, R-Manchester, cautioned the labor groups against pursuing their lawsuit “that may stymie progress and the energy we have going here.”

He noted that right-to-work laws have been upheld by state and federal courts, including the Sixth Circuit Court of Appeals that ruled in November that local governments in Kentucky could pass right-to-work ordinances.

“I saw a comment that said, ‘Look we want better wages and working wages for people,’” Stivers said. “Let me tell you what $70,000-a-year wages mean. That’s on average $35 dollars an hour in rural Kentucky plus benefits.”

Those wages will trickle down, he said, as workers spend their earning on things like home energy and groceries.

While major investments grab the most attention, Cabinet for Economic Development Secretary Terry Gill said small- and mid-size businesses also played a vital role in helping the state set a new economic development record.

“That’s the fabric of this economy and a big part of what the cabinet really intends to do, which is to reach out to that business community and ensure we’re listening to their needs and attentive to how we can help them grow their business, so it’s really economic flourishing really across the state in middle-size businesses as well as billion-dollar enterprises,” he said.

Of the $5.8 billion in business investments, Gill said $3.8 billion came from companies opening new locations in Kentucky and $2 billion came from existing businesses.

The Kentucky Democratic Party panned Friday’s announcement as “a sham,” with KDP Chairwoman Sannie Overly saying that the numbers are based on projections.

“This money has not been spent in Kentucky,” Overly said in a statement. “In fact, Bevin’s total is an accumulation of overestimates that result in one giant, inflated amount that is based more on speculation than reality. Hardworking families deserve the truth about Kentucky’s economy.”


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