Blog: Light at the End of the Tunnel

Statement

Over the last few years, our nation has faced a devastating recession born of greed on Wall Street and reckless spending in Washington.

Yet, I've seen Kentuckians uniquely stand up to these economic pressures by working harder and spending less--qualities my administration has also adhered to.

During my State of the Commonwealth address, I reflected on our strategic decisions and responsible -- even aggressive -- fiscal management that have poised Kentucky to rise successfully out of this recession, ahead of most other states:

Since I took office, we've balanced the budget eight times, slashing more than a billion dollars in spending. And our executive branch is the smallest it's been in decades.

We've saved $24 million by making the difficult decision to furlough most state workers, including myself and my entire staff.

Our efforts early on to rein in government are paying off. We've avoided having to make drastic cuts to core services like many other states. And we've resisted raising broad-based taxes.

I will continue to oppose raising taxes during this session. I will not burden our families, nor threaten the growth of our businesses during this perilous time.

And I will not jeopardize our momentum in recovering from this recession.

Our strategy is working. The light at the end of the tunnel is real, and we are moving closer to it:

* Unemployment rates are down in 84 counties from a year ago

* More than half of Kentucky's manufacturers plan to hire in 2011

* State receipts are up 5.4 percent through the first half of the year -- the first time in three years that revenues aren't falling short of projections

I do, however, recognize that tough times are not over. And my top priority has been and will continue to be creating and retaining jobs.

Since we created our business incentives program in the summer of 2009, 248 statewide projects have been approved and are moving forward. They represent potential investment of almost $2.2 billion along with nearly 14,700 new jobs and more than 4,800 saved jobs.

National experts agree that our aggressive efforts are helping Kentucky's economy recover:

* Economists at Moody's predict that Kentucky will experience a higher percentage of job growth in the coming year than all but four states.

* In Forbes' annual rankings of best places to do business, Kentucky catapulted up12 places in 2010.

* And last October, we've moved up 15 spots in one year on the national Tax Foundation's list of best Business Tax Climates. We're now 19th, better than many of our neighbors.

But long-term improvements to Kentucky's economy will required a focus on our future workforce.

And that, of course, will come through enhancing education.

The graduation bill, House Bill 225, addresses a longstanding, fundamental problem in our schools by raising the mandatory school attendance age to 18.

A student who drops out will earn about $7,000 less a year than a student who completes high school in Kentucky. If a person goes on to college, that gap is larger -- over a career, it tops a million dollars.

Last session, the House passed this bill overwhelmingly in a bi-partisan vote, and I am confident they will do so again this year. It's time for the Senate to do the same.

In this session, we will also balance the budget -- for the ninth time in three years.

Our current budget anticipated more federal funding for Medicaid than Congress actually authorized, creating a significant shortfall. I've proposed resolving this shortfall in two steps:

* Move $166.5 million from the 2012 Fiscal Year Medicaid budget to the current 2011 Fiscal Year.

* Make the program more cost-effective by increasing the use of private sector managed-care principles. Already we're saving hundreds of millions of dollars.

If this proposal doesn't pass, we will either have to cut $600 million in services or cut provider reimbursement rates by 30 percent. Both options would cause devastating harm.

Since taking office, I've worked with legislators to accomplish an array of goals that benefit Kentuckians: protecting education funding, making it easier to transfer credits from two-year schools to four-year schools, enacting pension reform, investing in the transformation of Fort Knox and even luring a NASCAR race.

This session, we must continue to collaborate to improve Medicaid, keep our youth in school, protect seniors and improve interaction with businesses.

Divisive politics and petty posturing doesn't work. And the people are weary of it.

On the brink of breaking free of recession, Kentuckians need unity in their leaders. Rank partisanship doesn't put food on the table. It doesn't educate a child, and it doesn't create a job.

Times have been hard, but we are turning the corner. Together, we will ensure not only our short-term survival but also prosperity for our children and grandchildren long after we are gone.

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