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Issue Position: Kentucky Jobs First Plan

Issue Position

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Jobs First: An Economic Investment Strategy That Creates Good Jobs Now

Kentucky's future depends upon our ability to grow our economy and create high-wage jobs with good benefits that will enable us to compete in the 21st Century.

It is time that we focus more of our attention on growing our economy from within, making our own businesses a priority and putting high-paying, good-benefit jobs first, instead of concentrating only on luring out-of-state companies with the promise of tax reductions, abatements and direct grants.


Kentucky ranks 45th in its ability to compete in the 21st Century, 42nd in entrepreneurial activity and 39th in its business tax climate compared with other states. We rank 44th in high-tech jobs, 43rd in industry investment in research and development and 41st as a place to do business. These grim statistics show how little Kentucky has progressed under Ernie Fletcher.

Why? Because Fletcher has failed to provide the leadership needed on economic development. Kentucky has added only half the number of jobs that were added in other parts of the country, and although approximately 62,000 more people entered the workforce between 2004 and 2006, the state's unemployment rate increased during the same period from 5.5 percent to 5.7 percent. In fact, the state Department of Labor reported that Kentucky businesses laid off 55,000 workers in 2005 - 46 percent more than were laid off in 2004.

This reflects the misguided focus of the Fletcher Administration - or lack thereof. A 2005 investigation by the Lexington Herald-Leader of government giveaways found that, over a 10-year period, "one in four companies that received assistance from the state's main cash-grant program did not create the number of jobs projected; one in five manufacturing companies that received a tax break has since closed; and the state sometimes does not attempt to recover incentives, even when companies fail to create the jobs as required." And a study the same year by the Mountain Association for Community Economic Development concluded both that Kentucky under Ernie Fletcher fails to evaluate economic development tax subsidies and that Kentucky relies narrowly on a single strategy of attracting businesses with financial subsidies - and the Fletcher Administration's "narrow emphasis means that other important strategies are comparatively neglected."

Kentucky needs to refocus its economic development strategies so that they target high-wage, sustainable jobs, rely more on creating sustainable growth from within our own state and less on attracting out-of-state companies that demand money from the state in exchange for creating jobs, and ensure that we hold companies accountable for the promises they make.

The use of incentives makes sense - but only as part of a coherent, overall economic development strategy. We should put a sensible tax structure in place with reasonable rates and incentives only for creating good-paying jobs with benefits and investments in growth areas - and then tell businesses that appreciate our good-job environment to come create those good jobs in Kentucky and those that don't to go elsewhere. That's what the Beshear Plan for Jobs First does.


My Jobs First plan is the only comprehensive economic program in this campaign. Period. It has three major components:

* It starts with providing incentives for the kinds of businesses we need - those with high growth potential in high-wage jobs.

* Then, it proposes to restore government integrity with an ethics reform package that will make Kentucky government an engine for progress instead of a drag on efficiency and economic growth.

* Finally, I will lay out my plans for turning our schools into first-class institutions of learning, modernizing our workforce development and training system and making higher education a viable option for more Kentuckians, as well as providing health care coverage for all Kentuckians by putting in place measures to control costs and improve access.

I. The Right Incentives for the Right Businesses

Make no mistake about it - Kentucky's future depends upon our ability to grow our economy and create good-paying jobs with benefits that will enable us to be competitive in the 21st Century.

As Governor, I am committed to creating high-wage jobs in Kentucky. But I disagree with the notion that the only way we can do that is by paying companies to bring those jobs to our state, and then continuing to pay those companies to keep the jobs here.

Incentives should be a tool used to grow our economy and to create high-wage jobs, but they should not be the only tool. Nearly two decades ago, in 1986, the Kentucky Tomorrow Commission - which I chaired - concluded after an in-depth review of how to improve Kentucky's economy: "[E]conomic initiatives born of Kentucky know-how and Kentucky talent must be the foundation of our future economy…Policies geared toward recruitment of industries and branch plants from outside the state will not meet Kentucky's long-term job needs."

We were right then - and that's still right now. Kentucky needs a governor who understands that real economic development will come from Putting Kentucky First - and that Kentucky's economic growth will come from Kentucky-based businesses, and those businesses are mostly small businesses.

If Kentucky is going to be successful in the future, we must focus more energy and resources on growing businesses from within. We should redirect some of the funds now spent on recruiting out-of-state businesses with the promise of tax credits, and instead invest taxpayer dollars to help existing Kentucky businesses grow and expand. We need to:

* Create a high-growth state economic development strategy for the 21st Century.

* Improve Kentucky's business climate.

* Help Kentucky's small businesses grow and prosper.

* Put Kentucky on the road to energy independence.

Below are just some of the many proposals I have advanced already in this campaign to jump-start Kentucky's economy and create the kinds of high-wage jobs that all Kentuckians can benefit from. You can find more on my website,, where I discuss my Putting Kentucky Businesses First and Fueling Kentucky First plans, among others.

I will bring government agencies with a role in economic development together with business leaders and education providers to create an economic development strategy to move Kentucky forward. Most importantly, as Governor, I will use this as an opportunity to focus our resources on industries and businesses that have the best chance to compete in Kentucky, such as energy, manufacturing, agriculture, adventure tourism, shipping and distribution and data warehousing. These industries build off our existing strengths and have the potential to create more high-wage jobs.

In addition, as Governor, I will take other action to create a statewide economic development strategy including:

* Making Kentucky's Business Tax Incentives Work. Each year, Kentucky, like every other state, spends millions of dollars on economic incentives to attract businesses to relocate here and create jobs. This year is no exception. In spite of this seemingly popular approach, many economists claim that this strategy is flawed because states often do not consider the true costs involved, especially compared with other strategies like workforce development training that provides a greater return on investment - as a recent University of Kentucky study found. It is time to redirect some of those funds to programs that truly provide meaningful benefits to Kentucky businesses and workers. As Governor, I will rein in corporate welfare programs and use some of those funds to invest in Kentucky businesses to help them grow.

* Instituting Corporate Accountability. So far this year, an additional $7 million has been allocated to financial incentives to recruit out-of-state businesses, on top of the more than $100 million spent on incentive programs already each year. Kentucky may well be throwing some of those millions out the window if we don't require the companies that receive those incentives to do what they promise. To hold business accountable, several states - such as Arizona, Massachusetts, Ohio and West Virginia - have put various types of so-called "clawback" provisions in place. For example, Minnesota requires all state and local subsidy agreements to contain clawback provisions that allow the state to recapture at least part of the original subsidy (with interest) if a company fails to meet its agreement terms, and the business is blocked from receiving further assistance until it has either repaid its debt to the state or five years have passed. To further assure that businesses fulfill the commitments they make to Kentuckians, our state government should make public all business deals that involve the use of taxpayer dollars once the deal has been finalized. This is essential to ensuring that businesses are held accountable for the promises they make and create the jobs they said they would. It's time Kentucky institutes tough corporate accountability provisions, and when I am Governor we will.

* Offering Workforce Development Training Programs that Match the Needs of the Industries and Businesses We Want to Attract. Kentucky's ability to create more high-wage jobs depends upon the investments we make in our workforce. Although most studies show that worker training programs produce a higher economic benefit than tax credits, we still have little information to tell us whether our workforce training programs truly meet the needs of the industries and businesses they are designed to benefit. As Governor, I will reach out to all industries and businesses and ask for their input on what state government could do to improve these programs so that they better meet private sector needs.

* Evaluating all Government Programs that Service Businesses. Pro-growth economic development policies cannot effectively be carried out in Kentucky unless we know first how well government programs support our business community. Unfortunately, we currently have very little information to determine if they are fulfilling businesses' needs and achieving intended results. Tax incentives are a good example of where more research and evaluation are needed to determine whether programs are successful and if they should be continued. For example, the North Carolina Department of Revenue is required to publish a report on the state's business incentive credits annually. North Carolina also requires that a biennial study be done on the effectiveness of its tax credits; this effectiveness report uses more sophisticated analytical techniques to reflect actual payments and usage. As Governor, I will evaluate all government programs and services that support our businesses and put in place a system to monitor their effectiveness. In addition, I will instruct my Administration to revamp processes and procedures when changes can improve how programs and services are delivered.

* Focusing Economic Development Strategies on Industries that Represent our Future. In recent years, the emphasis has been on maintaining manufacturing jobs. Although these jobs must be preserved and manufacturing represents a lead sector of our economy, we should not ignore the potential for growth in other areas. If Kentucky is to remain competitive, economic development strategies that build off our economic strengths and have the potential for growth in the future should be pursued. While we must continue to ensure that we sustain the manufacturing jobs we have, we also must target other sectors of our economy, such as small businesses, energy, agriculture, adventure tourism, data warehousing and value-added products that also offer the potential to create high-wage jobs.

* Encouraging Innovation through Research and Development (R&D) as a way to create high-wage jobs. Kentucky lags behind other states in programs and policies to promote the creation of more high-wage jobs. At least 35 states offer tax credits for R&D activities, but Kentucky does not. R&D tax credits provide important incentives for businesses to stimulate research and innovation, which lead to new products and services and ultimately enable a business to expand and create jobs. As Governor, I will look into creating an R&D tax credit to cover a portion of Kentucky businesses' research expenses.


* Making Government More Responsive to Business. Although Kentucky's Cabinet for Economic Development provides a Business Information Clearinghouse (BIC) for consumers to call and receive information about various state license requirements and other information, access to the BIC is not available online. The agency further is limited in the services it can provide businesses because it still largely relies on traditional business processes, like paper copies and telephone requests. Relying on these out-dated methods only causes delays and leads to inefficiencies that could be avoided with technology. As Governor, I will bring these systems into the present.

* Reducing Unnecessary Paperwork and Streamlining the Application Process for Economic Incentive Programs by limiting the number of forms that need to be filled out and making the approval process more efficient. Currently, businesses typically need to complete more than one application that requires much of the same information and submit it in hardcopy rather than electronically through email. As Governor, I will simplify this process.

* Creating a More Attractive Venture Capital Tax Credit by giving a tax credit of up to 50 percent of the investment instead of the current 40 percent. Other states like Maine and Missouri have made their venture capital tax credits more attractive to investors. Both of these states lowered the minimum investment amounts and Missouri provides a higher tax credit level of up to 50 percent.

* Making Investments in Technology Infrastructure such as broadband Internet access, wireless broadband technologies and statewide cellular coverage that will enable small businesses, especially those in rural areas, to sell their products on the world market. Although the availability of broadband in Kentucky has increased over the past several years, it is not enough simply to make it available to underserved, rural areas if people aren't using it. For example, only 57 percent of Kentucky's population is online, despite Kentucky's expansion of broadband infrastructure. As Governor, I will explore replicating successful programs undertaken in other states to increase broadband use, such as former Virginia Governor Mark Warner's "Tech Riders" initiative, which increased the number of Internet users in rural areas of Virginia. The Tech Riders program placed computers in local churches where people were more likely to visit and feel comfortable than in public libraries and computer labs.

* Enhancing Technology Transfer and Commercialization Opportunities from Kentucky colleges and universities to increase our economic competitiveness. Our colleges and universities are economic development catalysts. Their expertise and intellectual property offer our high-tech industries and small businesses new opportunities for economic growth through product development. Kentucky colleges and universities already are involved in innovative, cutting-edge research in areas like agriculture, plant and animal sciences, food, nutrition, health surveillance, pharmaceuticals and environmental sciences, among others, that when partnered with entrepreneurs and businesses can lead to new commercial ventures and more high-wage jobs. As Governor, I will promote the work of our colleges and universities as potential technology partners with Kentucky businesses.


* Creating an Office of Small Business Development within the Cabinet for Economic Development, whose sole mission will be to help create, grow and expand small businesses. Presently, the Cabinet for Economic Development administers most business-related services on behalf of the state, including services for small businesses. The scope of this agency, however, limits its ability to focus on small businesses. For example, some of the most important business growth opportunities are underused federal programs, such as loan guarantees from the Small Business Administration. By bringing together economic development professionals familiar specifically with the needs of small business and how federal support to businesses can enhance job growth, Kentucky will be better positioned to assist business owners in expansion efforts.

* Completing an Economic Impact Analysis of Newly Proposed Rules and Regulations. It is important that state agencies know how potential new rules and regulations could impact businesses before they are implemented. As Governor, I will require state government to review the economic impact of any proposed rule or regulation change, as California, Florida and New Jersey already do.

* Building a Strong Entrepreneurial Culture to Spur Small Business Growth by creating an environment that encourages risk-taking and supports it with access to capital and technical assistance. According to the 2006 Small Business Survival Index, Kentucky ranks 36th of all states in the friendliness of its environment for small business and entrepreneurship. We must enhance our entrepreneurial culture through pro-growth policies such as increasing the availability of capital, especially in early stages of business start-up, expanding access to technical assistance such as how to prepare a business plan, and encouraging greater venture capital investments that enhance, not limit, business growth.

* Developing an Easy to Use Entrepreneurial Website that walks people step-by-step through the start-up process and includes a toll-free number for people to call and ask questions and receive answers from a qualified business representative. As Governor, I want to make it easier for people to start their own businesses.

* Creating More Business Incubator Programs. An incubator provides support and services that accelerate the successful development of start-up and fledgling companies by providing entrepreneurs with an array of targeted resources and services. Business incubator programs are particularly beneficial in more rural areas of the state where resources can be limited. My Administration will monitor the availability of incubator space and work with the two types of state-funded business incubators, privately managed by the Kentucky Science and Technology Corporation, that currently exist throughout the state. These help Kentucky entrepreneurs to establish successful technology-based businesses and assist state research institutions and local organizations to ensure that adequate incubator space is available to meet our growing needs.

* Assessing the Impact of Tax Structure on Small Businesses. Kentucky must provide a business climate that fosters economic growth and expansion if it is going to compete in the 21st Century. The Small Business Survival Index, which ranks states based on government-imposed or related costs, found that states where entrepreneurs and small businesses do well typically have a low tax burden on small businesses, such as Nevada, Wyoming and Florida. That is why, as Governor, I will investigate the impact of taxes on our small businesses - such as the Alternative Minimum Calculation (AMC) tax - and look for ways to make them more fair and balanced. Two areas, in particular, that I will review are whether to exempt some businesses like not-yet-profitable start-ups and possibly others from paying a minimum fee of $175 for doing business in Kentucky - and whether to raise the gross receipts threshold for those businesses to which the tax applies without letting big businesses slip through the cracks.

* Evaluating the Benefits of a Statewide 401(k) Savings Account for Small Businesses. Small businesses often do not have the financial means to offer employer-sponsored retirement plans, like 401(k) plans, to their employees. For this reason, some states are developing retirement savings plans of their own. For example, Michigan is designing a new retirement savings tool called MI Retirement, which essentially will give employees of small businesses access to the state-administered 401(k) plan at little or no cost. The State of Washington also is in the process of creating a 401(k) plan for employees of small businesses. It estimates that the plan will cost the state $13 million in administrative costs over five years, at which point it will become self-sustaining. As Governor, I will evaluate the benefits of designing a statewide 401(k) plan for Kentucky's employees of Kentucky small businesses so they can invest and accumulate savings for retirement.


This past March, I released my Fueling Kentucky First plan - months before the Governor ever made energy a priority. Throughout Fueling Kentucky First (available at, I apply many of the same strategies discussed in Putting Kentucky Businesses First to promote our energy sector. Unlike the Governor's approach to expanding our energy sector only through costly tax incentives, my plan starts with implementing sound, commonsense strategies to spur new entrepreneurial investments, reform the regulatory landscape and target financial and job training resources so we can create new jobs in rapidly-growing industries - like using energy more cleanly and more efficiently than ever before. Quite simply: "Fueling Kentucky First" means investing in the research and development and deployment of new clean coal, alternative fuel and Clean Technology businesses in Kentucky, establishing new cutting edge workforce development training programs for the coal mining and Clean Technology workforce of tomorrow, and, over time, attracting new Clean Technology manufacturing plants and industries to Kentucky.

Among my top priorities as Governor will be to create a $60 million Kentucky Energy Fund to help jump-start the development of alternative fuels and new clean coal technology industries in Kentucky. By providing $15 million in incentive grants and research funding each year, the Kentucky Energy Fund will create a public/private partnership that will make Kentucky a national leader in the production, distribution and sale of home-grown fuels, like corn ethanol (fuel produced from burning corn), bio-diesel (clean-burning alternative fuel commonly made of soy, animal fats and/or wastes or vegetable oils) and cellulosic ethanol (ethanol blend of grasses and agricultural wastes, such as switch grass and stalks), as well as clean coal (coal that is purged of some minerals and impurities) and coal-to-liquid and coal-to-gas technology. Kentucky can become one of the first states to become energy independent by dramatically ramping up the private sector's ability to produce alternative fuels to power our cars and trucks, as well as investing in renewable and other clean power generation technology, while providing a much-needed boost to our rural economies across the state.
My Fueling Kentucky First plan builds on Kentucky's greatest natural resource in our strong energy foundation - coal. Today, Kentucky is 3rd in the nation in coal production, employs over 17,000 workers in the coal mining industry, and produces more than 95 percent of its electricity from coal. Kentuckians enjoy some of the lowest electricity rates in the nation and my Administration will work to keep those rates low, while moving forward with new clean coal technologies.

My Fueling Kentucky First plan also includes:

* Creating a Secretary of Energy Independence. Right now, there is too little focus in Kentucky's efforts to start attracting the jobs of tomorrow and forging an energy-independent future. Ernie Fletcher seems to have just recently discovered this issue. His Executive Order 2006-1299 of October 2006, establishing a Governor's Energy Policy Office with a paltry budget and limited authority, was a first step in the right direction, but it isn't enough to get the job done. That is why, as Governor, I will create a cabinet-level position of Secretary of Energy Independence to refocus state government's effort toward achieving energy independence. First and foremost, state government must become smarter in the way it leases and purchases goods and services, particularly, in the kinds of buildings that it leases, cars it buys and the fuel and power it purchases. I want Kentucky to become a lead state in this area.

* Making Kentucky the Clean Coal Capital of the World. A number of other states are already moving ahead with new clean coal power plants and coal-to-liquid fuel conversion facilities, but Kentucky lags behind. We have some catching up to do if we want to take advantage of these market trends. First, there is great potential in coal-to-liquid fuel conversion technologies. Not only can the liquid fuels of the future be derived from Kentucky coal, but the liquefaction process can help screen out a number of harmful pollutants. In short, there is the potential for producing cleaner fuels for our cars and trucks from Kentucky coal. Second, anyone who thinks the world of fossil-fueled energy is not headed for some serious regulatory changes is kidding themselves. I believe we should start working right now on new clean coal technologies, to make sure Kentucky is successfully demonstrating that the new integrated gas combined cycle (IGCC), coal gasification, and other clean coal technologies are just as environmentally friendly as other power plant technologies. In that way, Kentucky coal will have a market no matter what the regulatory changes of the future may be. We won't be competitive if we just stand still.

I will move Kentucky forward in a way that reduces emissions and protects and preserves the environment, including taking the lead in dealing with sequestration and capture of carbon dioxide (CO2) emissions. I will order my Secretary of Energy Independence to immediately identify and tap federal clean coal dollars for demonstration and research development projects in Kentucky.

* Building Our Natural Gas Industry. In addition to finding a market for our coal, we ought to be finding markets for our natural gas. Potential exists to further develop our natural gas resources which are plentiful in many parts of the state. At a time when a pipeline is being built to deliver more natural gas from Alaska and states like California, Louisiana and Massachusetts are considering the construction of liquefied natural gas (LNG) terminals to help import natural gas from around the world, Kentucky ought to be doing more to ensure that our abundant natural gas supplies are being captured, exported and used within our own borders.

* Doing More for Kentucky Taxpayers for Less. Under my leadership, Kentucky will take a different approach to ensuring that state tax dollars are being spent responsibly. First, the Secretary of Energy Independence will bring a new focus to identifying new and existing state and federal funds for clean coal and Clean Technology projects. Examples of the relevant areas to explore include:

1. Retargeting some existing Kentucky state economic development funding toward high-wage, high-growth clean coal, alternative fuel and Clean Technologies.
2. Working with the Kentucky state pension funds to consider a new investment pool to target investment funding toward profitable, high-growth Clean Technology industries and long-term sustainable energy industries in Kentucky.
3. Identifying and drawing down every available dollar from the August 2005 federal Energy Policy Act, which created billions of dollars in grants and tax incentives for new alternative fuel, renewable energy, clean coal and energy efficiency projects and industries.

Second, I will provide a focal point in state government for interactions with the private sector, federal agencies, Kentucky's public and private universities, colleges and community and technical colleges, trade associations and labor unions.

* Reinventing the Way Kentucky Regulates New Clean Technology Industries. As Governor, I will require all state agencies to re-think how Kentucky regulates, encourages and permits all of our Clean Technology industries. My Administration will provide incentives for the distribution and sale of alternative fuels and "flexible fuel" hybrid cars and trucks, which will help reduce our dependence on foreign oil.

I also will make investing in renewable energy sources like wind, water, geothermal and solar energy a priority. Renewable energy sources generally are cleaner than traditional fossil fuels but, unlike traditional fossil fuels, renewable energy sources never run out. For example, my Administration will investigate the use of renewable power standards, as 23 other states have done, to spur new technologies and businesses that generate electricity from renewable power sources without raising electricity rates.

In addition, state laws and regulations do not provide direct incentives to power generators to help improve energy efficiency. My Administration will work hard to put new regulations and incentives in place that will provide financial and tax incentives to power generators and power consumers to use energy more efficiently.

Kentucky should be fighting for its energy independence using home-grown crops, products, resources and ingenuity. Now is the time to modernize state laws and regulations on electric utilities and alternative fuels to encourage innovation and investment in Kentucky.

As Governor, I will make sure Kentucky state government agencies encourage entrepreneurial investments by streamlining the permitting process for alternative fuels and clean coal facilities while providing technical assistance to new Clean Technology businesses to make sure they comply with environmental laws as they grow and expand.

* Better Targeting Research and Education Funds Toward Clean Energy Technologies. I believe that one of Kentucky's greatest potential assets for the development of new clean coal, alternative fuels and Clean Technology industries will be its system of higher education.

1. Community College and University Budgets - Advanced Research on Alternative Fuel Technologies. As Governor, I will use the biennial state budget process to encourage universities, colleges and Kentucky Community and Technical College System (KCTCS) to offer students and professors the opportunity to be engaged in the types of research projects that will lead Kentucky toward energy independence.
2. Community College and University Curricula - Workforce Development. My Administration will aggressively pursue federal workforce development funds and use its financial leverage to encourage Kentucky's universities, colleges and KCTCS to offer students courses on renewable power, alternative fuels and other next-generation technologies. Kentucky should become a national leader in the design, production, maintenance and repair of clean coal, alternative fuel and renewable energy production facilities. Kentuckians with some post-secondary education and/or technical training will form the backbone of the workforce of the new higher-paying jobs in Kentucky. My goal is to create the types of jobs that will keep our best students in Kentucky.

* Kentucky State Government Will Lead by Example. Under my leadership, Kentucky state government will lead by example by:

1. Making Bulk Diesel Fuel Purchases. As Governor, I will start by requiring that state agencies purchase a 20 percent biodiesel blend to run existing state-owned diesel vehicles and equipment.
2. Opting for Electric Power Purchases. As Governor, I will direct the Secretary of Energy Independence to require state agencies to purchase a significant percentage of their electric power from clean coal or renewable sources by the end of my term.
3. Procuring an E-85 Ethanol and Hybrid Vehicle Fleet. As Governor, I will work to replace the state's vehicle fleet with "flexible fuel" E-85 and hybrid vehicles as these new fuel-efficient transportation options become more available.
4. Providing Guidance for New Office Leases and/or Construction. As Governor, I will consider placing a moratorium on new construction or new leases for office space that do not meet certain benchmarks for energy efficiency and sustainable building. New state office buildings should be required to be Energy Star compliant and to conform to "smart building codes."
5. Conducting Energy Audits at State Facilities and Increasing Energy Efficiency. I will work with local utilities and energy service companies to fund energy audits in state buildings and facilities, including office buildings, garages, prisons and public university buildings and to develop plans to incorporate identified opportunities for energy efficiency. These investments have a short pay-back period and will save the state thousands, if not millions, of dollars in utility bills during the life cycle of these buildings. In addition, I will work with local school districts to develop matching funds to help school districts undertake similar energy audits and develop plans to install measures to increase energy efficiency.

* Focusing on Immediate Deployment of Cost-Effective Clean Energy Technologies. As Governor, I will require my Secretary of Energy Independence to pursue all viable technologies and industries that are likely to produce the type of Clean Technology jobs and industries we want to locate or expand in Kentucky. Examples include:

1. Energy Efficient Technologies: Many Kentucky homes and small businesses waste energy by relying on outdated insulation, lighting, heating and ventilation technologies. There are technologies available right now that can save those businesses and homeowners' money in the near term. Simply switching to compact fluorescent light bulbs that use 75 percent of the energy used by regular light bulbs and put out the same amount of light can reduce energy consumption. Yet what is lacking in many instances is the type of financing those homeowners and small businesses can afford. I will ask the Secretary of Energy Independence to work with energy cost savings companies, lenders, non-profit foundations, small businesses and homeowners to come up with creative financing solutions. Deploying these new energy-efficient technologies can often achieve a "triple bottom line" result of creating construction jobs, saving small businesses' and homeowners' money through energy cost savings and helping the environment.
2. Ethanol and Biofuels: Ethanol and other biofuels continue to be cost competitive with gasoline, and my Administration will work closely with Kentucky's farmers, refiners and distributors to make sure that this home-grown resource continues to make inroads in the Kentucky marketplace. In addition to the steps described above to promote the sale and distribution of ethanol and biodiesel, my Administration will provide financial support and incentives for more gas station owners to put ethanol and biodiesel pumps in their station. My Administration will encourage the development of new energy-efficient and water-conserving corn ethanol plants that are located near existing power plants and/or wastewater treatment plants. We will also develop incentives for new plants to locate near existing infrastructure such as rail road lines and ports.
3. Cellulosic Biofuels and Biodiesels: In addition to currently competitive biofuels made from soy, corn and other farm products, new methods of converting cellulose and woody materials into liquid fuels using genetically engineered bacteria and enzymes hold the promise of producing farm-based fuels that are cheaper than gasoline and current forms of ethanol. For example, these new technologies would allow refiners to use corn stalks as well as the corn when producing ethanol. Kentucky's researchers and farmers, businesses and universities can play a critical role in developing these new alternative fuel technologies. In a 2004 study, the National Academies' National Research Council concluded that newer state-of-the-art technologies will permit the production of certain biofuels in the next ten to fifteen years at approximately $35 per barrel. My Administration will promote research and development of new alternative fuel technologies to spur innovation in this area.
4. Making Sure Rural Kentucky Is Part Of The Clean Energy Solution. As Governor, I will lead a public education and awareness campaign to make sure that all areas of Kentucky benefit from these new alternative fuel and renewable power opportunities. Kentucky farms can sell their grains and other agricultural products to ethanol or biodiesel refiners and feed their farm animals the leftover highly nutritious feedstock produced when ethanol is refined. I will ask my Secretary of Energy Independence to make sure all areas of Kentucky benefit from these new programs, products and investments.

II. Restoring Government Integrity

It's no coincidence that Kentucky's economy has gone nowhere under Ernie Fletcher while his Administration has been plagued with corruption, cronyism, and incompetence: As countries around the world demonstrate every day, bad government is a drag on economies. And Ernie Fletcher's government - with its indictments and cover-ups - is a particular drag on Kentucky business.

During the 2003 campaign, the Governor promised to clean up Frankfort and put an end to waste, fraud and abuse. Yet from almost Day One, the Governor and his Administration have been plagued by allegations of scandal and corruption. About a year after taking office, the Attorney General began investigating whether jobs were being filled based on political affiliations or on merit. Shortly afterward, 28 members of the Fletcher Administration - and the Governor himself - were indicted on charges of conspiracy, official misconduct and violating the Merit System law. Following the indictments, the Governor pardoned his entire administration, and then pleaded the Fifth Amendment when he faced a grand jury. Now the Governor is accused of having selected transportation projects based on whether local lawmakers supported his policies and ideas.

Kentucky cannot prosper, and cannot attract the best jobs from around the country, if it continues to be seen as a backwater where you have to pay off the Governor to get any business. Now more than ever, Kentucky needs a leader who can reach across party lines and unite parties from each side to advance key issues like economic development, health care and education. I have the experience, maturity and toughness to get the job done and lead Kentucky towards a brighter, more prosperous tomorrow.

Kentucky will not enjoy the economic growth it needs and will be limited in the kinds of jobs we can obtain unless and until government integrity is restored. That's why it's time we take these necessary steps toward ethics reform in Frankfort:

* Enforcing the Code of Ethics and Obeying the Law. Kentucky already has some of the toughest, most stringent ethics laws of all states. We have one of the strictest gift ban laws of any state in the country. We have a revolving door provision that requires former legislators to wait two years - the longest period required by states - before becoming a lobbyist and we have a tough "pay-to-play" restriction. We are one of the few states to prohibit lobbyists from making campaign contributions, and we have strict reporting requirements. And our financial disclosure laws are on par with leading states in this area. So what is needed? To enforce the code of ethics and ensure that laws are respected and protected by the leader of this state - an important piece of restoring integrity that's currently overlooked. A Governor who thinks he's above the law - who won't tell the truth to a grand jury and pardons everyone in his Administration for crimes they may have committed - cannot provide the leadership needed to enforce these laws.

* Reforming the Governor's Pardoning Power. Kentuckians deserve a government that maintains the highest ethical standards - an honest government, an open government, a government the people can trust. Kentuckians deserve a government that holds itself accountable. Government makes the laws, spends the people's money, and should be accountable for each and every action it takes. When our leaders break the law and abuse the public trust, they should be held accountable - just like regular citizens.

* Ernie Fletcher has placed his political appointees above the law by abusing his constitutional power to pardon - a power that was never meant to allow a governor to hide criminal acts by his political friends from the public. Ernie Fletcher not only pardoned his cronies who had been indicted by a grand jury, he also issued blanket pardons to any of his friends who may have violated the law even before they were indicted.

* It is time to limit the pardoning power of future governors, so that this type of abuse never happens again. As Governor, I will lead the General Assembly in an effort to pass and place on the ballot a constitutional amendment to limit this power. The Governor should have the power to pardon someone only after they have been convicted of a crime. By placing such a limit on this power, all the facts surrounding an offense would be known and made public before any pardon was issued, and thus the Governor would be more accountable to the people.

* Disclosing Legal Defense Fund Contributors of Candidates for Public Office Prior to Election Day. Legal defense funds are funds set up to defray the costs of legal proceedings that involve ethic violations, civil and criminal matters. These funds are common in the political arena and strict laws are often in place to forbid contributions from lobbyists and special interests who seek to gain monetarily or politically in return for their contribution, and to protect the fund's integrity. In Kentucky, the Executive Branch Ethics Committee will allow constitutional officeholders and candidates for re-election to establish a legal defense fund with their permission. Once permission is granted and the fund is set up, all donations to these funds are considered "gifts" under the state ethics code and therefore are required to be reported to the Executive Branch Ethics Commission. However, if a fund were to be started the same year in which a candidate sought re-election, gifts would not need to be reported until February the following year - after both the primary and general elections were held. This loophole must be closed. As Governor, I will require that all contributors to legal defense funds of any candidate be publicly disclosed at least one month before both the primary and general elections.

* Making All Government Deals with Private Interests Public. Once any economic deal is made between state government and a private interest - an individual or a business - the information should be made public. As Governor, I will make sure that the public has access to all economic deals made by state government to safeguard against public corruption and scrutiny. By adding this measure of accountability, the public now will know what the state is giving away and what private interests are getting in return.

* Requiring Ethics Training and Education for Legislative and Executive Branch Employees and Lobbyists. The Kentucky Legislative Ethics Commission is responsible for establishing, supervising and conducting an ethics education and training program designed for legislators and publishing manuals and guidelines on the state's Code of Ethics, however, Kentucky is one of 17 states that provides training but doesn't require legislators to participate. As Governor, I will propose that all legislators participate in and complete an ethics education and training program within 6 months of taking office and I will propose the same requirement for all lobbyists. In addition, I will require that all appointees in my Administration complete an ethics training and education program offered by the Executive Branch Ethics Commission.

* Making All Administration Officials Accountable and Subject to the Ethics Laws. As Governor, I will ensure that all members of my Administration are subject to state ethic laws - including unpaid advisors and "volunteers" that the Fletcher Administration has used to skirt these laws.

* Respecting the Merit System. It is critical that the Merit System be protected. When someone is suspected of violating the Merit System and its rules, the Governor should instruct his Administration to cooperate with investigators and not hinder or obstruct their investigation. Unfortunately, that isn't the case today. Suspicions of cronyism and allegations of avoidance by members of the current Administration are the norm. When I am Governor, I will restore accountability to the Governor's Office and Kentucky state government and increase penalties for anyone who abuses the Merit System.

* Increasing the Penalties for Violating the Executive Branch Code of Ethics, as Well. As Governor, I will propose that anyone found guilty of ethical misconduct and in violation of the Code of Ethics repay the costs incurred by the state to conduct the investigation as part of the penalty. In addition, I will review the classification penalties and consider enhancing them to include higher financial penalties (fees and fines) and public reprimand. It's time we had a leader in Kentucky who respected the laws on our books.

Under my leadership, I will make sure that Frankfort serves as a model of open and honest government.

III. Investments to Grow Kentucky's Economy

Kentucky needs high-wage jobs.

The best way to improve our economy is by providing opportunities for everyone to obtain further education, job training and a better job with higher pay - not just a select few. We cannot afford to waste more time and money on a piecemeal approach to job creation based on paying business subsidies to companies whenever they suggest they might move in or threaten to move out. Instead, it is time we retool our approach and replace it with a pro-growth strategy that starts with investing in Kentucky-based businesses and cleaning up Kentucky government - and then invests in Kentucky's people, as we should.

In the coming weeks, I will unveil my plans for:

* Creating first-class schools to ensure that our students master basic skills as well as challenged academically so when they graduate they can become productive members of the workforce and make Kentucky competitive.

* Improving our workforce development and training system so we can prepare our workers for an ever-changing economy and equip them with the skills they will need to obtain high-wage jobs, as well as making higher education a viable option for more students so Kentucky can meet its goal of having 800,000 Kentuckians with bachelor's degrees by 2020.

* Ensuring that health care coverage is available for all Kentuckians by reducing costs and improving access to care, so that families do not have to choose between seeking the medical care they need and buying food or heating their home.


It is the duty of the Governor to make responsible choices on behalf of taxpayers. It is an obligation that I promise to uphold as Governor.

I am the only candidate to release comprehensive plans with details for carrying out the changes Kentucky needs and the only one who has a plan for how to pay for all of these changes. That's the difference in this election. It's the difference between moving ahead, or continuing to stand still. It's the difference between honesty and integrity in facing our challenges, or politics as usual. It's the difference between real leadership or another four years of the same hollow promises.

We need to start putting the past behind us - and putting Kentucky First.

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