Call to Order and Roll Call
The 5th meeting of the Interim Joint Committee on Economic Development and Tourism was held on Thursday, November 21, 2013, at 1:00 PM, in the University of Kentucky’s Student Center Ballroom, Lexington. Senator Alice Forgy Kerr, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Alice Forgy Kerr, Co-Chair; Senator Dennis Parrett; Representatives Lynn Bechler, Kevin D. Bratcher, Tim Couch, Mike Denham, Bob M. DeWeese, Jeffery Donohue, Mike Harmon, Richard Heath, Dennis Keene, Thomas Kerr, Kim King, Martha Jane King, Brian Linder, Tom McKee, Terry Mills, David Osborne, Ruth Ann Palumbo, John Short, Arnold Simpson, Wilson Stone, Russell Webber, and Jill York.
Guests: Dr. Eli Capilouto, President, University of Kentucky; Dr. Mark Evers, Director, Markey Cancer Center, University of Kentucky; Ashli Watts, Manager of Public Affairs, and Brent Cooper, Board Member, Kentucky Chamber of Commerce.
LRC Staff: John Buckner, Louis DiBiase, and Dawn Johnson.
Approval of Minutes
A motion by Representative Keene, seconded by Representative Harmon, to approve the minutes of the October 17, 2013 meeting carried by voice vote.
University of Kentucky’s Economic Impact to the Commonwealth
Dr. Eli Capilouto, President of the University of Kentucky, said the university successfully represents the two foremost indicators of prosperity--education and health. The state’s $284 million appropriation saw a return on investment that includes a $1 billion hospital, $2.7 billion academic and research enterprise, more than 5,000 degree candidates annually over the past decade, a statewide cooperative extension network in every county, the expertise for public/private business and industry, a self-sustaining collegiate athletics program, as well as being Lexington’s largest employer and the second largest employer in the state.
Dr. Capilouto noted that Lexington was designated a “Brain Hub” by the Wall Street Journal. Eight-six percent of UK graduates live in Kentucky five years after graduation. The university is the largest research enterprise in the state. In 2012, UK conducted $354 million of research sponsored by outside entities. The “Bucks for Brains” program has allowed the acquisition of exceptional talent. Nationally, UK is 38th among public research universities.
Dr. Capilouto said the university has made critical investments in research space, including the Biological Biomedical Science Research Building, the College of Pharmacy and the Spinal Cord and Brain Injury Research Center. He reviewed several of the many uses of these facilities.
Dr. Capilouto spoke on the leadership, investment, success, and need for the Markey Cancer Center. The state must continue partnerships and investments for a brighter future.
Dr. Capilouto explained several of the university’s commercialization and innovation efforts, including the Center For Applied Energy Research, the Houseboat to Energy Efficient Residences, Faith Moves Mountains, and licensing revenues and patents. The Coldstream Research Campus includes the Advanced Science & Technology Commercialization Center on UK’s campus, and the businesses and organizations of the Coldstream Research Campus including Eastern State Hospital, Bingham McCutchen, and Tempur Sealy.
UK’s Cooperative Extension Service serves all 120 counties, providing financial management strategy assistance, farming resource management and sustainable agriculture practices advice, tourism/agritourism assistance, and 4-H involvement.
Dr. Capilouto spoke on UK HealthCare’s success. Through the legislature’s support, UK HealthCare has nearly 36,000 admissions and 450,000 outpatient visits annually. Revenues have risen to $922 million and over 3,500 jobs have been added at UK HealthCare and the College of Medicine. There are 140 outreach clinics throughout central and eastern Kentucky.
UK’s Athletics program is one of the few self-sustaining programs nationally. The athletics program makes possible investments in the university through scholarships and $65 million to the new Academic Science Building.
A $264 million private investment will result in new modern housing for 4,600 students. On-campus living increases student success. Construction has resulted in additional jobs and additional state and local tax revenues.
Dr. Capilouto gave an overview of the three projects that have begun as a result of House Bill 7, which allowed the university to self-finance projects. The Gatton College of Business and Economics is entirely funded through philanthropy, and new construction at the college should be completed by May 2016. The Academic Science Building, a $100 million project of which two-thirds is financed by UK Athletics, will begin December 2013. The Commonwealth Stadium renovation, a $110 million project privately financed by UK athletics, will also begin in December 2013. Plans include meeting space for large group campus and public events.
Because of the state’s investment, UK provides the expertise of faculty that supports not only public endeavors but imaginative private initiatives, a self-sustaining collegiate athletics program, and continued private investments that bring jobs into the state.
Smoke-Free Policies and the Workplace
Dr. Mark Evers, Director of the University of Kentucky’s Markey Cancer Center, spoke of the need to address Kentucky’s high cancer rates. Nationally, Kentucky ranks highest in smoking related cancers and cancer mortality rates, and it has the second highest incidents rate of all cancers. Eastern Kentucky has some of the highest cancer rates in the country. Approximately 34 percent of Kentucky’s population is protected by comprehensive smoke-free workplace laws or regulations. Kentucky is doing better than surrounding tobacco-producing states. When the National Cancer Institute (NCI) returns for the center’s reevaluation, Dr. Evers hopes that Kentucky will be 100 percent covered by smoke-free policies. Benefits of existing smoke free policies include $21 million in healthcare cost savings and a 22 percent decline in asthma-related emergency department visits. There has been no indication of economic harm by smoke-free laws in rural communities.
The Markey Cancer Center received the NCI designation July 2013, following years of work and a rigorous application and review process. The center is one of 68 NCI designated cancer centers in the country, ranks in the top three percent of cancer centers, and is the only NCI cancer center in the state. The NCI designation attracts faculty who bring multiple research grants and have access to more clinical trials that are only available at NCI designated centers, and it increases the number of second opinions on cancer diagnoses. NCI centers have economic benefits through the increased number of employees, patients, biotechnology, patents, licenses, and royalties.
Dr. Evers said the first question asked during the NCI review process concerned what the center was doing about Kentucky’s smoking problem. While 34 percent of Kentucky’s population is covered by smoke-free policies, the center will be reevaluated through a competitive application in 2017. Improvement needs occur through increased research and community outreach. Having Kentucky 100 percent covered by smoke-free laws will help with the renewal of the designation status.
Chair Kerr informed members that Dr. Lee Todd, former President of the University of Kentucky, was unable to attend, but speaking notes were in the meeting materials.
Ashli Watts, Manager of Public Affairs, Kentucky Chamber of Commerce, urged members to support a bill that would prohibit smoking in indoor workplaces and public places. With 29 percent of Kentuckians still smoking, which is the highest rate in the country, the Center for Disease Control estimates smoking costs Kentucky more than $1.5 billion annually, including $487 million in state-funded Medicaid costs. Smoking causes significantly higher rates of absenteeism. The business community can no longer ignore the effects smoking has on insurance premiums and tax bills. A recent Ohio State University study showed employers pay approximately $6,000 more per year for a smoking employee compared to a nonsmoking employee. Kentucky ranks 48th in workplace exposure to cigarette smoke. Kentucky businesses incur increased costs for workers in unemployment compensation, disability benefits, operations, maintenance, and property insurance. Over 90 percent of Chamber of Commerce members who responded to a 2013 policy survey supported a comprehensive smoking law. Comprehensive laws and ordinances have been passed in 24 states and 23 Kentucky communities, including Louisville and Lexington. Numerous studies have indicated smoke free laws do not have a negative impact on the economy and in many cases have a positive one.
Responding to Senator Parrett’s question, Ms. Watts said the proposed legislation is a comprehensive smoke-free law that covers all indoor public places.
Responding to Representative Harmon’s question, Ms. Watts said approximately 50 percent of Chamber of Commerce members responded to the survey, however she needs to verify this information. Representative Harmon asked that she forward this information to all members.
Brent Cooper, a Kentucky Chamber of Commerce Board member, expressed support for a comprehensives smoke-free initiative. He urged members to consider smoking as an economic development and state issue when considering legislation. Surveys indicate a business’s main issue when considering relocation is quality of workforce. A smoke-free law would signal that health and wellness are important to the business community.
Representative Simpson said constituents opposed to smoking policies often are concerned about encroachment on personal rights. Responding to Representative Simpson’s question, Mr. Cooper said the focus is on smoking in public spaces.
Representative Simpson said legislators recognize in many instances that promulgation of public policy is best left to local communities. Responding to Representative Simpson’s request for a response, Mr. Cooper said the state makes many public policy decisions, such as the statewide seatbelt law.
There being no further business, the meeting adjourned at 2:25 PM.