Call to Order and Roll Call
The first meeting of the Interim Joint Committee on Economic Development and Tourism was held on Thursday, June 19, 2014, at 1:00 PM, in Room 154 of the Capitol Annex. Senator Alice Forgy Kerr, chairperson, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Alice Forgy Kerr, Co-Chair; Representative Keith Hall, Co-Chair; Senators Julian M. Carroll, Ernie Harris, Jimmy Higdon, Dennis Parrett, and Mike Wilson; Representatives Lynn Bechler, Kevin D. Bratcher, Larry Clark, Tim Couch, Mike Denham, Myron Dossett, C.B. Embry Jr., Jim Gooch Jr., Mike Harmon, Richard Heath, Dennis Horlander, Dennis Keene, Kim King, Martha Jane King, Tom McKee, Terry Mills, Ruth Ann Palumbo, John Short, John Will Stacy, Fitz Steele, and Russell Webber.
Guests: Robert Riggs, Kentucky Aviation Association, Aviation Museum of Kentucky Board of Directors, and Kentucky Institute for Aerospace Education Board Member; Dr. Tim Smith, Executive Director and Chief Executive Officer, Kentucky Institute for Aerospace Education; Dr. Benjamin K. Malphrus, Chair, Department of Earth and Space Sciences, Space Science Center, Morehead State University; Dr. Larry Ferguson, Vice-Chancellor of Economic Development and Workforce Solutions, Kentucky Community and Technical College System; Dr. Michael Benson, President, Eastern Kentucky University; Ralph Gibbs, Chief Flight Instructor, Eastern Kentucky University (EKU) Aviation; Dr. Suzanne Weaver Smith, PE, Director, NASA Kentucky Space Grant and EPSCoR Programs; John R. Hughes, Program Manager, Belcan Engineering Group, Inc., Lexington; and, Mike Young, Co-Founder, Kentucky Aviation Council.
LRC Staff: John Buckner, Lou DiBiase, and Dawn Johnson.
Economic Impact of Aerospace/Aviation on the Commonwealth
Mike Young, Co-Founder of the Kentucky Aviation Council, spoke of the many exciting opportunities in Kentucky’s aerospace industry. The Governor announced in February that aerospace components exports are greater than the state’s automotive industry exports. The Kentucky Aviation Council was formed in 1995 to address the needs of the industry. At that time, aviation was the largest employer in the state and economic projects were the result of the state’s aviation infrastructure. Mr. Young gave an overview of the agency’s mission, including increasing airport development in Kentucky by using the jet fuel tax.
Mr. Young explained the purpose of the meeting was to share the development of the aerospace and aviation business and the educational activities across the state. He said Kentucky could be the number one aerospace manufacturing state.
Robert Riggs, Kentucky Aviation Association, the Aviation Museum of Kentucky, and Kentucky Institute for Aerospace Education, said a 1998 aviation economic impact study on airports reflected a $10 billion industry with 100,000 employees. New estimates suggest it was a $12 billion industry with 130,000 employees before the most recent recession. Kentucky has 59 public airports, with 28 having 5,000 feet runways, and six commercially certified for scheduled air carrier service. Referring to Mr. Young’s comments, he said aerospace exports in 2013 were almost two percent more than automotive exports. Employment in aerospace manufacturing has increased 63 percent since 2012, while product exports have increased 85 percent. Of the 71 categories of space products and services identified by Morehead State University, 52 are made in Kentucky.
Dr. Tim Smith, Executive Director and Chief Executive Officer of the Kentucky Institute for Aerospace Education (KIAE), said the program prepares students for a future in aerospace by working with students beginning in high school, through technical college and university level education and into the workplace. KIAE is a nonprofit organization whose mission is to increase student engagement in aerospace by improving science, technology, engineering, and mathematics (STEM) learning and providing an authentic connection to the work. The program results in college and career ready graduates. Currently, 32 schools in Kentucky and Tennessee participate in the program with most being in Kentucky. Dr. Smith explained the program’s collaboration with state universities. KIAE is in the process of building an Aerospace Education Center in partnership with the Transportation Cabinet. The student graduation rate has been 100 percent the last three years. Students score 17 percent higher than the state average on the ACT and not only meet but exceed the benchmarks for college readiness in math and science. Seventy-five percent of the program’s students go into STEM fields upon graduation and 25 percent go into aviation.
Dr. Smith explained that the program needs support to complete the Education Center and increased resources to provide more technical assistance to students. He would like to see increased partnership between state agencies as aerospace and aviation are transportation, economic development, and education initiatives. Dr. Smith introduced three students who spoke of their experiences in the program.
Dr. Benjamin Malphrus, Chair of the Department of Earth and Space Sciences Center, Morehead State University, discussed the space economy, noting that it is a $5.6 billion state industry. The Space Sciences Center’s focus is on small satellites or “nano satellites” that are easier to manufacture and launch. Dr. Malphrus explained the CubeSat program and the satellite uses, such as constellations that may be used for data transfer, GPS, security measures, and financial transactions. Projections indicate substantial growth in the field and Kentucky is poised to be a major player. Morehead State’s program has partnered with government agencies including NASA as well as aerospace companies, universities, and consortia. Dr. Malphrus gave an overview of the Space Science Facility including the Spacecraft Integration Facilities and the Space Systems Verification Lab. Dr. Malphrus explained that the program’s purpose is to generate the next generation of aerospace workforce.
Dr. Malphrus urged the governor and Kentucky congressional representatives to lobby the United States Department of Commerce to extend the Southwestern Aerospace Region manufacturing corridor into central and eastern Kentucky to include Louisville, Lexington, and Morehead to allow for greater opportunities for economic growth.
Dr. Larry Ferguson, Vice Chancellor of Economic Development and Workforce Solutions, Kentucky Community and Technical College System (KCTCS), gave an overview of how KCTCS is involved in the aerospace and aviation in Kentucky. He said Somerset Community College has a successful two-year aviation maintenance technology program approved by the Federal Aviation Administration. The program has an almost 100 percent job placement rate. It is a competitive, STEM oriented program. KCTCS has a two-plus-two agreement with Eastern Kentucky University and other state institutions. Through the Workforce Solutions Unit, KCTCS provides workforce training for multiple companies across the state. KCTCS has several Advanced Technology Centers on its campuses that partner with STEM related companies linked to aerospace. They provide skill sets for employment high tech companies.
Dr. Michael Benson, President of Eastern Kentucky University, said the university has one of the best aviation programs in the country.
Ralph Gibbs, Chief Flight Instructor with EKU Aviation, explained the program’s mission to prepare students for careers in aviation and to be a world-class aviation academic and flight training institution. Students are trained to be job ready either as flight instructors or flying on-demand air charter. Mr. Gibbs said the goal is to make Kentucky the state of choice for aviation education. The program curriculum was recently revised to mandate that all airline pilots are to have an Airline Transport Pilot Certificate. The EKU curriculum is an exact duplicate of the Naval Aviation Training Command. EKU collaborates with nine regional carriers. These regional carriers recognize the coming pilot shortage due to the new regulations. EKU offers postsecondary an aviation program with concentrations include aerospace management, professional flight, and aerospace technology.
Dr. Suzanne Weaver Smith, Director of the NASA Kentucky Space Grant and EPSCoR Programs and University of Kentucky Systems Research Consortium, explained that NASA has invested in Kentucky’s aerospace workforce for approximately 25 years. They have invested millions in multiple projects annually involving 14 academic institutions across the state. The program provides seed money for beginning projects; for example, $400,000 was invested over a five year period in developing autonomous aircraft, which in turn produced 300 graduates in engineering, many of whom found employment at GE Aviation and Belcan Engineering Group. She said the NASA Kentucky program is investing in the Institute for Aerospace Education in projects that involve authentic, hands on STEM education for workforce development and faculty development for research capacity.
Dr. Smith said research in unmanned aerial systems (UAS) is emerging now. In 2015, the FAA will allow commercial flights and sell services with UAS. The Association for Unmanned Vehicle Systems International released an economic development report in 2013 estimating an economic impact of $82 billion over the next 10 years in the US with an estimated $537 million economic impact and 600 additional jobs in Kentucky. This estimate was based on an understanding of the state’s infrastructure not the actuality of Kentucky’s assets.
Dr. Smith explained that research in Kentucky over the last 12 years has resulted in industry standard designs on unmanned aerial systems. Kentucky has over 14 years of agriculture applications experience. Kentucky is a leader in UAS technology. She explained that a group of faculty and students joined together December 2013, to form a research consortium to share information and bring assets together to benefit business as well as each other, and, more UAS manufacturing companies are locating to Kentucky. The training available at KCTCS has been an attractive feature of Kentucky. She said to support these developments, Kentucky needs UAS air space. Other states are turning to installing unmanned systems air strips which must be located away from other airports. Dr. Smith said this infrastructure investment would be a huge benefit to companies wanting to locate in Kentucky.
Dr. Malphrus explained Space Tango, a program that bridges the gap between higher education and the space industry. It is a for-profit venture, with 51 percent owned by Kentucky Space, a not-for-profit venture managed by the Science Technology Corporation. The goals are to create a new sustainable high-growth, high-value industry in Kentucky to attract entrepreneurs and inventors to the state. This can be achieved through reinvestment. The program created the nation’s first aerospace incubator and accelerator for aerospace. Areas of concentration are space operations, space logistics, and nanosatellite technology. Dr. Malphrus noted that FedEx is opening a space logistics operation to process and ship sensitive space assets. The program received $10 million in contracts in just one week.
John Hughes, Program Manager at Belcan Engineering Group, Inc. expressed support of the KIAE program as the company will ultimately benefit from aerospace graduates. Belcan would rather hire graduates from Kentucky than out of state. He noted that the University of Kentucky produces a lot of engineering graduates but many leave the state. The Lexington office of Belcan was created to keep graduates in state. He said it is hard to attract engineers to Kentucky. Promoting STEM education will help provide the state with future engineers. He noted that a proposal has been sent to the Ohio legislature to set up an aerospace committee consisting of legislators and industry representatives to collaborate on aerospace development. Belcan recently learned of other aerospace initiatives in Kentucky and would like to be involved in a partnership or committee to promote collaboration and increase companies in the aerospace workforce.
Senator Kerr said it has been her vision to get industry representatives together to discuss the future of aerospace in Kentucky.
Mr. Riggs said it would help the industry to change the tax structure to be more favorable to aviation/aerospace because it is an economic engine.
There being no further business the meeting adjourned at 2:45 PM.