Call to Order and Roll Call
The 5th meeting of the Interim Joint Committee on Economic Development and Tourism was held on Thursday, October 16, 2014, at 1:00 PM, in the Biomedical Biological Sciences Research Building at the University of Kentucky, Lexington. The meeting was a joint meeting with the Interim Joint Committee on Labor and Industry. 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; Representative Keith Hall, Co-Chair; Senators Carroll Gibson, Denise Harper Angel, Jimmy Higdon, Dennis Parrett, and Mike Wilson; Representatives Lynn Bechler, Kevin D. Bratcher, Tim Couch, Mike Denham, Jeffery Donohue, C.B. Embry Jr., Jim Gooch Jr., Mike Harmon, Richard Heath, James Kay, Dennis Keene, Thomas Kerr, Kim King, Martha Jane King, Tom McKee, Terry Mills, Ruth Ann Palumbo, Arnold Simpson, John Will Stacy, Wilson Stone, Tommy Thompson, and Russell Webber.
Guests: Dr. Eli Capilouto, President, University of Kentucky; Dr. Michael Karpf, Executive Vice President for Health Affairs, University of Kentucky, and Beth Brinly, Commissioner, Department of Workforce Investment, Education and Workforce Development Cabinet.
LRC Staff: John Buckner, Louis DiBiase, and Dawn Johnson.
Approval of Minutes
A motion by Representative McKee and second by Representative Palumbo to approve the minutes of the September 18 meeting carried by voice vote.
University of Kentucky’s Impact on the Economy of Kentucky and the Health of its Citizens
Dr. Eli Capilouto, President of the University of Kentucky (UK), testified about recent developments at UK. He said that UK was awarded a $14.9 million contract from Patient-Centered Outcomes Research Institute to improve the quality of patient care in transition through a national, multi-institution partnership. This year the university experienced historic enrollment of 30,062 students, with the largest undergraduate African American, Hispanic, and international enrollment to date. The university reflects remarkable levels of academic quality and diversity.
Key areas of the institution’s impact on the Commonwealth include a $280 million investment that yielded a $3 billion academic, research, service and health care enterprise. The university generates nearly $80 million in state and local income tax, resulting in 5,000 additional jobs in health and research, and $367 million in external grants that resulted in 9,427 new jobs. UK has self-financed $1.3 billion of construction.
Dr. Capilouto said Kentucky has significant health disparities when compared to national levels. The state has unacceptable numbers of chronic, preventable disease. UK is uniquely positioned to serve the state with a physical presence in all 120 counties. It is one of eight institutions with programs in agriculture, pharmacy, engineering and medicine on a contiguous campus, and one of 22 institutions with NCI-designation, Clinical Translational Science Award and an Alzheimer’s Disease Center.
Co-Chair Kerr said the legislature is available and prepared to act in whatever means are necessary in the event of an infectious disease crisis such as Ebola. Dr. Michael Karpf, Executive Vice President for Health Affairs, University of Kentucky, said the state and Fayette County health departments have been vigorously planning a response to an Ebola situation.
Dr. Karpf explained that, upon arriving at the university 11 years ago, careful consideration was given to the direction of the medical complex and critical success factors. The conclusion was to focus on advanced subspecialty care--something that only major academic medical centers can do. The university worked with local regional providers from a public policy point of view as well as a business perspective. To be most effective, services should be provided on a local level from a medical and economic perspective. It was determined that critical success factors were efficiency, quality, and patient safety. Dr. Karpf said that, to be successful, UK must become a referral center for all of Kentucky and areas in West Virginia, Ohio, and eastern Tennessee. Over the past five years, the university has aggressively developed relationships with hospital systems and medical providers throughout these areas. The success is reflected in the number of annual discharges. The Case Mix Index from the Council on Teaching Hospitals indicates UK’s patient population is among the sickest populations of any academic medical center in the country.
Dr. Karpf discussed the fiscal impact of UK Healthcare’s expansion—a 95 percent increase in employee growth and 140 percent personnel expenses growth. UK should focus not only on its clinical program but on research as well, with emphasis on translational research. It must move the standard of care forward to offer cutting edge services when compared to the Mayo Clinic and Vanderbilt University. UK set out to have a National Cancer Institute-designated facility through facility enhancement and aggressive recruitment. In 2013, The Markey Cancer Center received a National Cancer Institute designation.
Dr. Capilouto said that Kentucky retained a top cancer research team that was prepared to leave the state, which would have taken with it $17 million in federal support and teams of researchers. He said UK lacks adequate, modern space needed to recruit and retain the next talented team specializing in health disparity research.
Representative Stone said the UK Extension office has been helpful in bringing medical care to rural areas of the state. He commended Dr. Mark Evers for appearing before the Tobacco Settlement Oversight Committee and for the progress he is making.
Responding to Representative Stone’s question, Dr. Karpf explained that the university has far exceeded initial projections in discharge increases. The current five year target is 40,000 to 42,000 discharges, making UK the 25th largest academic medical center in the country and the largest on a per capita basis.
Representative Palumbo noted the excellent care a family member recently received at the medical center.
Co-Chair Hall commended Dr. Karpf on his success at the University of Kentucky since his arrival.
Representative Denham expressed gratitude for the life-saving care he had received at the medical center.
In response to Representative McKee’s question about in-state students, Dr. Capilouto said Kentucky requires all students to take the ACT. This also serves to measure the success of the state’s education system. The UK College of Education’s P-12 Lab assists school districts to improve learning. Kentucky and many states have seen a decrease in college-age residents. Another factor affecting Kentuckians attending college is tuition cost. The university has had to increase the number of out-of-state students.
Representative Martha Jane King expressed pride that her son graduated from the University of Kentucky and the UK Medical School and is on staff to educate more doctors to serve in rural areas. In response to Representative King’s question, Dr. Karpf said there are several rural area initiatives including the Saint Clair Hospital and Morehead State University’s program for rural leadership and several family residency training programs.
Representative Stacy said that, during his time as a legislator, he has seen the University of Kentucky become relevant statewide because of its outreach. The university is putting resources where they are most needed. He commended Dr. Karpf’s work with the medical center and its success.
Responding to Representative Marzian’s question, Dr. Capilouto said multiple interventions are necessary to lower smoking rates in Kentucky.
Responding to Representative Riner’s question, Dr. Capilouto said prevention is the key to stopping Ebola; however, influenza is more of a concern. Dr. Karpf said it is important to follow public health measures as diligently as possible to limit the number of people infected with Ebola. The four hospital research facilities currently able to treat Ebola patients are specifically set up to handle unusual, level-four contagious diseases. While UK is as prepared to handle complex patients, it would require significant funding to become a level four facility.
Workforce Investment Update
Commissioner Beth Brinly, Department of Workforce Investment, Kentucky Education and Workforce Development Cabinet, gave an update on workforce investment in the state.
Commissioner Brinly said that the goal for the Department of Workforce Investment is to enhance the lives of Kentuckians by building a talent pipeline that will promote economic growth by combining workforce, education, and economic development methods that will increase continuous labor market progression. There is an educational gap for new jobs among the workforce in Kentucky with 49 percent of the workforce obtaining at least a high school diploma and 38 percent of new jobs requiring at least that amount of education. The demand for jobs that require some college education or an associate’s degree is 34 percent with only 28.4 percent acquiring that amount of education. A bachelor’s degree is required for 20 percent of new jobs with only 13.3 percent with that educational achievement within the workforce. About nine percent have obtained post-baccalaureate degrees, and about eight percent of new jobs require a post-baccalaureate degree.
One way to address the undersupply of individuals with the adequate education to meet the demand of new jobs is to strengthen the talent pipeline. Through assessment counseling and support services, team case management, and training and education, the Department of Workforce Investment intends to strengthen five statewide career sectors that will improve the state’s economic development: energy creation and transmission; health care and social assistance; business services and research and development; transportation, distribution, and logistics; and automobile and aircraft manufacturing. There are 11 regional-based areas that include such areas as the coal and agriculture industries.
The federal Workforce Innovation and Opportunity Act (WIOA) passed in July 2014. In July 2015, a majority of that law will go into effect with the remainder going into effect July 2016. There are four main tenets of the WIOA, including a streamlined workforce development system, greater value, better coordination, and improved outreach to disconnected youth. The workforce development system will be more customer-driven, and the number of people who serve on state and local workforce investment boards will be reduced. Steps will be taken to ensure that investments are actually effective, such as accountability procedures through annual reports for the state and local workforce investment boards. Better coordination will be achieved with local boards having joint administration costs, infrastructure costs, and regional planning. Certification of the local workforce investment areas will be based on management and performance and will also depend on regional collaboration. There will be improved outreach to disconnected youth through the allotment of funds going from 30 percent with the previous legislation to 75 percent under the WIOA. With the passing of the WIOA, disconnected youth will be reached through high school dropout recovery initiatives, programs like Accelerating Opportunity, and programs that will concentrate on individuals with disabilities entering the workforce.
The state and local workforce investment boards will see significant changes under the Workforce Innovation and Opportunity Act. Customers will make up a majority of the boards with members now including employee advocates, individuals from labor management councils, apprenticeship training coordinators, and representatives for individuals with disabilities. The boards will be play a bigger role in employer engagement by being responsible for knowing what is needed in their particular areas’ job markets and being responsible for selecting the service providers for their areas.
The three main areas of importance of the introduction of the WIOA for the Department of Workforce Investment are increased partnerships, work-based learning, and integrated education and training. Another significant component of the new legislation is the ability to allocate funds from adult categories of service to dislocated workers, such as those workers in eastern Kentucky affected by the coal mine losses. Regular funds will be able for incumbent worker training, which can eventually result in job creation of entry level positions in the workforce.
There will be increased partnerships under WIOA through High Impact Workforce Investment Boards, sector strategies, industry partnerships, career pathways, and an entrepreneurship partnership with the Kentucky Cabinet for Economic Development. There will continue to be a support for work-based learning programs focusing on apprenticeship, such as the TRACK program, earn and learn opportunities, high school outreach, and real world education and training. Integrated education and training will be achieved through the WIOA by programs such as Accelerating Opportunity and offering the opportunity for individuals to earn National Career Readiness Certificates.
The strategic plan for the WORKSmart program was updated in August 2013 after 22 of 25 action items were either put into effect or are in progress. One program underway is the Kentucky Career Center Network, which offers career counselors, workshops, and resources that are available locally. Also accessible are innovative job matching methods, such as individuals that apply for unemployment being alerted of job openings that require their particular skill set. There is also the Kentucky Skills Network, which is a collaboration involving the Kentucky Education and Workforce Development Cabinet, the Kentucky Cabinet for Economic Development, the Kentucky Community and Technical College System (KCTCS), and the Kentucky Labor Cabinet. This network efficiently works together to address the needs of businesses, companies, and industries by providing them with sector strategies, resources to strengthen their pipeline, and tactical planning for providing them with necessary resources. Commission Brinly noted the Work Ready Communities program, which gives individual counties the chance to cooperatively and methodically assist with economic and workforce development through soft skills development, National Career Readiness Certificates, digital literacy, and community involvement.
Commissioner Brinly discussed the National Governors Association Policy Academy on the Talent Pipeline, which made Kentucky one of 14 states to be chosen to participate in sharing ideas with other states regarding strategies and procedures. The four main areas are the vision, data analysis, partnerships, and resources and incentives. The vision is to utilize systematic planning with various partner agencies to expand the Work Ready Communities in the state, provide updates on the talent pipelines, and introduce Focus Explorer, which will be an online career counseling tool. Data analysis will be performed for the workforce, job training, and vocational rehabilitation to ensure that newly established programs are effective. Partnerships through the Kentucky Skills Network will be utilized as well as a partnership with the Kentucky FAME program, which uses training similar to that of an apprenticeship that can aid in producing adept workers for the state’s talent pipelines. Resources will be reallocated to different areas to make certain the vision is being achieved and to utilize funds that are needed for collaborative initiatives among agency partners.
Representative Palumbo commended Commissioner Brinly for using the phrase “family sustaining wages” during her presentation when referring to the segment on the National Governors Association Policy Academy on the Talent Pipeline and challenges faced in the state.
In response to Senator Wilson, the commissioner stated that the chief elected officials of workforce investment areas will be able to choose, competitively obtain, or maintain the fiscal agent for their area. She reiterated that the Workforce Innovation and Opportunity Act will go into effect July 2015. She stated that, after an audit of one of the workforce investment areas was performed and after a meeting with the chief elected official, the local board, and the fiscal agent, an action plan was developed and implemented when it was approved by the U.S. Department of Labor. Commissioner Brinly discussed how an area can be deemed an economic region. The law currently requires that all county judge executives agree upon whether an area can be considered its own economic area.
Senator Higdon expressed his appreciation for Commission Brinly and the great work that she has been doing. He said that he was pleased with Work Ready Communities program and the work-based learning programs.
Addressing a question posed by Representative Jenkins, Commission Brinly said that, through adult education programs such as Accelerating Opportunities and career counseling programs, individuals will be able to learn skills that will make them successful members of the workforce. She stated that the agency is aware that individuals with felonies are limited in career paths, but options concerning the juvenile justice system are being considered after the review of a program in New York.
Responding to Representative Thompson and his comments about the Close the Deal program, the commissioner stated that the program is needed for high students and their parents to be informed about resources and the necessary steps to be taken by a high school graduate to transition to college.
Representative Pullin complimented Commissioner Brinly and the Department Workforce Investment for their efforts to adjust to the Workforce Innovation and Opportunity Act.
Other Business
Co-Chair Kerr said the next meeting of the Interim Joint Committee on Economic Development and Tourism will be at 1 p.m. on November 20 in the Capitol Annex.
There being no further business, the meeting was adjourned.