Interim Joint Committee on State Government


Minutes of the<MeetNo1> 1st Meeting

of the 2005 Interim


<MeetMDY1> June 8, 2005


The<MeetNo2> first meeting of the Interim Joint Committee on State Government was held on<Day> Wednesday,<MeetMDY2> June 8, 2005, at<MeetTime> 9:00 AM, in Rooms 6, 7 and 8 of the Northern Kentucky Convention Center, Covington, KY. Senator Damon Thayer, Co-Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Damon Thayer, Co-Chair; Representative Mike Cherry, Co-Chair; Senators Walter Blevins, Jr., Julian Carroll, Carroll Gibson, Ernie Harris, Tom Jensen,  Alice Kerr, and Ed Worley; Representatives Eddie Ballard, Perry Clark, Tim Couch, Joseph Fischer, David Floyd, Danny Ford, Derrick Graham, J. R. Gray, Mike Harmon, Charlie Hoffman, Gerry Lynn, Paul Marcotte, Lonnie Napier, Stephen Nunn, Tanya Pullin, Tom Riner, Jim Wayne, and Brent Yonts.


Guests:  Senator Jack Westwood; Representative Jody Richards; Representative Larry Clark; Representative Rocky Adkins; Dr. James Vortruba, Northern Kentucky University; A. J. Schaeffer, Greenbaum, Doll, and McDonald PLLC; Gary Toebben and Steve Stevens, Northern Kentucky Chamber of Commerce; Mayor Irvin Calery, City of Covington; Kenton County Judge/Executive Ralph Frees and Deputy Judge/Executive Scott Kimmich; Mayor Thomas Guidugli, and Phil Ciafardini, City of Newport; Mayor Glenn Caldwell, City of Williamstown; Campbell County Judge/Executive Steve Pendery; Mayor Tom Holocher and City Administrator Bill Goetz, City of Ft. Mitchell; Mayor Everette Varney, City of Georgetown; Mayor Billy Bradford, City of Elmere; Mayor Paul Meier, City of Crestview Hills; Jim Hamberg, Southgate City Council; Mayor Diana Whalen, City of Florence; Bob Schrage, Northern Kentucky Area Development District; Mayor Gene Weaver and City Administrator Larry Klein, Ft. Wright; Mayor John Link, City of Edgewood; Mayor Claire Moriconi, City of Crescent Springs; Bill Scheyer and David Hahn, City of Erlanger; Sylvia Lovely, Neil Hackworth, Bert May, and Jerry Deaton, Kentucky League of Cities; Ron Wolf, Louisville Metro Government; Shellie Hampton, Kentucky County Judge/Executives Association; Richard Tanner, Kentucky Magistrates and Commissioners Association.


LRC Staff: Jamie Franklin, Joyce Crofts, Mark Mitchell, Joe Pinczewski-Lee, Mark Roberts, Stewart Willis, Alisha Miller, Karen Powell, Betsy Johnson, Bobby Sherman, David Thomas, Rebecca Mullins, Donna Holiday, Will Coursey, Brian Wilkerson, and Cheryl Walters.


Senator Thayer welcomed everyone and announced that the Committee was meeting in conjunction with the Interim Joint Committee on Local Government.


Senator Thayer next recognized Senator Jack Westwood, Kenton County Judge/Executive Ralph Frees, and Mayor Irvin Calery, City of Covington, for welcoming remarks.


The first order of business was discussion of Vision 2015--Northern Kentucky. Senator Thayer introduced Dr. James Vortruba, President of Northern Kentucky University and Co-Chair of Vision 2015, and Mr. A. J. Schaeffer, attorney with Greenbaum, Doll & McDonald and Co-Chair of Vision 2015.


Dr. Vortruba told the Committees that revenues from Northern Kentucky make up 14 percent of the state's economy. He noted that Vision 2015 is a year-long strategic visioning process that will create a 10-year blueprint for Northern Kentucky. Dr. Vortruba explained that a leadership team of about 85 persons representing a cross-section of civic, business and government stakeholders oversees the process. He added that Vision 2015 will focus on keeping leaders and young people in the area, will be open to everyone, and that the emphasis will be on getting under-40 aged people involved.


Dr. Vortruba stated that five action teams will address critical issues related to:  (1) economic competitiveness; (2) education excellence; (3) urban renaissance; (4) effective governance; and (5) livable communities. After briefly describing the work of each of the action teams, he told the Committees that Northern Kentucky University is very involved with Vision 2015, as is Gateway Community and Technical College and Thomas Moore College, but that the legislature's help will be needed as well.


Mr. Schaeffer told the Committees that each of the five action teams are co-chaired by members of LEGACY, Northern Kentucky's young leaders group. He stated that Northern Kentucky is looking to measure themselves by how they compete against other developing regions across the country. Mr. Schaeffer noted that the teams are now beginning to identify the areas of focus, which they believe will require heightened attention and improvement if Northern Kentucky is to out-perform that regional competition.


Mr. Schaeffer explained that the economic competitiveness team is focused on increased marketing and branding of the region; promoting business clusters that offer the best opportunity for this region to focus on its economic strengths and to draw new ones; and generating and mentoring capital for small businesses and creating an electronic community (taking advantage of advances in technology). He said that the effective governance team is looking at taxation revenue issues; the delivery of services in an effective way; the structure of government; and how government communicates. Mr. Schaeffer stated that the education team is focused on making Northern Kentucky a global model for education. He noted that postsecondary education and the funding for that is an important piece, as is the transition between various phases of education from early childhood development to elementary school and beyond. Mr. Schaeffer lastly mentioned that the urban renaissance team and the livable communities team have coined the phrase "walkable urbanity" and are focusing on developing a community that is walkable and accessible, a place where people want to live.


Representative Pullin commented that Vision 2015 is recognized nationally in its efforts, and she offered help from her area in their endeavors.


Representative Riggs asked how they plan to deal with unorganized sprawl. He said those people expect the same services. Mr. Schaeffer replied that they plan to utilize more compacts and encourage local governments to work together.


Representative Wayne asked what the current unemployment rate was in Northern Kentucky. Mr. Schaeffer replied that the unemployment rate was 4.5 percent.


Representative Wayne also asked what the poverty rate was in Northern Kentucky. Mr. Schaeffer said he did not have that information with him but would get it.


Representative Wayne asked what the number of homeless was in Northern Kentucky. Mr. Schaeffer stated that the Homeless Coalition was working on those figures and that he would see that Representative Wayne received them.


Representative Wayne asked what percentage of adults in Northern Kentucky have college degrees. Mr. Schaeffer said he would get that information


Senator Carroll commented that we do not want to subsidize local governments without well-planned efforts so that things will be most effective and efficient. He asked how far down in the state does their Vision 2015 include. Dr. Vortruba said Vision 2015 also includes the counties of Grant, Oldham, and Pendleton.


Senator Thayer thanked Dr. Vortruba and Mr. Schaeffer for taking the time to address the Committees.


The next item of business was discussion of urban issues. Senator Thayer introduced Mr. Gary Toebben, President, and Mr. Steve Stevens, Senior Vice-President of Public Affairs, Northern Kentucky Chamber of Commerce.


Mr. Toebben told the Committees that Kentucky has nine metropolitan areas and 17 micropolitan areas. He noted that Kentucky is not competitive in attracting new high paying jobs in both its metropolitan and micropolitan areas.


Mr. Toebben stated that tax policies, at the state and local level, need further modification. He said state tax modernization was essential. Mr. Toebben stressed that more needs to be done to attract new high paying jobs which would generate more revenue for state and local government. He also pointed out that spending policies need modernization if Kentucky is to compete for high paying jobs.


Mr. Toebben explained that local communities are very dependent on the state for securing all infrastructure funding. He noted that state funding formulas are more important in Kentucky than most other states. Mr. Toebben stated that current funding formulas diffuse tax revenue from populated areas. He also noted that Kentucky cities have limited resources to compete with cities in other states.


Mr. Toebben suggested the following state policy options:  (1) further modernize state tax policies; (2) modernize local tax policies; (3) modernize spending formulas to create an economic development strategy that makes Kentucky's cities more competitive; (4) shift more decision-making ability from state to local governments; and (5) encourage privatization and consolidation of services at the state and local levels.


In closing, Mr. Toebben told the Committees that all of Kentucky will benefit from more high paying jobs and increased revenue to meet the demands on state and local government.


Representative Crimm told Mr. Toebben that this was one of the best competitive, economic pictures he has seen, and thanked him for bringing it before the Committees.


Representative McKee commented that we have to be careful not to create a turf battle between the rural and urban areas. He suggested that we move cautiously to make sure the rural areas do not suffer as we try to help the cities.


Representative Wayne commented that he felt Dr. Coomes' report was somewhat biased.


Representative Hoffman commented that there should be the ability of local governments to enact taxes.


Senator Thayer commented that one of the reasons that Representative Riggs and he agreed to have Mr. Toebben make this presentation today was because they feel the need to continue to shine a light on these metropolitan issues. He noted that there is a rural issues task force, but as of yet, there is no metropolitan issues task force.


Representative Riggs commented that he sponsored legislation during the 2005 session that would create a Metropolitan and Micropolitan Issues Task Force. He noted that the legislation passed the House but failed to pass the Senate.


Senator Carroll commented that we have got to change the ways we are dealing with expenditures at the local level. He said we need to give local governments more flexibility on how to raise and use their local revenues. Senator Carroll noted that the cost of health care and health insurance for public employees is breaking Kentucky's state and local budgets, especially Medicaid. He added that we need to find out how to lower the number of people on Medicaid and reduce other health insurance costs.


Representative Marcotte agreed with Senator Carroll that local governments need more flexibility.


Senator Thayer thanked Mr. Toebben for appearing before the Committees.


Lastly, Senator Thayer recognized Ms. Sylvia Lovely, Executive Director of the Kentucky League of Cities. Ms. Lovely told the Committees that two mayors wished to address them. She introduced Mayor Thomas Guidugli, City of Newport, and Mayor Glenn Caldwell, City of Williamstown.


Mayor Guidugli first thanked the legislature for passing legislation that would enable cities to use tourism and historic property tax credits. He told the committees that they also appreciate the funding for city law enforcement and road maintenance and repair that was given to the cities.


Regarding brownfields tax credits, Mayor Guidugli pointed out that this program will hopefully bring additional revitalization back to the urban areas. He said the General Assembly deserves a big thanks for this provision in addressing troubled properties.


Mayor Guidugli also thanked the legislature for their work on the Renaissance Kentucky program. He noted that while the Renaissance Kentucky program was only funded at $2 million this year, the cities are very pleased that this much needed program is still alive. Mayor Guidugli said he hoped that funding of the Renaissance Kentucky program can be restored to at least its original $6 million level in the future.


Mayor Guidugli told the Committees that he also wanted to bring their attention to the work of a group of cities of the second class, which included Newport and Covington. He noted that this group is forming a coalition of cities of the second class to come together to work for their common interest. Mayor Guidugli told the members that they are in the initial states of organizing this group and hope to come back before the Committee later in the summer to discuss some issues of particular concern to these cities.


Mayor Caldwell told the Committees that cities need more options for funding, especially for health care, police and fire. He pointed out that cities are also having difficulty dealing with unfunded mandates.


There being no further business, the meeting was adjourned at 10:50 a.m.