Interim Joint Committee on State Government


Minutes of the<MeetNo1> 1st Meeting

of the 2013 Interim


<MeetMDY1> June 19, 2013


Call to Order and Roll Call

The<MeetNo2> first meeting of the Interim Joint Committee on State Government was held on<Day> Wednesday,<MeetMDY2> June 19, 2013, at<MeetTime> 2:00 PM, in Covington, Kentucky, at the Northern Kentucky Convention Center.<Room>Cov The meeting was a joint meeting with the Interim Joint Committee on Local Government. Senator Joe Bowen, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Joe Bowen, Co-Chair; Representative Brent Yonts, Co-Chair; Senators Walter Blevins Jr., Ernie Harris, Christian McDaniel, Morgan McGarvey, Gerald Neal, R. J. Palmer II, Albert Robinson, Dan "Malano" Seum, and Damon Thayer; Representatives Dwight Butler, Leslie Combs, Joseph Fischer, Derrick Graham, Kenny Imes, Martha Jane King, Brad Montell, Tanya Pullin, Jody Richards, Tom Riner, Bart Rowland, Kevin Sinnette, Diane St. Onge, John Will Stacy, John Tilley, Ken Upchurch, and Jim Wayne.


Guests: Representative Greg Stumbo, Speaker of the House; Ed Hughes and Laura Kroeger, Gateway Community and Technical College; Steve Pendery, Campbell County Judge/Executive; Steve Arlinghaus, Kenton County Judge/Executive; Gary Moore, Boone County Judge/Executive; Kenton County Sheriff Chuck Korzenborn; City of Taylor Mill Mayor Dan Bell; Former City of Covington Commissioner Jerry Stricker; Tom Bennett, State Auditor’s Office; Paula Smith, Kentucky Farm Bureau; Karen Hargett, Transitions; Cara Stewart, Kentucky Equal Justice Center, Covington; Richard Harrison, Northern Kentucky Water District; Don Pasley, Kentucky Transportation Cabinet; Bert May, Kentucky League of Cities; Rhonda Whitaker, Duke Energy; and Ted Heckmann, Cincinnati Bell.


LRC Staff: Mark Mitchell, Joe Pinczewski-Lee, John Ryan, Kevin Devlin, Alisha Miller, Karen Powell, and Cheryl Walters.


Opening Remarks and Welcome

On behalf of its delegation and the community, Dr. Ed Hughes, President of Gateway Community and Technical College, welcomed the committees to Northern Kentucky. The last two years have been the largest graduating classes in the history of the ten year old school. Education and training are the heart of solutions to the issues of pension, revenue, and healthcare. Sixteen community colleges of the Kentucky Community and Technical College System, of which Gateway is one, are about doing that work. Putting people back to work in high wage, high demand jobs will move the state forward. Because of legislation passed by the General Assembly, the school is developing a master plan to repurpose seven buildings in Covington and to move the campus. Only 15 percent of the adult populations aged 25 to 64 have a college credential in the area, while the national average is 31 percent. The reason for the move to the population center is that Northern Kentucky, as all communities in Kentucky, must improve and be prepared to thrive. The move is more an economic development than an educational project.


Representative Riggs commented that Dr. Hughes’ remarks regarding the prosperity and growth are very positive. That the college graduation rate is too low is something the legislature must keep in mind as it makes decisions. Gateway is doing very well, and Dr. Hughes deserves commendation for his leadership.


Representative Yonts commented that the last time he was on the Gateway campus, Dr. Hughes talked about the needs for more manufacturing students, which is important since the country is trying to bring manufacturing back. Gateway plays a big role in that educational effort.


Representative Wayne commented that he has been an advocate for smart growth and limiting urban sprawl because urban sprawl is so inefficient, and it costs the taxpayers much more money to service sprawl areas than it does to reuse areas. He complimented Dr. Hughes for his forward thinking relating to the relocation of the campus and trying to develop an urban core that is vital and will grow and prosper.


Senator Bowen commented that it was very encouraging to hear that there is a collaborative effort with the community and the college.


State and Local Issues confronting Kenton, Boone, and Campbell Counties

Referring to a resolution of the Kenton County Fiscal Court, Judge Steve Arlinghaus, Kenton County Judge/Executive, said that Kenton County opposes the use of tolls as a funding mechanism for the reconstruction and/or replacement of the Brent Spence Bridge. The Brent Spence Bridge project is estimated to cost $2.5 billion. The bridge and the renovation of the existing bridge will cost over $800 million. The Ohio-Kentucky-Indiana Regional Council of Governments (OKI) estimates the daily bridge user ratio of Kentucky versus Ohio residents at 65:35.


The residents and business owners of Kenton County will be severely harmed if they are expected to carry the brunt of any toll because of the county’s proximity to the new bridge, and considering that its population of 160,000 residents (which is less than eight percent of the total population living within the OKI regional network of nine counties) will result in a significantly disproportionate cost per capita than any other county within the Greater Cincinnati and Northern Kentucky regions.


Residents in surrounding counties in Kentucky, such as Boone County to the west of Kenton County, have a bridge already connecting them to Cincinnati, Ohio via I-275 at Dearborn County, Indiana. Also, Campbell County connects directly to downtown Cincinnati via I-471 through Newport, Kentucky, and also connects to eastern Hamilton County via the Combs-Hehl Bridge at I-275. Those affected residents of each respective neighboring county will be able to avoid tolls.


Judge Arlinghaus said that the heroin problem in Northern Kentucky appears to be far greater as opposed to anywhere else in the Commonwealth. The Kenton County Detention Center averages about 600 inmates per day and is at capacity. About 80 percent are there because of drug-related issues at a cost of $23,000 per year per inmate. The numbers for Campbell County, and to a lesser degree, Boone County, are similar.


There is a shortage of beds in residential treatment centers in Northern Kentucky. Louisville has 787 beds and Lexington has 467 beds. Northern Kentucky has 199 beds, which is another example of an inequity in Northern Kentucky that needs to be studied.


Judge Arlinghaus pointed out that there are three areas of state funding inequities. The first is state funding for higher education per student in Kentucky. The University of Kentucky and the University of Louisville receive approximately $12,000 per student; Morehead State University receives $5,935 per student; Murray State University receives $5,994 per student; Eastern Kentucky University receives $5,469 per student; Western Kentucky University receives $4,578 per student; and Northern Kentucky University receives $3,987 per student. Northern Kentucky is the third largest populated region in the state, which produces a large amount of revenue for Kentucky and helps to keep the state fiscally afloat. There needs to be some equality in the sharing of the educational revenue that is generated.


The second issue involves state contract dollars for behavioral health and substance abuse per capita. Comprehend receives the most with $38.57 per capita and North Key (Northern Kentucky) receives the least with $16.36 per capita. Again, Northern Kentucky is last.


The last issue involves the State House redistricting proposal, which is another example of Northern Kentucky being treated differently than the rest of the state. Northern Kentucky scored very high on placing the maximum number of people put into a district that could possibly be placed in a district, minimizing its ability to be fairly represented in Frankfort.


In response to a question from Senator Bowen regarding the sharing of cost for the Brent Spence Bridge between Kentucky and Ohio, Judge Arlinghaus stated that he did not have the figures for an equitable breakdown.


Representative Tilley commented that since the passage of 2011 HB 463, progress is being made to get 1,500 additional treatment beds throughout the state. The treatment beds are subject to the jurisdiction of the Department of Corrections and do not include faith-based treatment beds. The bill encourages and incentivizes faith-based treatment that would not be the private treatment beds that are escalating every day. Also, community mental health centers have a contract with the department to provide community-based treatment, which can be more cost-effective.


Judge Steve Pendery, Campbell County Judge/Executive, said that Northern Kentucky is succeeding in economic development. The area has led the state in the past 15 to 20 years in terms of job creation. It is the only region in the state directly under the influence of a big city nearby in a neighboring state. Even with all of the successes of the state and Northern Kentucky, there are some worries that have to be mentioned. In the last four or five years, there have been steps taken in the surrounding states to improve their economic competitiveness. Kentucky does not have some of the appeal of Florida or California. Kentucky must have an infrastructure and a tax climate that are competitive and attractive to people. Kentucky needs to be concerned about what the surrounding states are doing. For example, Ohio does not have a corporate income tax. The effect on Northern Kentucky was rather direct in the last couple of years by losing a Fortune 500 company, another large employer of several hundred people out of the City of Covington. In a recent competition over an advanced manufacturing firm, Northern Kentucky lost to Ohio. The sum total of just those three examples is over 1,000 jobs, with millions of dollars of tax revenue that come to Northern Kentucky and go to the state.


The tax reform commission has done good work but needs to go a step beyond and establish the goal of doing something that places Kentucky in the lead among states. It should catch the attention of prospective employers in certain categories that are meaningful and give Kentucky something convincing to sell.


Judge Pendery said that the Northern Kentucky Convention Center needed to be expanded because the groups that utilize the convention center have grown. It is the only convention center in the state that covers its own operational expenses and one of the few in the United States to do so.


Judge Gary Moore, Boone County Judge/Executive, said that there used to be regular allocations for infrastructure improvements of water and sewer, which has not been seen recently. In a growing region like Northern Kentucky, it has been a huge struggle for them to continue to try to get water and sewer service to unserved people in their communities. About half of Boone County’s land mass does not have public water, and thus the county is trying to do more with less. Boone County is contracting services out, which is much more efficient. It has been fortunate that it has seen job growth in the private sector even though it is losing companies to Ohio.


Judge Moore said that Sanitation District No. 1 is the sewer and storm water utility that covers all three counties in Northern Kentucky. Northern Kentucky has been under a consent decree since 2005 and has 20 years to meet the elements of the decree. Between now and 2025, Northern Kentucky must spend about $3 billion to meet all of the requirements, and the number is growing. The rate increases over the last several years have been high but have been required to meet this unfunded mandate from the Federal EPA, Kentucky EPA, and the Kentucky Division of Water. Meeting the requirements and yet allowing residents to pay affordable utility fees in that time frame is impossible. Northern Kentucky needs more time to get it done and needs assistance from the General Assembly.


In a day when local governments are seeing less revenue from federal and state government, local governments need more tools to fend for themselves. Some examples of this might be getting rid of obstacles that are in the way that would prevent the merging of certain units of government, combining departments across county lines, or cities combining services.


In response to a question from Senator Bowen, Judge Pendery said that local taxes in Northern Kentucky are less than those in Cincinnati.


In response to a question from Senator McDaniel, Judge Pendery said that $50 million is needed for the expansion of the Northern Kentucky Convention Center.


In response to a question from Senator McDaniel as to what action the legislature should take regarding Sanitation District No. 1, Judge Moore said the area needs help playing defense against the new rules that make it tougher for local communities to meet requirements.


There being no further business, the meeting was adjourned at 3:40 p.m.