Call to Order and Roll Call
The meeting of the Tobacco Settlement Agreement Fund Oversight Committee was held on Wednesday, December 2, 2015, at 10:00 AM, in Room 129 of the Capitol Annex. Senator C.B. Embry Jr., Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator C.B. Embry Jr., Co-Chair; Senators Paul Hornback, Dennis Parrett, Robin L. Webb, and Whitney Westerfield; Representatives Mike Denham, Tom McKee, Terry Mills, and Jonathan Shell.
Guests: Mr. Roger Thomas, Mr. Joel Neaveill, Mr. Bill McCloskey, Ms. Angela Blank, Ms. Beth Herbert, and Dr. Luther Hughes, Governor’s Office of Agricultural Policy; Dr. Alison Davis and Mr. James Mansfield, Community and Economic Development Initiative of Kentucky; Mr. Van Ingram, Ms. Heather Wainscott, and Ms. Amy Isaacs, Kentucky Agency for Substance Abuse Policy.
LRC Staff: Lowell Atchley, Kelly Ludwig, and Kelly Blevins.
The October 7, 2015 minutes were approved, without objection, by voice vote, upon a motion by Senator Parrett, second by Representative Mills.
Governor’s Office of Agricultural Policy
Mr. Roger Thomas, Executive Director, Mr. Joel Neaveill, Chief of Staff, and Mr. Bill McCloskey, Director of Financial Services, Governor’s Office of Agricultural Policy (GOAP), testified about project funding decisions made by the Agricultural Development Board (ABD) during its October and November meetings.
GOAP officials summarized funding allocations for the previous months under the County Agricultural Improvement (CAIP), Deceased Farm Animal Disposal Assistance, and Shared-use programs.
Major statewide projects summarized included: Kentucky State University, Frankfort, $990,000 in state tobacco settlement covering two years for a program to provide mini-grants that will assist small farmers and producers with limited resources; Knotty Corner Cafe LLC, Knott County, $5,000 in state funds to purchase locally grown and raised produce from farmers for a cafe and market; Kentucky Center for Agriculture and Rural Development (KCARD), Elizabethtown, $700,000 in state tobacco settlement funds granted for a two-year span to enable KCARD to deliver technical assistance and provide educational opportunities for agriculture-based and rural businesses; Russell County Cattlemen’s Association, Russell County, $20,000 in Russell County funds to initiate a heifer production program for 4-H and FFA youth.
Responding to Representative McKee, Mr. Neaveill described the work of KCARD. He told the representative that the organization has existed for several years, initially formed as the Center for Cooperative Development. He also said KCARD staff are doing some work currently in sections of Eastern Kentucky, for example, a farmers’ market in Pikeville.
Mr. Thomas pointed out that KCARD has been able to leverage its tobacco funds grant with federal funds, thereby increasing its overall funding. Senator Parrett said he was familiar with the organization. He mentioned the work that KCARD did in relation to the formation of an Elizabethtown farmers’ market.
Senator Parrett asked for more information on the Knotty Corner Cafe project, which received tobacco settlement funds even though Knott County does not ordinarily receive an allocation of agricultural development funds. Mr. Rogers described how the county had received tobacco funds several years ago as part of a drought relief program. Mr. Neaveill pointed out, too, that aspects of the Kentucky Proud marketing program, which receives Master Settlement Agreement (MSA) funds, benefit businesses with no direct connection to the tobacco settlement funding system.
As the GOAP officials ended their report, mentioning the latest county council account ledger sheet, Representative McKee commended the work that county councils do in granting funds at the local level.
Mr. Thomas, who had served as Executive Director of the GOAP for about eight years, expressed his appreciation to the committee and the panel’s support of the Agricultural Development Fund. He also mentioned the GOAP staff and thanked the Governor for allowing him to serve.
Subsequent to Mr. Thomas’s remarks, the committee adopted a resolution in his honor and commending his dedication and service to the state’s agriculture community. Representatives McKee and Denham, and Senators Webb, Parrett, and Embry lauded the GOAP Executive Director’s work.
Agricultural Development Board Investments Evaluation
University of Kentucky professors Dr. Alison Davis and Mr. James Mansfield presented the results of an evaluation of the Agricultural Development Board tobacco settlement investments from 2007-2014. The evaluation, which following an earlier study covering 2001-2007, looked at the impact of tobacco settlement funds grants and loans in three areas – state-funded projects, the CAIP program, and the Agricultural Finance Corporation, which is primarily a farm loan program.
The goal of the evaluation was to assess the effectiveness and impact of the Agricultural Development Board’s investments between 2007 and 2014. Dr. Davis summarized some of the findings in the report, mentioning that every dollar invested in the state-funded projects yielded $2.03 in economic impacts. The highest impact was seen in the marketing and promotion part, $3.07 for every dollar put in. According to the report, the board invested $198 million in programs and projects during the study period, resulting in 465 products created and 77 markets either created or expanded. The board invested $42 million in state and county projects, an investment that has resulted in an estimated $86 million in additional farm income and 708 new or expanded jobs. Other highlights of the report were that 33,958 farmers were estimated to have been affected by the state-funded projects, of which 17,617 current or former tobacco growers.
Under the county programs, more than $100 million was invested with over 61,000 people participating. As for the Agricultural Finance Corporation’s loan program, a beginning farm loan program was highly regarded, according to the report.
The report made several recommendations in each aspect of the three investment areas.
Dr. Davis indicated it she enjoyed meeting project directors and the expert panels who helped evaluate impacts. She noted that people said Kentucky would not be where it is without the Agricultural Development Fund. She talked about the envy that exists regarding the initial legislation (House Bill 611) establishing the Agricultural Development Fund and what the endeavor has done for agriculture in the state.
Senator Hornback praised the report and asked about the agricultural diversity that could be accomplished in the state, considering that the federal tobacco buyout has closed out. Dr. Davis responded that, overall, farmers in the state are better off and the buyout funds are not as critical as they once were. Mr. Mansfield cited the growth of the livestock industry in the state the overall production improvements, better genetics.
Senator Webb and Representative Denham commented on a recommendation in the report that tobacco production history should not be a significant factor in the Agricultural Development Fund program requirements. Both talked about the impact that tobacco production had on their region of the state and that the impact still exists. Dr. Davis responded that Eastern Kentucky is under-represented in the distribution of projects. She said the group tried to take a “holistic view” in the overall report, looking at the entire state. She mentioned one recommendation: that the board should consider publicizing the availability of the tobacco funds through a request-for-proposal approach.
Responding to Representative McKee, Dr. Davis described a star scoring chart that was included for state-funded projects. According to Dr. Davis, a lot of the projects earning two stars (the top projects earned five) have since closed.
Kentucky Agency for Substance Abuse Policy (KY-ASAP) Report
Mr. Van Ingram, Executive Director, Ms. Heather Wainscott, Branch Manager, Kentucky Office of Drug Control Policy, and Ms. Amy Andrews, KY-ASAP Program Coordinator, presented the annual report of the KY-ASAP, which operated on a $1.7 million budget in FY 2015. KY-ASAP awards grants to local boards in most counties that work in combatting drug, alcohol and tobacco use.
In opening remarks, Mr. Ingram said that last year, KY-ASAP was facing a potential funding cut, but funding was restored by virtue of legislation in the 2015 Regular Session, plus the agency received additional appropriations because of the Senate Bill 192, the heroin bill that passed in the same session. He indicated the Senate Bill 192 funding allowed the agency to establish an additional grant program for counties to fight drug abuse.
Ms. Wainscott described the county programs, made mention of regional trainings that have been conducted, discussed a prescription drug disposal endeavor, talked about the agency’s collaboration with the Partnership for a Drug-Free America, and made note of a drug-free communities support program.
Responding to Senator Embry, Ms. Andrews explained that there have been conversations with local officials in two counties that have not established local boards, Harlan and Elliot. Senator Webb commented that she would talk to officials in Elliot County about the KY-ASAP agency.
In a response to Representative Denham, Mr. Ingram explained KY-ASAP has seen positive results related to the overdose situation, but the use of hydrocodone, an opioid pain medication, remains a persistent problem. He said there needs to be a “national conversation” on hydrocodone abuse.
Responding to Representative Mills, Mr. Ingram indicated the Kentucky KASPER electronic prescription reporting system has been successful. Since Kentucky established its program, 11 other states have established similar programs.
Mr. Ingram, responding to Representative McKee, described the criteria used in granting funds to individual counties.
Documents distributed during the meeting are available with meeting materials in the LRC Library. There being no further business, the meeting was adjourned.