overnor Andy Beshear is seeking a second term leading the commonwealth in 2023, and he has big plans for Kentucky’s future. He is determined to see the commonwealth outperform the record-breaking levels of economic activity it has enjoyed for the past two years. In the following interview, he explains how that will happen.
2021-2022 represents the best two-year period of economic growth in Kentucky’s history based on private-sector investment and job creation. How has the commonwealth been so successful?
Gov. Andy Beshear: First of all, we work together. Local officials and state officials work to identify, invest in and market sites to companies looking to be a part of Team Kentucky. Second is speed to market. We can get a facility built and up and running faster than anyone else in the country. What that means is while incentives are important, if you’re in operation three months earlier in Kentucky than you are in any other state, you have a huge advantage.
When we look at how much different industries are changing, a company’s competitive advantage or disadvantage depends on, once it decides to build a facility, how quickly it can do so. Third is a direct relationship with the governor’s office and with the rest of state government. We build long-term relationships. I think we just announced the 13th expansion of North American Stainless since 1990. Once a company locates here, we work year in and year out to figure out how to grow their business.
Next is workforce. Talk to the companies that have located here and these companies talk to each other. We have hard-working people, and many of them work at the same facility for 40-plus years. The final part is there is no politics in our economic development and no politics in our workforce. We ensure that a company doesn’t deal with some of those things that they may have to in other states or nationally. Here we believe that a job isn’t Democrat or Republican, red or blue. It’s just really good for our families.
Kentucky has faced no shortage of challenges in recent years. From the COVID-19 pandemic to a tornado outbreak in Western Kentucky to devastating flooding in Eastern Kentucky. How has Team Kentucky overcome these challenges to establish record economic momentum?
Gov. Beshear: In Kentucky, we’re really good people. If you ever lose your faith in humanity, just watch how people act after a natural disaster. We’ve been through a lot with the pandemic, the worst tornadoes in our history, the worst flooding in our history and ice storms. Yet here we are moving forward at a greater pace than we’ve ever seen before, coming off the two best years of economic development in our history and having the lowest unemployment rate in our history I think three separate times last year. And we’re getting the biggest investments that some have ever seen from companies whose names are known throughout the world. I think part of it is when people tuned in after the tornadoes and the flooding, what they saw were incredible people working together, helping one another. I’ve been very grateful to see the number of companies — especially in the west because it happened about a year ago — that have invested in new jobs there.
We’ve now announced new jobs in virtually every county that was hit hard by that tornado outbreak — hundreds of new jobs in Graves and Muhlenberg counties. The $1 billion Ascend Elements plant [which will recycle EV batteries and produce sustainable battery materials] in Hopkinsville is going to be 26 miles from Dawson Springs. That’s my Dad’s [former Governor Steve Beshear] hometown, 70% of which was wiped out. The two go hand in hand. We committed to rebuilding, and the people could feel that. But you also need a reason to stay. So we worked extra hard on talking to companies that have an open mind and are looking at different places. But how about not only going to a place that has an amazing workforce but doing something really special to help a community rebuild? We’ve seen incredible buy-in from companies wanting to be a part of that.
The commonwealth has established itself as a national leader in the emerging electric-vehicle sector. How did the state get to this point and where does it go from here?
Gov. Beshear: Our EV investments are thrilling. The whole state from east to west is excited about a bright future, knowing there are likely still hundreds of thousands of jobs to come for the supply chain and maybe even some more battery manufacturers. We got here by convincing Ford, SK, Envision and others that this was as important to the future of Kentucky as it was to their companies. It is critical that these facilities get up and running for the future of the companies, but it’s also transformational. When we look at how many automotive jobs we already had, we had to get a large part of the electric vehicle battery manufacturing markets to ensure that those jobs would continue in the future. We think a whole lot about the new jobs, which are wonderful.
“There is no politics in our economic development and no politics in our workforce. We ensure that a company doesn’t deal with some of those things that they may have to in other states or nationally.”
But what we have seen for instance in the shifting energy industry is that if you are not on the cutting edge, it’s not just about whether you win, it’s what you can lose if you are not a part of that next generation. It was great work by local officials, great work by our economic development team and, frankly, I gave them my word that we would get it done and that this would be one of the most important things to me as governor. Every two weeks, every one of my cabinet secretaries who has any type of agency remotely related to these major projects has to report if they are on time and on task and that every one of those major projects is on schedule.
Kentucky is part of three regional hydrogen hub initiatives taking shape. Will the commonwealth have a specific role to play in these?
Gov. Beshear: We see hydrogen as a viable future industry. In fact, Toyota in Georgetown is already working to build hydrogen cells. Hydrogen is used at the Marathon Petroleum facility as well. We believe that the future, whether it is automotive or otherwise, is going to have multiple sources of fuel and power. We have to be at the forefront of all of those sources to ensure that we have a foothold in whatever that industry of the future is. We held our first hydrogen summit in Kentucky recently and it was a packed room. We are enthusiastic and optimistic about the potential future of hydrogen.
Bourbon and spirits is a signature industry in Kentucky with a longstanding tradition of success. What positioned the industry for what resulted in the best year on record for investment and job growth in 2022?
Gov. Beshear: Last year was by far the biggest year for investment in bourbon with over $2 billion invested. That’s more than half a billion dollars more than the closest previous year. It’s a couple of things. First, one of the first tasks I took on as governor was to work to eliminate tariffs by the EU that were significantly harming the exports of bourbon. Thankfully, Gina Raimondo, the former governor of Rhode Island and the current U.S. Secretary of Commerce who is a friend of mine, understood how critical this was and the inordinate amount that tariff hit Kentucky and almost nowhere else. She worked really hard to ultimately eliminate those tariffs, and we are grateful for that. A number of other steps have been taken and we have worked with the bourbon industry every step of the way. Our office is very close to the industry. During the pandemic, those companies made hand sanitizer. We were the only state that never lacked hand sanitizer, and it smelled delicious.
As more companies locate and grow in the commonwealth, availability of sites and buildings becomes an area that needs to be considered. How is Kentucky addressing that need?
Gov. Beshear: We have a great inventory, but we learned an important lesson from the Glendale site, which is where Ford and SK On are building the largest battery plant in the history of planet Earth. We learned that we have to invest. You can’t be static, and the state has an important role in that. In fairness, other areas in Kentucky deserve to have their Glendale. In this budget we asked the legislature, and they agreed, for a product development initiative pool of dollars where every county has dollars to either purchase new land, upgrade an existing site, put in a build-ready pad or build a spec building. It is a great program where we are actively working on that next set of sites. The program allows for small and medium sites to grow, but it also allows extra work for the creation of megasites.
We are working every day in any county to see what is that next several-thousand-acre site. We have several. And we have more that are possible. We are fortunate to have land for some of the biggest investments that require the largest sites. We’ve learned a lot about what it takes, the infrastructure that is needed and how to schedule how to get that done. Also, there was a second pot of funds provided to help close deals. When there is just that one piece of infrastructure, such as an access road or an upgrade in capacity on water that’s needed, and but for that a company would sign, we have the opportunity now to close that deal.
The workforce continues to be a major topic among growing employers across every major industry. How does Kentucky address those needs to ensure residents have the right skills for the jobs of the future?
Gov. Beshear: Companies from across the globe are showing right now that they have confidence in Kentucky’s workforce and that we can get the necessary workers. You don’t have back-to-back best years of economic development without that confidence. We just announced over a half-billion dollars of new investment in January 2023. We are being proactive. First, we have to make sure that we don’t lose one single young person as there is a good job out there for everyone. We have invested a record $280 million in renovating and upgrading our career and technical programs in our high schools. Those career and technical centers connect directly to employers in the community. Often they have workers and managers and others come in and do the training for the high schoolers and those who are not looking to go on to a two- or four-year program — they can get out of one of these centers already fully trained and make a really good living right off the bat.
The second thing we’re doing is ensuring our people are healthy enough to go to work. Some people on disability with just a little bit of extra help would be back in the workforce. So we expanded Medicaid coverage to vision, dental and hearing. We want someone to go to work but they have to be able to see well enough to drive to work. Let’s get them a pair of glasses. They want to be safe on a job site — let’s get them a hearing aid. We lose too many work hours to emergency dental requirements across the United States so this from a business standpoint is a no-brainer.
Gov. Andy Beshear participates in National Bourbon Day celebration in Bardstown on June 2022.
Third, we are getting people better. Many people have suffered from addiction, for example. We’ve launched a number of programs that help people once in recovery have the tools they need like recovery housing and a second chance employment program to get people back into work. It provides workers that truly appreciate the opportunity in front of them and provides the best support to keep them in recovery. We’ve launched a prison-to-employment pipeline where willing employers have plenty of time to get to know an employee. It not only fills the jobs they have but having a good job is the number one thing that keeps people from committing another crime in the future. It helps with public safety.
The last piece, which I am pushing pretty hard, is childcare, which is a major challenge and keeps people out of the workforce. The fastest and most effective way that also provides the most long-term gains to begin to address that is universal pre-K. That would be every four-year-old being kindergarten-ready and most likely young parents being able to get back to work. We are pushing that in our General Assembly, we have plenty of money to pay for it, and my hope is that they will see the light and pass it.
How would you characterize the state of Kentucky’s fiscal health?
Gov. Beshear: Our fiscal house has never been in better shape. We are going to have our four largest budget surpluses in our history in my first four years as governor. We have the largest rainy-day fund in our history. It is now $2.5 billion to $2.7 billion, and in this fiscal year alone we are likely to have $2 billion extra as opposed to what we are spending. Two out of the three major bond rating agencies have upgraded our economic outlook to positive. We have some of the lowest unemployment we have had in our history and last year we broke that record three-plus times. Kentucky is healthy, the economy is booming and we are thrilled about the future.
Gov. Beshear participates in 2022 Horses and Hope event, which provides breast cancer awareness initiatives.
How do infrastructure improvements play a role in Kentucky’s continued economic growth?
Gov. Beshear: Companies should be confident that Kentucky has some of the best infrastructure in the country. We are a logistics hub with more investments by companies in logistics than I believe anywhere else, certainly per capita. You can reach two-thirds of the country’s population in a one-day drive, so we invest significantly in our roads and bridges. We just secured the largest infrastructure grant in U.S. history for the Brent Spence Corridor Project [across the Ohio River, linking Covington and Cincinnati] that will alleviate one of the most over-trafficked bridges in the United States. About 3% to 5% of the nation’s GDP goes across it every single day.
“In Kentucky there is no silliness and no politics that come into play when we’re trying to provide good jobs for our kids and our grandkids.”
We have an important I-69 project
that will open up Western Kentucky —
a full additional Interstate connecting to Indiana. We have every part but the final bridge that is under construction now. The Mountain Parkway will open up parts of Eastern Kentucky. It’s been a dream of 50-plus years to have a four-lane Mountain Parkway. We now have every section either under construction or the last part designed. We’ve even had our first company move to Magoffin County because they know it will be four-lane.
In terms of broadband, we’ve already made the largest public sector investment in our history and we just received a grant from the federal government for $183 million. We’re spending more on water and wastewater using ARPA [American Rescue Plan Act] funds for solid infrastructure, bringing clean drinking water to families and upgrading capacity to ensure that we are ready for each and every opportunity in front of us. In many ways, this is our Eisenhower moment with more investment in Kentucky and across the country in infrastructure, and it’s long overdue. The dividends it will pay in the future will be significant and incredible.
What’s next for Kentucky as you continue to build an economy for the future?
Gov. Beshear: My goal this year is to keep it rolling. After the two best years of economic development in our history, we set as a goal to have the fourth-best year in our history. This year my goal is to have the third-best and give last year a run for its money. While there is some uncertainty in the national economy, landing, for instance, these two major battery plants and their need for supply chain puts Kentucky in a good position to grow and to grow our economy regardless of what happens nationally.
One of the most important things I can do as governor is to bring in really great jobs. Sometimes that takes legislation and sometimes it doesn’t. We think about jobs as a number, and it’s not. It’s dignity for a person. It’s security for their family and the better jobs we bring in bring us closer to the dream of every Kentuckian, which is that kids will never have to leave our state to pursue their dreams because no matter how big they dream they can chase them right here. We don’t want our talented kids moving from Kentucky. We want other states’ kids moving to Kentucky so their parents can come and visit and go on the bourbon trail — we have plenty for them to do.
In Kentucky, economic development isn’t red or blue. It is an area we work on together. Whether it’s the legislature passing measures like the one that enabled the Envision AESC and Ford/SK On plants or the new KPDI program [the Kentucky Product Development Initiative] focused on industrial site preparation]. In Kentucky there is no silliness and no politics that come into play when we’re trying to provide good jobs for our kids and our grandkids. We are going to make sure that continues to be the case. We have such incredible working relationships with our counties and our cities.
We are all in this together because we’ve laid the foundation for Kentucky to leapfrog a lot of other states’ economies, and our goal is to be a top 10 economy. I believe we can do it.
Mark Arend has been editor in chief of Site Selection magazine since 2001. Prior to joining the editorial staff in 1997, he worked for 10 years in New York City at Wall Street Computer Review, ABA Banking Journal and Global Investment Technology. Mark graduated from the University of Hartford (Conn.) in 1985 and lives near Atlanta, Georgia.