Kentucky lawmakers voted Thursday to strengthen the state’s negotiating hand in trying to land huge economic development projects by tapping into budget reserves to offer lucrative incentives.
The $410 million economic development package, requested by Gov. Andy Beshear, won final legislative approval on the third day of a special session focused on COVID-19 issues. The governor quickly signed the measure into law Thursday night, his office said.
Projects topping $2 billion would be eligible for the incentives. Beshear has said the state is pursuing at least five projects of that magnitude. The Democratic governor picked up solid support from Republican lawmakers to sweeten the state’s offer in trying to land the mega-sized projects.
“These are the kinds of big ideas and projects and prospects that we should be supporting in a bipartisan manner,” Republican Senate Majority Floor Leader Damon Thayer said.
The measure aims to strengthen Kentucky’s ability to prevail against competing states that “write a check upfront” in trying to attract such massive projects, Thayer said.
Hours after the bill cleared the Senate, it won final passage in the House as lawmakers worked into Thursday night. Republicans have overwhelming majorities in both chambers.
The incentives in the bill include up to $350 million in forgivable state loans and $50 million for worker training. The money would come from the state’s budget reserve trust fund, which now has nearly $2 billion.
That fund is necessary to shore up the state in bad times, but it has another purpose reflected in the economic development measure, Republican Rep. Jason Petrie said.
“It’s also for the good times, when opportunities come through and you have the wherewithal to take advantage of it when it presents itself to you,” Petrie said.
Rocky Adkins, the governor’s senior adviser, has said multiple Kentucky sites are drawing interest.
But much of the attention has revolved around a Hardin County tract. The Glendale site was offered two decades ago when Kentucky unsuccessfully tried to land a Hyundai auto manufacturing plant that ultimately located in Alabama. Glendale is about 50 miles (80 kilometers) south of Louisville.
Republican Sen. Paul Hornback on Thursday balked at the amount of the incentives being offered in opposing the measure.
“I’ve got a lot of companies in my community that have been there for 20, 30, 40 years, great contributors to the community … that have never gotten any incentives,” Hornback said.
During the House debate, Republican Rep. Russell Webber said the incentives package gives Kentucky a “great opportunity.” But the bill includes safeguards and oversite provisions to protect the investments and guarantee lawmakers are able to monitor the incentives program, he said.
“There will be thresholds that these businesses are required to meet,” Webber said. “There’ll be deadlines that they’re required to meet.”
Beshear has touted Kentucky’s economic resurgence even as the delta variant has caused a record surge of COVID-19 cases and hospitalizations. Any $2 billion-plus development would be certain to create loads of new jobs, with plenty of spinoff opportunities for even more job growth.