It’s a conflict that has long simmered in Kentucky — city vs. country; urban vs. rural; haves vs. have nots; or some other variation on the theme.
A study released by the Center for Business and Economic Research at the University of Kentucky offers some statistical analysis to support the existence of the disparity between the two and makes some recommendations that are sure to stoke the heat in the argument.
University of Louisville economist Dr. Paul Coomes wrote in the 2005 Kentucky Annual Economic Report that when it comes to distributing public resources, such as tax money for transportation infrastructure and even education, the state is too evenhanded. Urban areas should be getting more because they not only contribute a greater proportion of the tax base, those areas are the only real hope to pull all of Kentucky out of the economic backwater.
“Kentucky’s fiscal policies clearly disadvantage the economic competitiveness of its largest cities,” Coomes wrote in the article, “Kentucky is missing lucrative office economy growth.”
“If Kentucky is ever to catch up in terms of prosperity, it will be led by its cities,” Coomes continued. “But its urban areas cannot compete nationally and internationally under an anachronistic tax structure and spending policies geared primarily to redistribution and entitlement.”
The concentration of economic activity is overwhelming, Coomes argued. He said one-half of all private sector wages paid in Kentucky are earned in only four of the 120 counties — Jefferson, Fayette, Boone and Kenton. If Warren and Daviess counties are added, those six provide half of all the private sector jobs in the state.
Coomes estimated that the state’s three primary urban areas — Louisville, Lexington and northern Kentucky — contributed $4.2 billion in state taxes and fees in the 2003 fiscal year, but received only $2.8 billion in return.
“Kentucky state spending policies continue to be geared to providing infrastructure and services to sparsely populated areas, a 50-year economic development mission that is essentially complete and now dangerously close to creating a new entitlement culture,” Coomes said.
A change in tax and spending policies is needed to promote the booming knowledge and office industries, Coomes said.
Farming and mining are in decline and Kentucky has done little to help itself attract corporate headquarters and research and development firms, the real engines of future economic growth, Coomes said.
Coomes cites what has become almost a truism for Kentucky’s economy — education pays.
Coomes noted the “myth” that the state’s low educational attainment level is unique to its rural areas. “In fact, nearly all regions of Kentucky rank low in terms of college attainment and most are low in terms of high school attainment,” Coomes said.
There is not a single county that is above the national average in both education and earnings, Coomes said. “Indeed, only two or three counties are above the national average in either measure,” he said.
— Associated Press
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