Tom Eblen

Election results could have big impact on Kentucky’s 2017 economy

President-elect Donald Trump campaigned on promises to put Appalachian coal miners back to work, as he stated at this rally in Charleston, W.Va., in May. Don’t count on it.
President-elect Donald Trump campaigned on promises to put Appalachian coal miners back to work, as he stated at this rally in Charleston, W.Va., in May. Don’t count on it. AP

The November elections could be one of the biggest influences shaping Kentucky’s economy in 2017. But what that shape will end up being is anyone’s guess.

President-elect Donald Trump promised to put Appalachian coal miners back to work and restore jobs for other blue-collar workers who, he said, have been devastated by illegal immigration and corporate off-shoring.

Making big promises in one thing; keeping them is another. Most blue-collar jobs have been lost to automation, and Trump can’t make America 1955 again.

Kentucky politicians have made hay with the “war on coal” meme — blaming the coal industry’s decline on Obama administration efforts to fight climate change and reduce pollution. But the decline in coal employment has a lot more to do with cheap natural gas, cheaper Western coal, mechanization and depleted Eastern Kentucky reserves than environmental regulations.

The election was barely over before Sen. Mitch McConnell was backpedaling, saying that ending the “war on coal” would not necessarily bring back jobs. So don’t expect an Appalachian coal revival in 2017, if ever.

Likewise, Hispanic immigration that changed the face of Kentucky in the 1990s has been moving in reverse for nearly a decade. But if the Trump administration carries through with promises of mass deportations and tighter guest-worker restrictions, Kentucky’s equine, tobacco and construction industries could feel the pinch.

Gov. Matt Bevin and GOP legislators were successful in their effort to “flip” the House of Representatives to a Republican majority for the first time since the 1920s. Now that Republicans control all three branches of state government, expect them to pass several pieces of conservative economic legislation.

So-called “right to work” legislation that makes union organizing harder is popular with corporations, and business leaders argue it will bring more jobs to Kentucky. That is debatable. Even if true, the question is how much economic security those new jobs will provide.

Trump and Bevin favor dismantling the Affordable Care Act, which enabled more than 400,000 Kentuckians to get insurance coverage. Retail, construction and restaurant workers were among the biggest beneficiaries. When thousands start losing coverage, it could be a blow to Kentucky’s economy.

Republican lawmakers also want to repeal the state’s “prevailing wage” law on public construction projects. While that will save taxpayers money, it will come out of the pockets of middle-class construction workers.

The Republican mantra, both in Kentucky and nationally, is accelerating economic growth. If that happens, it will be interesting to see who benefits from that growth and who doesn’t.

State GOP leaders say tax reform is on their agenda. But what will it look like? Who will benefit? Will it sufficiently grow state revenue over the long term? Will Lexington and Louisville voters finally be allowed to consider local-option sales taxes, as city officials and business leaders hope? There are a lot of questions.

One thing Kentuckians may not see with Republican control is the kind of LGBT discrimination laws that have hurt the economies of states such as North Carolina and Indiana. Business leaders have quietly but firmly told Bevin and GOP legislative leaders to not even think about it.

Aside from politics, here are some other things to watch in 2017:

▪  Kentucky’s advanced manufacturing sector should continue growing, thanks primarily to the aerospace and automotive industries. After nearly three decades in Georgetown, Toyota’s assembly plant is the biggest powerhouse, employing more than 7,000 workers and contributing to thousands more supplier jobs in the region.

▪  The $100 million first phase of the Summit at Fritz Farm, a 60-acre retail, restaurant, hotel and apartment development, will open by mid-year. The development will create a lot of service jobs, but big questions remain: How will all these new businesses affect existing ones? Will traffic at the corner of Nicholasville Road and Man O’ War Boulevard be perpetually gridlocked?

▪  Downtown Lexington, which saw the opening of 21C Museum Hotel in 2016 and a resumption of work on CentrePointe’s underground garage, will see several other major improvements advance in the coming year. A $250 million expansion and renovation of Lexington Center will get under way after millions of dollars in recent improvements to Rupp Arena. Next up: redevelopment of the huge parking lot next door. And by summer we should see some actual plans for Town Branch Commons, the linear downtown park, construction of which should begin in 2018.

Tom Eblen: 859-231-1415, @tomeblen

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