Bevin says Kentucky economy booming under new laws. Job growth has actually slowed.

Claims by Gov. Matt Bevin and other officials about record business investment in Kentucky paint a picture more optimistic than reality, according to a report released Monday.

Bevin and state officials tout $9.2 billion in corporate expansion and new-location projects in the state in 2017, a record-breaking investment that would bring 17,219 new, full-time jobs if all the projects happen as planned.

However, that claim counted jobs and spending that may not occur, and some of the promised investments are not projected to create any additional jobs, according to the report from the left-leaning Kentucky Center for Economic Policy.

“It is not a number that identifies actual jobs created or actual investments made,” the report said of the $9.2 billion figure. “And it does not consider jobs that are eliminated and businesses that are closed or downsized in a particular year, or most small business activity.”

Recent trends suggest job growth in Kentucky may be slowing, and the state is not performing as well as the South and the nation, the report said.

Over the past year, jobs in Kentucky have increased half of 1 percent, compared to 2.1 percent in the South and 1.7 percent in the U.S., the report said.

One example cited in the report was Toyota’s announcement of a $1.3 billion upgrade at its plant in Georgetown. The project was not projected to create any new jobs.

Toyota would have to maintain employment of about 7,100 in order to get $40 million in approved state tax breaks, but that agreement would actually allow Toyota to cut jobs and still get the incentive, according to the Kentucky Center for Economic Policy.

Its report also pointed to Ford’s announcement of a $900 million investment in a plant in Louisville. That announcement was not slated to create any new jobs, though The (Louisville) Courier Journal reported the plan would “safeguard” 1,000 hourly jobs.

One project listed in the report, Braidy Industries, accounts for $1.3 billion of the $9.2 billion in investments announced in 2017, but does not yet have funding secured for the project.

If Braidy doesn’t come through, nearly half the $9.2 billion in investments announced for Kentucky in 2017 wouldn’t have any new jobs identified with them, according to the Kentucky Center for Economic Policy’s report.

There have been $4.3 billion worth of announced investments in Kentucky so far in 2018, according to a Cabinet for Economic Development report cited in the center’s report.

The report included a critique of the state’s “right to work” law, which limits the power of labor unions to collect dues. The state legislature approved the law in 2017 and the state Supreme Court recently upheld it.

The Bevin Administration has pointed to the law and other business-friendly changes as key factors in planned business investment in the state.

“With key measures enacted, including passing right-to-work legislation, red-tape reduction and starting a workforce training revolution, Kentucky is sending the message internationally that it’s serious about recruiting business,” Terry Gill, state economic development secretary, said in a Dec. 30, 2017 news release.

Braidy’s chairman cited the union law as a key factor in the project.

But the Kentucky Center for Economic Policy, which did not support the law, said more than 80 percent of the projects identified in a state report on business activity in 2017 were expansions of businesses operating in the state before legislators approved the law, “raising serious doubts about claims the investments result from recent policy changes.”

The report said it is doubtful some of the largest projects announced in 2017 resulted from the law on union dues because the promises came soon after Bevin signed it, and large companies don’t make decisions that quickly.

Internet retail giant Amazon, for instance, announced a $1.4 billion investment in a cargo hub at the Northern Kentucky airport less than a month after Bevin signed the law, the report said.

The report also said Kentucky has added only 700 net new jobs monthly since legislators approved the law, compared to 2,100 a month in the 21 months before the law passed.

In the manufacturing industry, which supporters said the law would boost, Kentucky has added a net of 1,000 jobs since the law was approved, compared to 13,600 in the 21 months before.

“There is a narrative that Kentucky’s economy is now growing faster, a claim often attributed to policies like right to work,” Jason Bailey, executive director of the center, said in a news release. “But when you look at the actual data, you find nothing extraordinary about investments or jobs, and in fact Kentucky has seen a troubling slowdown in job growth.”

Elizabeth Kuhn, spokeswoman for Bevin, dismissed the report as “nothing more than the rantings of a liberal ‘economic policy’ group” with no trained economists.

“Indisputable facts show that Kentucky’s economy has achieved record milestones under the Bevin Administration,” Kuhn said, pointing to record low unemployment and the highest number ever of people in the workforce.

Federal figures show the total number of people in the workforce in Kentucky at a high point, but the percentage of residents in the workforce has been higher in the past.

Jack Mazurak, spokesman for the Cabinet for Economic Development, said the state’s right to work law “indisputably” has been a factor in getting Kentucky into the mix in more discussions with companies looking for new locations.

The average number of leads coming to the cabinet jumped 65 percent from 2016 to 2017, after the law passed, he said

Mazurak also said companies in nearly all cases only get state incentives if they meet job-creation targets, and analysis has shown that overall, companies participating in the state’s most-used incentive program created more jobs than outlined in their agreements.

Bailey said the response by the governor’s office does not address the finding that growth in Kentucky has slowed since passage of the right to work law.

The center’s report argued that Kentucky’s standards for awarding tax incentives to companies don’t require the beneficiaries to provide high enough wages and benefits, and that the state rarely studies whether the tax breaks it awards are cost effective.

The state awarded $361 million in tax incentives to businesses in 2017, the report said.

Investments in education and infrastructure would do more to drive economic growth, the report said.

“Rather than providing the resources necessary to make these crucial investments, the strategy of providing tax breaks to spur economic development only weakens a state’s ability to make these investments by draining away tax dollars,” the report argued.

This story was originally published December 10, 2018 at 12:00 AM.