February 2019

464 Chenault Road | Frankfort, KY 40601 Phone: 502-695-4700 Fax: 502-695-5051 www.kychamber.com

464 Chenault Road | Frankfort, KY 40601 Phone: 502-695-4700 Fax: 502-695-5051 NEWS www.kychamber.com

House Speaker David Osborne sat down with Jacqueline Pitts of the Kentucky Chamber for an exclusive interview with The Bottom Line: Kentucky Political News

House Speaker Says BUSINESS COMMUNITY URGES LEGISLATORS TO LEGISLATURE WILL SLOW DOWN THE TAKE ACTION ON PACE IN 2019 SESSION

In a sit-down interview with package passed in 2018 as issues he feels will be Pension The Bottom Line, Kentucky priorities in the House and Senate. House Speaker David Osborne “The one thing we absolutely have to do this year, and Reforms in said the legislature will see we will do that shortly after we come back, is make a slower, more deliberate some tweaks to the tax reform bill,” Osborne said. “At pace in the 2019 session and 2019 the end of the day, I am proud of that bill we passed. I will focus on key priorities A new Public Pension Working group was think it was a good piece of legislation that started us including tax reform fi xes, formed to look at the structure, cost, benefi ts, on the path of modernizing a really, really oppressive school safety, and others. and funding of the state retirement systems after and bad tax system. And we started that. And I think pension reform legislation passed during the “Quite frankly, we do need often times the fi rst step is the most diffi cult one.” 2018 General Assembly was overturned by the to slow down. There’s not Kentucky Supreme Court in December and no DAVID OSBORNE When asked about the possibility of the legislature that singular pressing issue agreement was reached during a special session. HOUSE SPEAKER tackling the increased need for infrastructure out there that we have built investment, Osborne said the formula for how Kentucky consensus around While the pension group was meeting, the funds its roads and infrastructure is broken and the for a period of Kentucky Chamber sent a letter to all legislators costs will continue to go up under this model. years like we’ve at the end of January urging action this year to strengthen the state’s struggling pension systems. done in the past Quite frankly, we do “We will move some type of infrastructure funding at with right to work need to slow down. such time that we have that type of bipartisan buy-in. In the letter, Kentucky Chamber President and and prevailing — David Osborne, House Speaker This is not something that I feel like that Republicans CEO Dave Adkisson said the business community wage and workers’ aren’t the only ones that drive on these roads. It’s commends the legislature for forming the Public compensation Republicans and Democrats. And when both parties Pension Working Group to examine the systems reform. We had come together with a solution, then I think it will be and make recommendations for reform, stating spent years building time to move something,” Osborne said, adding that the reset on the issue is necessary to look at the consensus on those types of items,” Osborne said. bipartisan discussions are being had to come up with a facts and allow for deliberate consideration of any solution. As for what the legislature will focus on in the 2019 proposed changes to the pension plans. session, Osborne highlighted the issues of school Watch the exclusive interview with House Speaker SEE PENSION REFORMS IN 2019, safety, welfare reform, and fi xes to the tax reform David Osborne on kychamberbottomline.com. PAGE 2 Education Issues Take Center Stage IN 2019 SESSION Lawmakers have made education issues their top priority in 2019 with many bills focused on improving the safety and quality of school environments being in the forefront.

Education remains the top strategic priority of the Kentucky Chamber as a strong education system is key to creating a globally competitive workforce.

Principal Selection The Chamber also believes it is vital that superintendents, as the CEOs of their districts, have increased ﬂ exibility in the selection of school principals.

Senate Bill 3, sponsored by Sen. John Schickel, gives superintendents hiring authority of principals and also equalizes the number of parents and teachers on school councils.

Currently, the councils have three teachers and two parents along with a principal. The bill proposes taking one of the teachers off the council to give parents a more equal voice in the decision-making process. SEE EDUCATION ISSUES, PAGE 2 FROM THE FRONT Pension Reforms in 2019 All previous reforms made to the Kentucky Retirement System (KRS) and Kentucky Teachers’ Retirement System (KTRS) were noted in the letter. Adkisson also asked legislators to consider the business community’s perspective on the need for reforms. The items listed in the letter include the strain pensions has created on the state budget leaving less money for education and other government services, increased burden on taxpayers as the growing unfunded liability of the systems could cause tax increases, downgrades in the state’s bond rating, and more.

“The Commonwealth’s interests are best served by a JOHN GOHMANN deliberate process that produces thoughtful pension REGIONAL PRESIDENT reforms that can win legislative approval and withstand PNC Bank | Chairman, Kentucky Chamber Pension Task Force a costly and time-consuming legal challenge that would, at best, delay needed reforms and could ultimately for higher years of service, and using unused sick leave to count toward years of undo needed changes. We believe the best way to develop a clear and certain service). path forward is through a combination of additional financial investments in the retirement system and benefit changes that are legally sustainable,” Adkisson • Remove inviolable contract applicability for new teachers (like the 2013 legislative writes in the letter. provision that removed the inviolable contract for new employees participating in the Kentucky Retirement Systems). Moving forward, Adkisson said, the Chamber believes it is important to honor commitments made to public retirees while also offering competitive retirement • Adopt the level-dollar method to determine the ARC (actuarially required benefits to help the state recruit and retain quality workers. contribution) which would amortize the total unfunded actuarially accrued liability of pension funds over a set period (like a home mortgage). The current method of As for potential changes, the Chamber encouraged legislators to consider calculating the ARC using percentage of payroll is creating underfunding due to the following options for reforms: shrinking state government payrolls and outsourcing of jobs. • Increase the minimum age for full retirement benefits to at least age 62 or impose an age-and-service combination that would achieve equal financial savings.

• Place new teachers in a hybrid style plan with contribution rates that account for READ MORE the fact that teachers do not participate in Social Security. Read the full letter from the Kentucky Chamber on kychamberbottomline.com. • Remove provisions that allow public employees to boost their pensions (such as the use of the highest three salary years to calculate benefits, higher multipliers

FROM THE FRONT Education Issues School Safety Tribunal Reform Both the state House and Senate have made school safety their number one Working to improve the quality of learning environments for Kentucky schools, priority in the 2019 session, filing companion safety measures as House Bill 1 and Kentucky lawmakers are also working on legislation to professionalize Kentucky’s Senate Bill 1. tribunal system in an effort to help school districts deal with ineffective or insubordinate teachers while protecting due process. The effort comes a year after a tragic school shooting in Marshall County, Kentucky where two students lost their lives. Lawmakers worked over the last year on the The Kentucky Chamber has been a longtime advocate for tribunal reform as the School Safety Working Group to craft the legislation and implement measures current tribunal system to review appealed cases of misconduct and inadequate statewide to ensure the safety of all Kentucky students. job performance of school employees is both complicated and inconsistent. Superintendents are reluctant to fire or suspend an insubordinate employee due The school safety measure seeks to provide more school resource officers and to the cost, complexity of the process and the likelihood their decision will be mental health professionals in schools, create a new position of a “state school overturned by a tribunal. security marshal,” require certain personnel to have annual active shooter training, and explicitly criminalize threats and hoaxes made toward schools as second- Senate Bill 8, sponsored by Sen. Steve West, would make changes to the current degree terroristic threatening, among other things. tribunal structure by ensuring one of the members of the council is an attorney trained in education law and limits tribunal decisions to upholding or overturning the Sen. Max Wise, sponsor of Senate Bill 1, has explained the bill is the first step in decision of the superintendent. efforts to improve safety as legislators will need to include funding for the measure during the crafting of the next two-year state budget in the 2020 session. In discussing the bill, West said there are very few cases in Kentucky that end up in front of a tribunal and added the cases that do end up there are often extremely egregious and need to be handled in a timely and professional manner.

Kentucky Chamber Director of Political Affairs Travis Burton testified in front of LEARN MORE legislators adding the support of Kentucky’s business community for the policy. Learn more about issues during the 2019 session on Burton said a strong education system is vital to a quality workforce and Senate Bill kychamberbottomline.com. 8 will help ensure there is an effective teacher in every Kentucky classroom.

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Apply now at principalsleadky.com | Deadline to apply is March 8, 2019. GOV. MATT BEVIN HIGHLIGHTS OPPORTUNITIES BETWEEN Kentucky & India During Economic Development Trip In an exclusive phone Kentucky Chamber President and CEO interview with The Dave Adkisson spoke on a panel at Bottom Line while in the Vibrant Gujarat Global Summit with India has 1.3 billion India, Kentucky Gov. top executives of American businesses people and one of Matt Bevin discussed including Lockheed Martin, Uber, and the fastest growing the “extraordinary KPMG about how to improve relations economies on the planet. opportunities” available between the United States and India. — Dave Adkisson, Kentucky Chamber for Kentucky and the rest President and CEO Adkisson told the crowd “India has 1.3 of the country with India billion people and one of the fastest following his conversation growing economies on the planet. with India’s prime Kentucky would like to grow alongside your country by increasing trade and direct minister. investments. Let’s remove any barriers between us!” The U.S. Chamber of Adkisson also spoke to a Global Conclave of International Chambers during the Commerce selected India trip. Bevin to lead an economic development delegation to India to attend the Vibrant Gujarat Global Summit 2019. The trip sought to strengthen ties with national and state government leaders, industry groups and individual businesses in one of the world’s largest and fastest-growing economies.

The delegation that traveled to India includes the U.S.-India Business Council, leaders of the Kentucky Cabinet for Economic Development, Kentucky Chamber President and CEO Dave Adkisson, as well as business and industry leaders from Kentucky and other states across the country.

Following a meeting between Gov. Bevin and Narendra Modi, prime minister of India, Bevin told The Bottom Line the two discussed the governor’s Red Tape Reduction initiative, the common values shared between India and Kentucky, and opportunities that exist for a strong partnership.

As for what economic ties Kentucky currently has with India, Bevin said there are LEARN MORE only about a half dozen Indian-owned companies in Kentucky but believes there is Learn more at kychamberbottomline.com. great potential for much more.

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FOR KRA PROGRAM SAVINGS: Contact: Bill Johnson Toll-Free: 502-939-9999 Email: WWW.BRIDGEWELLHEALTH.NET | [email protected] PROGRAM OVERVIEW Valvoline is a proud Kentucky Chamber member, just like you. KNOW YOUR Legislators With many signifi cant pieces of legislation moving through the Kentucky General Assembly, your elected offi cials need to hear from YOU on key issues to help improve the state’s business climate. Watch for Action Alerts from the Kentucky Chamber throughout session and call your legislators at 1-800-372-7181 to express your support for priority bills important to the business community. And the winners are…

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100 COMPANIES NAMED SMALL COMPANIES Best Places to Companies of 15-149 U.S. Employees • All Star Purchasing • MCF • AMR Management Services • Medical Center Jewish Northeast Work in Kentucky • ARGI • Medical Center Jewish South • Associations International, LLC • Metro United Way The Kentucky Chamber of Commerce, the Kentucky Society for Human Resource • Bim Group • Middleton Reutlinger Management (KYSHRM), and Lifestyle Health Plans have announced the 100 • Budget For The People • Mirazon companies (in alphabetical order) that made the 15th Annual Best Places to Work in • Clinical Behavior Analysis (CBA) • NetGain Technologies, LLC Kentucky list. • Connected Nation, Inc. • Peel & Holland, Inc. The winner rankings will be announced at an awards dinner Tuesday, April 23, • Diversifi ed Automation, Inc • People Plus, Inc 2019, at Heritage Hall in the Lexington Convention Center. The selection process is • Fahe • Peoples Exchange Bank based on an assessment of the company’s employee policies and procedures and • Global Information Systems, LLC • PharmaCord, LLC the results of an internal employee survey. • Hardin County Water District No. 1 • RunSwitch Public Relations • Integrity IT • SIS A Converge Company **Kentucky Chamber members noted in bold • Jewish Hospital Shelbyville • STOBER Drives, Inc. • KECH, Inc. • Strothman and Company • Kentucky Educational • Town & Country Bank and Trust FOR MORE DETAILS Development Corporation Company For more details about Best Places to Work in Kentucky, visit • Kingdom Trust • Tri-Arrows Aluminum Incorporated bestplacestoworkky.com. • KLH Engineers, PSC • Uniﬁ ed Trust Company • Lexington Habitat for Humanity, Inc. • Volta • Marine Solutions, Inc. • Ward, Hocker & Thornton PLLC • Massage Envy Lexington • Wehr Constructors, Inc.

MEDIUM COMPANIES Companies of 150-499 U.S. Employees

• Air Hydro Power, Inc. • Independence Bank • Associates in Pediatric Therapy LLC • ISCO Industries • Blue & Co., LLC • Kentucky Bank • Bottom Line Systems • L&N Federal Credit Union • Bourbon Community Hospital • Louisville Tile • CLARK Material Handling Company • MassMutual Midwest • Commonwealth Credit Union • Material Handling Systems, Inc. • Dean Dorton • MCM CPAs & Advisors LLP • Flaget Memorial Hospital, • Park Community Credit Union CHI Saint Joseph Health • University of Kentucky Federal • Forcht Bank Credit Union • Harrison Memorial Hospital • US WorldMeds • Harshaw Trane • WDRB Media • Heritage Bank USA, Inc. • Winterwood Inc. • Houchens Insurance Group Valvoline is a proud LARGE COMPANIES Kentucky Chamber Companies of 500 or More U.S. Employees

member, just like you. • Aerotek • Kentucky American Water • Appriss • KORT That’s why we’ve partnered to offer all our fellow members • Booz Allen Hamilton, Inc. • Long John Silver’s, LLC a 15% discount at any Valvoline Instant Oil Change.SM • Brooksource • Musselman Hotels • Central Bank & Trust Co. • Neustar, Inc • Comcast • Novelis Inc. • Corning Incorporated • Parallon- Louisville Specialty Center SCAN & SAVE 15% OFF • CSI • Republic Bank • Edward Jones • Rockcastle Regional Hospital and • Envoy Mortgage, Ltd. Respiratory Care Center • Farm Credit Mid-America • Senture, LLC • Frankfort Regional Medical Center • Steptoe & Johnson PLLC • Galen College of Nursing • Total Quality Logistics • Genentech • Valvoline Inc. • Gray Construction • V-Soft Consulting Group Inc *Excludes batteries and state inspections. Oil change service includes up to 5 quarts of any Valvoline oil ® (diesel quarts may vary; see store for details), ﬁlter (premium extra), lube & maintenance check. Good only • Jack Henry & Associates, Inc. • WellCare of Kentucky, Inc. at participating locations. Offer not valid with any other offers/discounts; cash value $0.001. STATE LEADERS TRADE JOKES & LAY OUT PRIORITIES FOR 2019 AT Kentucky Chamber Day Dinner As a kickoff to the 2019 session, Kentucky’s governor and legislative leaders took the stage in front of more than 1,600 business leaders at the annual Kentucky Chamber Day Dinner where they traded barbs and highlighted what they feel will be the top issues of the year.

The governor also highlighted the business-friendly priorities passed in recent years that have drawn record investment in Kentucky and applauded the Kentucky Chamber for being named Chamber of the Year by the national Council of State Chambers.

As for what is to come in 2019, Bevin stated pensions will continue to be a critical area of need after the Kentucky Supreme Court overturned reforms made by the legislature in 2018 and a special session ended without agreement. He said the sense of urgency continues to grow as the unfunded liability of the systems crowd out other areas of government spending. Gov. Matt Bevin addresses Kentucky business leaders at House Speaker Osborne stated he felt the Kentucky Supreme Court’s ruling on 24th Annual Kentucky Chamber Day Dinner on January 10 pension reforms in December was wrong and puts many pieces of legislation passed in recent decades into question. He added there is no quick solution to the Senate Minority Leader Morgan McGarvey said the General Assembly has a new pension issue. Osborne went on to say tensions will be high in 2019 due to the opportunity to work together in a bipartisan fashion on issues like school safety, bail governor’s race but highlighted welfare reform and school safety as some of the reform, criminal justice issues, and more. priorities of the House Republicans. Kentucky Chamber President and CEO Dave Adkisson highlighted infrastructure Senate President Robert Stivers said he expects the legislature will focus on funding, legal liability reform, bail reform, sports wagering, fi xing the state’s making schools safer, smoothing out the rough edges of the new tax reform arbitration statute, tribunal reform, and tobacco-free schools as top priorities of the package passed in 2018, continuing efforts to improve workers’ compensation business community in 2019. Adkisson encouraged state leaders to enact policies system, and other initiatives seeking to move Kentucky forward in 2019. that move Kentucky boldly forward. Democratic House Minority Leader Rocky Adkins, who is also running for governor, said for Kentucky be a more competitive place he believes it involves long-term investments in education, economic development, and workforce. As for the 2019 READ MORE session, Adkins implored GOP leaders to slow the tempo down and work together Read the fullMad Chambere possible Day by wrap: up story on on issues like tax reform changes including a fi x for nonprofi ts, school safety, kychamberbottomline.com. medical marijuana, and others.

Kentucky CELEBRATING Governor’s Race PRIMARY CANDIDATES YEARS As the deadline closed on January 29 to enter into the 2019 governor’s race, Kentuckians will vote between three candidates in each party for the OF THE gubernatorial primary elections on May 21.

See who’s running in the 2019 Governor’s Race: REPUBLICANS

KENTUCKY CHAMBER WORKFORCE CENTER MATT BEVIN ROBERT GOFORTH WILLIAM WOODS DEMOCRATS Turns 2! Over the last two years Made possible by: the Workforce Center has grown from 1 to 8 full- time employees, hosted three Workforce Summits, launched an online network for statewide workforce conversation between over 8,000 businesses, went on a statewide tour launching Talent Pipeline Management, trained 40 Talent ROCKY ADKINS ANDY BESHEAR ADAM EDELEN Pipeline Management Champions from across the state and in turn launched Kentucky’s Talent Pipeline, started a partnership between the Kentucky Department of Education andCELEBRATING Work-Based Learning to engage employers with 12 regional career academies across the state, was the presenting sponsor at LEARN MORE the 2018 Kentucky SHRM Conference, attended and presented at countless Learn more about the candidates in the governor’s race and all meetings and conferences across the state and country,YEARS and much more. candidates for statewide offi ce in 2019 at kychamberbottomline.com. Learn more about the Kentucky Chamber Workforce Center at kychamberworkforce.com. OF THE 2019 Chamber Day Photos

24th Annual Kentucky Chamber Day Dinner with over 1,600 attendees & 80 Kentucky legislators

2017 Kentucky Chamber Chairman Bill Lear, Rick Hesterberg, & Kentucky Chamber Workforce Center Chairman Kim Menke 2019 Kentucky Chamber Board Chairman Paul Thompson

Gov. Matt Bevin, U.S. Ambassador 2010 Kentucky Chamber Chairman to Canada Kelly Craft, 2018 Kentucky Senate Minority Leader Morgan McGarvey & Senate Majority Leader Damon Thayer Bill Jones & 2020 Kentucky Chamber Chamber Chairman Joe Craft Chair-Elect Nick Rowe

Elizabeth Bishop, Lauren Osborne, & Annie Franklin Turns 2!

Senate President Robert Stivers House Speaker David Osborne

House Minority Leader Rocky Adkins University of Louisville President Neeli Bendapudi Kristen Branscum, Josh Branscum, & Steve Branscum

*Photos by Tim Webb Photography NEW POLL SHOWS OVERWHELMING BIPARTISAN Support For Overhauling Kentucky’s Cash Bail System

In February, the Kentucky Chamber of Commerce released a statewide CEO of the Kentucky Chamber of Commerce, Dave Adkisson. “Our organization public opinion poll that shows broad public support for improving the way the has been and will continue to be deeply committed to reforming our criminal justice Commonwealth approaches its pretrial justice system. Currently in Kentucky, system in ways that increase public safety while also improving how our state and someone charged with a crime must pay cash bail in order to leave jail before local resources are allocated.” trial. Those who can’t afford to pay remain in jail even though they have not been A Pegasus Institute study found 64,123 non-violent, non-sexual defendants convicted. detained in 2016 because they could not afford their bail, staying an average of A phone survey of 625 registered Kentucky voters conducted by Mason-Dixon 109 days. At the same time, there were 43 high-risk, violent or sexual offenders Polling & Strategy from Dec.12 through Dec. 15, 2018 on behalf of the Kentucky who were released after posting bond. Chamber of Commerce found that 76 percent support reforming Kentucky’s bail In 2017, local governments lost $152 million because of Kentucky’s current bail system so that those charged with a nonviolent, nonsexual crime can be released reform system. In July of 2018, 73 percent of jails were at or over capacity and from jail while awaiting trial through a bail process that does not require cash close to ten jails were at or over 200 percent capacity. payment. The survey grouped voters in fi ve regions; Louisville Metro, Lexington/Bluegrass, “These numbers confi rm there is strong consensus behind a top agenda item for Northern Kentucky, Eastern Kentucky and Western Kentucky. All regions the 2019 session of the General Assembly, transitioning the system to focus on supported reform at a rate of 70 percent or higher. the offense and offender rather than on their fi nancial means,” said president and

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Visit us online at: kychamber.com/deltadental Leadership Kentucky Board Chairman Elmer Whitaker, Kentucky Chamber President & CEO Dave Adkisson, & Leadership Kentucky Immediate Past Chair Mary Corbett Thank you for your CONGRATULATIONS TO NEWLY ELECTED investment. The following is a list of new Kentucky Chamber members of the Kentucky Chamber. Please help us thank these companies for investing in the Chamber’s mission by giving them Board Members your business. PRESIDENTIAL ADVISOR McLane Cumberland EQUITY PARTNER Dippin Dots, LLC CORNERSTONE Evergreen Life Services Bowling Green KY Members Choice Credit Union Stand Energy Corporation STAKEHOLDERS Arctic Wolf Networks CEECO Equipment, Inc. Columbia Sussex Management LLC D & D Industrial Contracting JOE GROSSMAN JAY RICHERT AARON ARTHUR Druther’s PRESIDENT AND CHIEF GENERAL MANAGER THOMPSON WALKER III First National Bank & Trust Company EXECUTIVE OFFICER Marathon Petroleum PRESIDENT EXECUTIVE VICE Greenheck Fan Corporation Appalachian Regional Catlettsburg Reﬁ nery Kentucky Council on PRESIDENT OF Hensley Elam and Associates Healthcare Postsecondary Education CONSTRUCTION LexEffect The Walker Company Nesbitt Engineering

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