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LANE ONE-ON-ONE: RUTH BRINKLEY Growing The ® LaneKENTUCKY’S BUSINESS NEWS SOURCE Report FOR 27 YEARS DECEMBER 2012 $4.50 Growing production, new distillers, waves of tourists suggest this signature Kentucky industry’s future is even brighter Page 21 lanereport.com LANE ONE-ON-ONE: RUTH BRINKLEY CEO, KentuckyOne Health TLRdecember_CoverFinal.indd 1 11/30/12 10:51 AM TLRdecember_CoverFinal.indd 2 11/30/12 10:51 AM December Lane 1-20.indd 1 11/30/12 11:05 AM December Lane 1-20.indd 2 11/30/12 11:05 AM December Lane 1-20.indd 3 11/30/12 11:06 AM DECEMBER LaneThe Report 2012 Kentucky’s Business News Source For 27 Years Volume 27 Number 12 21 COVER STORY BOOMING BOURBON BUILDING AN EVEN BRIGHTER FUTURE Production expansions, new distillers, waves of tourism – all in a down economy – bode well for a signature Kentucky industry 26 KENTUCKY SPACE WANTS FINANCIAL STARDUST Its engineering is earning global notice, gaining the state a foothold in the entrepreneurial aerospace industry 30 HIGH RETURNS, BROAD IMPACT Kentucky higher ed endowments, Part II: Future Profits 32 DEMAND-SIDE ECONOMICS Taking a look at Nominal GDP Targeting and its implications for Kentucky 34 ANALYSIS PARALYSIS Avoid consensus overload and keep the venture moving forward with rapid yet thoughtful decisions Departments 6 Perspective 36 Going Green 8 Fast Lane 37 The Lane List 14 Interstate Lane 38 Exploring Kentucky 15 Kentucky Intelligencer 40 Spotlight on the Arts 16 On the Boards 41 Sales 17 Corporate Moves 42 Passing Lane 18 Lane One-on-One: 44 Kentucky People Ruth W. Brinkley President and CEO of KentuckyOne Health On the Cover lanereport.com Kentucky bourbon is at the height of pop- Kentucky Business News Online ularity. Sales are up across-the-board, the Read up-to-the-minute Kentucky business news stories, industry is in its largest expansion phase current and archived copies of The Lane Report, since Prohibition ended, and interest in Market Review, BG – A way of life, Next – Your Future After High School in Kentucky, Health Kentucky, Prep Magazine, bourbon heritage is driving thousands of special reports, white papers and community profiles. visitors from all over the world to Kentucky distilleries. The way distillers are showcas- Faster Lane ing bourbon is “the best thing that has Email news bulletin happened to the Kentucky tourism indus- Three or more times a week, the editors of The Lane try since the development of the state park Report publish the Faster Lane email bulletin of fast breaking system,” according to Marcheta Sparrow, and important business and economic news from across secretary of the Kentucky Tourism, Arts Kentucky. Visit lanereport.com to sign-up for this free, must- and Heritage Cabinet. have, at-your-fingertips news service. December Lane 1-20.indd 4 11/30/12 11:06 AM December Lane 1-20.indd 5 11/30/12 11:06 AM The PERSPECTIVE Lane Report ® Kentucky’s Business News Source for 27 Years EDITORIAL DIRECTOR Mark Green ing swift and meaningful action to help ASSOCIATE EDITORS SAME SONG, Karen Baird improve Kentucky’s fiscal condition. Lorie Hailey NEXT VERSE Taxes will also warrant serious discus- sion in 2013, but won’t likely be addressed CREATIVE DIRECTOR 2013 General Assembly will Jessica Merriman in a meaningful way in the short session. see new faces, familiar issues The Governor’s Blue Ribbon Commis- CORRESPONDENTS Amanda Arnold; Rena Baer; sion on Tax Reform is scheduled to pres- ent recommendations to the General Katherine Tandy Brown; Anne Charles Doolin; BY DAVE ADKISSON Debra Gibson; Susan Gosselin; Robert Hadley; Assembly for consideration in late Decem- Anne Sabatino Hardy; Feoshia Henderson; ber, but it appears the deadline to do so Kara Keeton; Meredith Lane; Abby Laub; could be extended again. Tax reform is Nancy Miller; Greg Paeth; Eddie Sheridan; HEN the General Assembly con- always a difficult undertaking, and any tax Mariam Williams; Gary Wollenhaupt venes in Frankfort this Januar y, proposal will require a supermajority (23 SYNDICATED COLUMNS Wit will be full of new faces, but of 38 votes in the Senate; 60 of 10 0 votes Creators Syndicate riddled with familiar issues. This year’s is DESIGN a “short session,” as it falls in an odd year Stone Advisory and runs half the time of the even-year It’s up to the legislature now PRINTING, OUTPUT & PRE-PRESS SERVICES budget sessions. Legislators will meet to implement bold change in Publishers Printing Co. only four days in Januar y to elect mem- order to secure the future of ■ bers to leadership positions and organize our state’s economy. the committee structure for the next two CHIEF EXECUTIVE OFFICER Ed Lane years. But the new members and sea - PUBLISHER soned veterans alike will face a number in the House) in an odd-year session, Bob Earley of familiar but critical issues despite the making it even more difficult to achieve. limited timeframe. None of these issues This increases the likelihood of a special ASSOCIATE PUBLISHERS Dick Kelly could be more daunting than reforming session for any vote on tax reform; how- Donna Hodsdon Kentucky’s severely underfunded public ever, the debate will likely begin during pension systems – a key priority for the the regular 2013 General Assembly. CHIEF FINANCIAL OFFICER Steve Rohlfing, CPA business community. Unresolved during the 2012 session Several studies have noted the dire was state legislative redistricting – the COMPTROLLER financial condition of the common - Jeromie Kirk process of properly redrawing legisla - wealth’s pension system. In its recent tive boundaries. The Supreme Court CIRCULATION publication of the State of the States found the 2012 plan unconstitutional P&B Services report, Barron’s magazine identified and has directed the legislature to com- WEB MARKETING & PUBLISHING Kentucky as 47th worst in overall finan- plete the task before the next General WebMedley cial health. Just last year Moody’ s and Election in 2014. Redistricting is an IT SERVICES Fitch rating agencies downgraded Ken- extremely political exercise and will NetGain Technologies tucky’s bond rating – both citing the have to be negotiated by the leadership Lane Communications Group unfunded pension liabilities. The Bar- of each legislative chamber. Some are is a member of ron’s report serves as another sobering content to wait until 2014, while others reminder that our unsustainable state would like to complete the task in 2013. pension system must be addressed. Although this issue doesn’t generally The nature of the pension system, in impact employers directly, it will be which costs are constantly accruing, The Lane Report is published monthly by: important to watch as it can easily turn Lane Communications Group requires that action be taken now to put the political environment bitter. 201 East Main Street 14th Floor the system on a sustainable track. Every A number of other issues will be dis- Lexington, KY 40507-2003 year that passes without significant cussed – many of which will impact [email protected] changes simply kicks the can down the employers and taxpayers. Issues like For more information and road and increases the cost of any even- education, unemployment insurance, advertising rates contact: tual solution. Failure to take action also workers’ compensation, healthcare, PHONE: 859-244-3500 continues the current spending trend of environmental regulations and liability less funding for education and more for issues can have a serious impact on The annual subscription rate is $29. retirement benefits – leading to lower employers and job creation. As always, (Kentucky residents add $1.74 sales tax.) Newsstand price is $4.50. investments in the training and educa - the chamber’s public affairs team will tion that Kentuckians require to be com- be at the Capitol following the action Send check or money order to: Circulation Manager petitive in our economy. and keeping small and large employers THE LANE REPORT The legislature must address this alike informed on the critical issues. 201 East Main Street 14th Floor issue in the upcoming session. A task Keep up with legislative action at Lexington, Kentucky 40507-2003 force was created to study the public kychamberblog.com and learn about THE LANE REPORT corrects all significant errors that employee pension system, and it deliv - the issues at policy.kychamber.com. ■ are brought to the editors’ attention. ered recommendations for improve- © 2012 Lane Communications Group ment in late November. It’s up to the All editorial material is fully protected and must not be legislature now to implement bold reproduced in any manner without prior permission. change in order to secure the future of Dave Adkisson is president and CEO of the Kentucky Chamber of Commerce our state’s economy. The Kentucky Chamber will be there in Frankfort urg- 6 DECEMBER 2012 LANEREPORT.COM • THE LANE REPORT December Lane 1-20.indd 6 11/30/12 11:06 AM December Lane 1-20.indd 7 11/30/12 11:06 AM FAST LANE A compilation of economic news from across Kentucky FLORENCE: L’OREAL BREAKS GROUND ON $42 MILLION STATE: WITH NEW CONTRACT, EXPANSION; PROJECT WILL ADD MORE THAN 200 JOBS SOUTHERN COAL RECALLS LOBAL cosmetics and MINERS; OTHERS CUT JOBS hair care manufacturer OVEMBER was another volatile GL’Oreal USA broke ground last month on a major month in the Kentucky coal indus- expansion project at its plant Ntry as one company announced in Florence that will add plans to recall workers and hire more, 110,000 s.f. and create more while three others announced layoffs. than 200 new jobs over the West Virginia-based Southern Coal next three years. Corp. announced on Nov. 27 that it was L’Oreal USA Plant Manager calling 500 miners back to work in Ken - Eric Wolff said the expansion is tucky, Virginia and West Virginia and plans tied to an increase in consumer to hire another 650 after negotiating a demand for the popular hair multiyear deal with American Electric care brands produced at the Power.
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