The ® LaneKENTUCKY’S BUSINESS NEWS SOURCE Report FOR 32 YEARS SEPTEMBER 2017 $4.50 TOURIST SEASON GOES YEAR ROUND IN KENTUCKY Beyond its ‘bourbonism’ boom, $14.5 billion hospitality sector grows by giving visitors a taste of the authentic Page 24 lanereport.com KY 40150 KY Lebanon Junction Lebanon LANE ONE-ON-ONE: Permit #327 #327 Permit PAID BEN CHANDLER ELECTRONIC SERVICE REQUESTED SERVICE ELECTRONIC U.S. POSTAGE U.S. President/CEO, PRST STD PRST 201 E. Main St. Ste. 1402, Lexington KY 40507 KY Lexington 1402, Ste. St. Main E. 201 Foundation for a Healthy Kentucky TLR_September2017cover_Finaler.indd 1 9/5/17 1:27 PM TLR_September2017cover_Finaler.indd 2 Corporate Government Affairs Healthcare Regulation Real Estate Litigation Estate Planning Medical Malpractice comprehensive healthcare law services. it’s kind of our bag. 201 East Main Street, Suite 900 9300 Shelbyville Road, Suite 110 Lexington, Kentucky 40507 Louisville, Kentucky 40222 (859) 231-8780 | www.mmlk.com (502) 327-5400 | www.mmlk.com 9/5/17 1:27PM We may find a cure for cancer–right here in Kentucky Dr. Ray Takigiku’s company, Bexion Pharmaceuticals has developed a way to kill tumor cells in certain types of cancers while leaving healthy cells intact. And he’s doing it in Kentucky. Thanks to Kentucky’s strong support, and eight years of research, Bexion now has FDA approval to begin clinical trials. This could someday lead to a cure for cancer. Kentucky offers a blend of opportunity, innovation and lifestyle. 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September Lane 1-23.indd 1 9/5/17 1:19 PM SEPTEMBER LThe ane Report 2017 Kentucky’s Business News Source For 32 Years Volume 32 Number 9 24 MEDICAID EXPANSION BETTER THAN FEARED Stable conditions for Kentucky healthcare finances, but chronic uncertainty remains in the prognosis 28 MAKING EMPLOYEE AGE DATA AN ASSET Direct-to-employer care program’s analytics tool helps provider anticipate and manage care needs 31 COVER STORY TOURIST SEASON GOES YEAR ROUND IN KENTUCKY Beyond its ‘bourbonism’ boom, $14.5 billion hospitality sector grows by giving visitors a taste of the authentic Departments 4 Perspective 36 Emerging Lane 6 Fast Lane 38 Lane List 16 Interstate Lane 39 Spotlight on the Arts 17 Kentucky Intelligencer 40 Exploring Kentucky 18 Corporate Moves 42 Passing Lane 19 On the Boards 44 Kentucky People 20 Lane One-on-One: Ben Chandler President and CEO, Foundation for a Healthy Kentucky On the Cover lanereport.com Coordinated presentation and marketing Kentucky Business News Online of Kentucky’s authentic Americana cul- Read up-to-the-minute Kentucky business news stories, ture and mild climate has built its $14.5 current and archived copies of The Lane Report, Market Review, BG – A way of life, Next – Your Future After billion tourism industry into a year-round High School in Kentucky, Health Kentucky, Research Kentucky business sector that supports more than special reports, white papers and community profiles. 190,000 jobs. Faster Lane Email news bulletin Three or more times a week, the editors of The Lane Report publish Faster Lane – email bulletins of fast breaking and important Kentucky business and economic news. Visit lanereport.com to sign-up for this free, must-have, at-your-fingertips news service. September Lane 1-23.indd 2 9/5/17 1:19 PM THESE THREE CAN HELP YOUR BUSINESS WITH C&Is, SWAPs, AND CREs. AND HELP EXPLAIN WHAT THOSE THINGS ARE. City’s lending power—with loans up to $40 million—is matched only by our team’s dedication to getting to know you and finding the best business loan solution to grow your business. Some banks lend money. Bill, Charlie and Victoria lend hands, too. Call City’s Lexington lending team at 859-367-3751 or visit BankAtCity.com/LexingtonTeam. Member FDIC September1979-LendinPrintd5.indd Lane 1-23.indd 3 1 4/24/179/5/17 11:201:19 PM M LThe ane Report PERSPECTIVE Kentucky’s Business News Source for 32 Years EXECUTIVE EDITOR/VICE PRESIDENT economy, thus taxes are focused on Mark Green TAX REFORM GOAL what people choose to consume. ASSOCIATE EDITOR MUST BE GROWTH Since Kentucky’s income and corpo- Karen Baird rate taxes were introduced in 1936, the DIGITAL EDITOR Current tax structure has state has relied heavily on production Jonathan Miller left Ky. with broken economy taxes. Today, the two make up approxi- CREATIVE DIRECTOR mately 46 percent of all revenue to the Jessica Merriman BY JORDAN HARRIS General Fund. When gross receipts and CREATIVE SERVICES other production taxes are added, the Stone Advisory percentage increases to more than half Paul Blodgett of General Fund revenue. CORRESPONDENTS OST of us know the centuries- The broader impact of this structure is Michael Agin; Katherine Tandy Brown; old parable of the boiling toad. evident. Kentucky’s household income is Russ Brown; Chris Clair; Shannon Clinton; Kevin Gibson; Susan Gosselin; Robert Hadley; If you place a toad in boiling 18 percent below national average, rank- Mwater, the story goes, it will detect the ing it 45th in the nation. Our labor force Lorie Hailey; Debra Gibson Isaacs; Kara Keeton; Abby Laub; Tim Mandell; Esther Marr; threat and immediately jump out. If participation rate as of May 2017 was 60 Greg Paeth; Robin Roenker; Josh Shepherd; you instead place it in lukewarm water percent, ranking it 43rd. By virtually every Sean Slone; Katheran Wasson; and slowly increase the temperature to metric, our antiquated structure has given Gary Wollenhaupt; Dawn Yankeelov a boil, it will remain there until it dies us a broken economy. PUBLISHER/CEO from the heat. Pegasus Institute, the public policy Dick Kelly For several decades, Kentucky’s econ- think tank that I serve as co-executive SENIOR ASSOCIATE PUBLISHER omy has been a slowly boiling toad. director of, released a plan last month to Donna Hodsdon By the very nature of their business, provide a roadmap for tax reform that ASSOCIATE PUBLISHER political leaders often think in short two-, can help reverse these trends. We believe Melissa McGarry four- or six-year cycles. This makes it easy that it should eventually be the goal of DIRECTOR OF BUSINESS OPERATIONS to recognize and respond when a crises our state to join the nine other states that Nicole Conyers White occurs, but more difficult to see slow ero- don’t have an income tax, but under- MARKETING CONSULTANT sions taking place over multiple decades. stand that a gradual process might be Curtiss Smith Retrospective economic growth numbers required. For that interim we have pro- CIRCULATION/IT provide a clear picture though – we’re posed what we call the 3-3-6 Plan. Josiah White nearing the boiling point. The 3-3-6 Plan will immediately Since 1977, Kentucky’s GDP growth make Kentucky one of the top business FOUNDER has been a pathetic 30 percent below climates in America by eliminating the Ed Lane national average, ranking it 44th in the graduated income tax and cutting the United States. The last decade is top marginal rate in half, to a flat 3 per- SYNDICATED COLUMNS equally troubling. The common- cent. We propose doing the same to the Creators Syndicate wealth’s real per-capita GDP growth in corporate tax rate, also moving to a 3 PRINTING & CIRCULATION SERVICES the last decade is only 0.3 percent, put- percent rate. Closing existing sales tax Publishers Printing Co. ting us well behind our neighbors. Ten- loopholes will help make up for this WEB MARKETING & PUBLISHING nessee’s per capita GDP growth is 2.56 revenue shift. The sales tax remains at 6 Able Engine percent in that same period. Indiana is percent, but current exemptions IT SERVICES even higher at 4.7 percent. should be curtailed. NetGain Technologies The immediate next question turns This change will give the average to fixing the problem. To do so, we Kentucky household nearly $1,000 in INTERNET SERVICES QX.net must first note that the tax structure of additional take-home pay, allowing Lane Communications Group a state is the single most important way them to use their money as they see fit. is a member of it dictates the direction of its economy. Equally important, it allows for busi- A nation, which has a central bank, nesses of all sizes to grow, providing guides its economy through monetary more opportunities for employment, a policy and tax policy, with long-stand- wider variety of job options, and the The Lane Report is published monthly by: Lane Communications Group ing debates about which is a more hope of upward mobility. 201 East Main Street 14th Floor important factor. For a state, which can- With bold tax reform, Kentucky law- Lexington, KY 40507-2003 not produce its own money, it is clearly makers have an opportunity to com- [email protected] For more information and tax policy. pletely reshape our economy and build advertising rates contact: There are two basic theories about a tax structure that exists for the “com- PHONE: 859-244-3500 how to shape a tax structure to encour- mon wealth” of every Kentucky citizen. The annual subscription rate is $29. age growth. One theory, known as the Doing so will be the most important (Kentucky residents add $1.74 sales tax.) Newsstand price is $4.50. Keynesian Theory, believes that economic change in nearly eight Send check or money order to: increased consumption is the key to decades, and ensure that people at Circulation Manager economic growth, therefore taxes every level are more prosperous in the THE LANE REPOrt should be concentrated on production.