Gov. Steve Beshear and Frankfort’s economic-development leaders celebrated a recent award by Site Selection magazine for being the state with the “most new projects per capita” last year.
Any economic progress is commendable – especially considering Kentucky has myriad business-unfriendly policies. But is this award a reason to burst out the bubbly and – as some likely will suggest – delay becoming a right-to-work state like Wisconsin did on March 9 or getting rid of our punitive state income tax?
While the Site Selection article paints a cute picture of snappy economic activity, other sources that are at least as reputable say otherwise:
- Business Insider ranks Kentucky’s economy No. 44 out of 50.
- Forbes ranks Kentucky as No. 44 out of 50 in its ranking of “The Best and Worst States for the New Economy” with a score of 48.4 compared to top-ranked Massachusetts’ 94.7 ranking.
- CNBC ranks Kentucky No. 36 in its state business rankings, much lower than Tennessee to the South (No. 13) and Indiana to the North (No. 18).
- The Bureau of Economic Analysis reports that while growth occurred in 49 states in 2013, Kentucky’s dismal 1.6 percent growth in gross domestic product (GDP) was below the national average.
- Art Laffer, a respected economic adviser to President Reagan, ranked Kentucky No. 39 in his “2014 Economic Outlook Rankings.” Only Illinois was ranked lower among Kentucky’s neighboring states.
We know much more about the criteria that all of these credible sources use than we do about the Site Selection rankings.
Forbes’ “Best States for Business and Careers” index, for instance, reveals not only an economic ranking of No. 33 for Kentucky but also how the state placed in various categories.
Kentucky’s overall No. 33 placement was arrived at by combining its ratings in business costs (No. 14) labor supply (No. 46), regulatory environment (No. 24), growth prospects (No. 29) and “quality of life” (No. 34) classifications.
However, a news release from the governor’s office simply states that projects qualifying Kentucky for its Site Selection award had to meet one of three criteria: “involve a capital investment for at least $1 million, create 50 or more jobs or add at least 20,000 square feet of new floor space.”
We don’t really know how many projects fit into each of these categories or how meaningful they are to the commonwealth’s economy. Plus, as Site Selection’s editor-in-chief admitted to the Mackinac Center for Public Policy, his publication’s rankings are still “a function of what states report to us.”
It’s like not fully understanding why the University of Kentucky men’s basketball team is ranked No. 1 in the nation.
Believe me, the whole sports world knows why the Wildcats received every single first-place vote cast in the latest college-basketball poll – not the least of which is the team achieved the first undefeated regular season in nearly 40 years.
Their ranking isn’t a result of what they pick and choose to report. Their performance has been there for the whole world to see. And what a season it’s been.
There’s also plenty to crow about when it comes to potential economic growth in Kentucky.
Since Warren County, for example, passed the nation’s first local right-to-work ordinance less than 90 days ago, 27 new prospects representing 3,667 jobs and $324 million of new investment – numbers that increase almost daily – have expressed interest in coming to southcentral Kentucky.
If even some of those prospects end up coming to Warren County, it will rival the actual impact of the 32 new manufacturing-related projects and the 2,213 announced by the entire commonwealth for all of 2014.
“It’s clear that the county’s right-to-work designation is making a difference,” said Bowling Green Area Chamber of Commerce CEO Ron Bunch.
Clear as bubbly.