States across the country are ready to reap the benefits of rising business and investor confidence and are racing among themselves to attract foreign and domestic investors. States like Kentucky, which were hit hard by the downturn in coal and manufacturing in the last two decades, have started seeing a record level of investments.
Kentucky announced $9.2 billion in corporate investment last year, creating more than 17,000 jobs, the highest since 2000. And the state is well positioned to attract more investors in the coming years, thanks to its skilled workforce and improving business climate, according to Kentucky Governor Matt Bevin.
“We have a great workforce. I have invested $250 million in workforce development in the last two years,” Bevin told the Epoch Times.
Kentucky is one of the top states in attracting foreign direct investment, according to him. The state has nearly 500 international companies that employ more than 110,000 people.
Bevin is committed to investing in education and workforce development. In order to encourage more investments, the state and local jurisdictions will spend an additional $250 million in workforce development in the next two years, he said.
Kentucky is a prime location for manufacturing and major logistics companies. It is the third largest automotive producing state in the country, with Toyota’s largest vehicle manufacturing plant in the world located in Kentucky.
Part of the reason for Kentucky’s success has been its central location and access to key transportation routes. It is at the center of a 34-state distribution area in the eastern United States, and Kentucky’s borders are “within a day’s drive over 65 percent of the nation’s population, personal income and manufacturing establishments,” according to Kentucky’s Cabinet for Economic Development.
Hence, expanding and upgrading the infrastructure is critical to the state’s business climate.
Public-private partnerships are the best vehicles for funding key infrastructure projects, according to Bevin. In order to encourage private-sector investments, the state passed public-private partnership legislation last year.
The state has also started streamlining the state regulations. After his election in 2015, Bevin launched a “red tape reduction initiative” in an effort to spur investment and job creation.
In addition, tax reform is expected to make the United States a more competitive and better place to do business and Kentucky is one of the primary beneficiaries. The full expensing provision of the new tax code, which allows immediate expensing of capital investment, is an important incentive for manufacturers in Kentucky.
“There is no question at all that trillions of dollars will be invested in the United States by small-size, mid-size and large companies,” Bevin said. “It is already happening.”
As part of tax reform, a program called “Opportunity Zones” has also been created to help rural regions suffering from lack of jobs and businesses. The program offers significant tax breaks to private investment in these struggling regions.
“It is a tremendous opportunity for states like ours where we have a lot of rural areas,” Bevin said.
The provision calls for governors to establish Opportunity Zones in their states. They are asked to identify a certain number of census tracts, which will be eligible to receive investment through the program over the next decade.