RAW TRANSCRIPT FROM GOVERNOR’S FIRST ONLINE TOWN HALL

							RAW TRANSCRIPT FROM GOVERNOR’S FIRST ONLINE TOWN HALL
Thursday, April 08, 2004 8:00 – 9:00pm

Governor:
Hello. I am excited to be the first Governor of Kentucky to participate in an Online
Town Hall chat. I’m optimistic about the future of Kentucky, and glad to have this
opportunity to discuss with you the "JOBS for Kentucky" plan. Kentucky’s current tax
system is broken. It is unfair, discourages growth, and is not reliable. The passage of
this plan and the budget is critical to creating a flexible system that will promote growth
and create jobs in Kentucky. I’m looking forward to answering your questions about
how this plan will affect you, and any other issues on your mind.

Question:
Hello from Simpson County

Governor:
Thank you for joining us.

Question:
Why hasn't the State payroll not reduce more than what is present, or is it the mess in
Frankfort wasn't what you expected?

Governor:
We are continuing to work to improve efficiency in Frankfort without massive layoffs.
We have already seen a lot of savings since taking office and that includes meeting a
$300 million deficit over the first three months.

Question:
what about state employee raises

Governor:
Even in these tight budget times, we want to provide pay increases for state employees.
We are currently working with the House and Senate to determine the level of those
raises. Additionally, we would like to improve the work environment for all employees
so that they realize that they are appreciated for the job they do.

Question:
from Paducah: What is your reaction to today's deadlock in the budget negotiations?

Governor:
I am disappointed that the House Democratic leadership continue to obstruct the budget
and tax modernization process, but still hold out hope that we can get a good budget and
modernize the tax system for Kentucky's future.

Question:
Governor Fletcher, it's H.B. Elkins from Lee County -- I agree that our tax system needs
an overhaul to fuel economic progress in Kentucky. We also have a substance abuse
problem in eastern Kentucky that hinders economic development. I'd like to encourage
the state to apply for Access To Recovery federal funds, and would also like to see some
drug abuse initiatives coming from the statewide Drug Summits to assist with improving
the economy. Keep up the good work!

Governor:
H.B., thank you for your leadership and I agree. Lieutenant Governor Steve Pence is
doing an outstanding job on our drug assessment program, which will help address this
serious problem in Kentucky.

Question:
Gov Fletcher my question involves the tax modernization with LLCs. Would it be more
prudent to have LLCs that are shells for large corporations and employing people outside
the Commonwealth to have to employ a certain amount of people in Kentucky so as to
increase the tax base. Instead of taxing the LLCs directly and having them move to
another state or lose this ability to incoporate cheaply for small scale business

Governor:
Our tax plan closes loopholes that have allowed out-of-state companies to operate in
Kentucky without paying taxes. We believe our change in how we treat LLCs is fair and
will promote job growth in Kentucky without harming small businesses.

Question:
How will your tax plan encourage economic growth?

Governor:
It mirrors other state's tax systems which have been much more effective in creating jobs
and opportunities. Additionally, we have a computer modeling system that has shown
that our tax proposal will create 7,000 jobs over the next two years.

Question:
governor fletcher, you have gone all around the state like a baptist minister, preaching
kentucky's current tax system is broken, not reliable, unfair and discouraages growth. in
what ways is this so and how would your plan for kentucky create jobs and enc

Governor:
You are correct. I have, and our tax proposal will create jobs.

Question:
Governor Fletcher, As a you are aware Virginia plans to raise taxes. How can Kentucky
attract some of Virginia businesses to Kentucky? Would Kentucky's tax modernization
plan enable this?

Governor:
I have heard that, but regardless of what Virginia does, our tax plan will attract more jobs
and more opportunities.

Question:
With all due respect, Mr. Governor, are you saying that anyone who disagrees with you
must be obstructionist?

Governor:
No. But people who refuse to sit down and negotiate are obstructionists and that is what
has happened here in Frankfort.

Question:
My name is Chris Allen, I am a hopeful applicant in the current round of Kentucky's Rual
Innovation and commercialization investment initiative. Sir, are you aware the funding
for this important program has been omitted from the general Assembly's budget. The
Rural Commercialization Investment Fund is an excellent program. I agree that we need
jobs in Kentucky and this program is accomplishing that goal. It has successfully created
and funded 67 rural start up technology companies over the past two years and created
over 200 jobs. I understand that this funding has been omitted from the current budget.
Will it be added? What is your position on this?

Governor:
I will be glad to look into this issue. Please contact the Economic Development Cabinet
about this issue.

Question:
JeffBuis from Casey County: Will you take a more hands on approach to Homeland
Security for our Commonwealth in the future.

Governor:
Absolutely. We have established a Homeland Security office directly under the Governor
to closely monitor Kentucky's homeland security initiatives. Our new director, Erwin
Roberts, is doing an outstanding job.

Question:
Governor - I really appreciate you taking the time to talk with the people of the
Commonwealth on such an important day. Do you plan on doing this often so that we
can talk directly with you about key issues?

Governor:
I plan on doing this as necessary to ensure that we are able to move Kentucky forward for
the future.

Question:
Given the growing need for services and revenue, the cap doesn't appear tmake sense to
me, especially given the small tax break given to my bracket. Wouldn't it be wiser to
keep the revenue? How will this impact nursing home care, mental health, substanc

Governor:
The trigger that will allow us to continue to reduce personal income tax will help us grow
the economy. The level at which the trigger occurs allows our revenue to increase
substantially in order to meet the needs we have in health care and education as well as
other government services.

Question:
A few years ago, we voted to remove the vehicle property tax. Will this be addressed as
part of tax modernization? David R. White, Erlanger, KY

Governor:
I initially proposed just that. But, the House Democratic leadership walked away from the
table and refused to negotiate on a more comprehensive plan. I do believe future plans
should address this tax.

Question:
What are the chances that the legislature will agree on a budet before they adjourn on
April 15?

Governor:
I am still optimistic that it can be done.

Question:
Governor, Will you use the line item veto if the 300% increase in nursing home tax
amendment to the budget passes? The seniors in the targeted 29 private pay nursing
homes cannot bear that type of rate increase to support all the Medicaid homes.

Governor:
I know there are discussions regarding this issue but I am not aware of any amendments
at this time. And it is not part of my tax plan.

Question:
What tax relief benefits will JOBS provide for working families making $50,000-
$80,000/year as opposed to those making $120,000+?

Governor:
You can access our tax calculator which is now at the top of your screen. You will
receive a 5 percent reduction in your income tax identical to those in higher income
brackets.

Question:
Govenor, as a small business owner, several taxes exist that I feel is detrimental for the
expansion of small business, such as the intangible property tax and the tax on year end
accounts receivables. Would you support legislation to repeal those two elements of our
state tax code?

Governor:
Absolutely. That is part of our tax plan and I encourage you to call House leadership to
voice your support for this plan. The number is 1 800 872 7181.

Question:
Gov. Fletcher I worked during a couple of legislative sessions for the LRC I couldn't
help but notice some of the ridiculous pampering our legislators receive at tax payer
expense such as unlimited soft drinks, expensive catered lunches, courier services...
couldn't we cut these costs down to save tax payer dollars and bring down the cost of
having the legislature in session below the 70000+ per day?

Governor:
The legislators set their own budget but let me say they work hard and make a great deal
of personal sacrifices to serve their constituents.

Question:
From Versailles: Has the Democratic leadership offered any suggestions regarding tax
modernization or are they just grand standing?

Governor:
They have made no significant offers to provide any plan of comprehensive tax reform
that I am aware of.

Question:
Mr Governor,A two part question. Why is it that you only proposed a 1.5 % and 3 %
raises for the state employees? Part two-Do you intend to help equlaize the pay for the
State Police troopers and dispatchers to closer to that of the surrounding states?

Governor:
Over the biennium, that is about twice what the private market is offering. Additionally, I
am open to a larger increase if we get tax modernization to ensure we can meet the fiscal
demands.

Question:
Governor, it's H.B. Elkins again. Which would be preferable -- using a line item veto if
the budget is approved in conference, or vetoing an unacceptable budget and operating
from a spending plan like the previous administration did? This assumes a worst-case
scenario regarding the conference committee.

Governor:
I am willing to use either one of these to ensure that we have a fiscally responsible budget
but am hopeful that will not be necessary.
Question:
When will affordable high speed Internet access be available to all of rural Kentucky, and
how? (i.e. satellite, cable, powerline technolgy, telecoms...) And how will a 7% tax
increase on satellite TV / Internet Service Provider be of any benefit to rural Kentuckians,
most of whom rely upon satellite TV for their only form of television and hi-speed
Internet information, and have did without for so very, very long.

Governor:
The tax is a .5 increase on cable and we are on the verge of passing legislation that would
allow competition to encourage broadband across the entire state.

Question:
How much new revenue will the 7000 jobs create?

Governor:
Approximately up to $25,000,000

Question:
Graves Industrial Pk Funding was approved today by KIDFA board. thanks for you help

Governor:
You are welcome. We are here to serve. And we hope to attract new industries to the
industrial park, especially with tax modernization.

Question:
How do you feel about the tuition hike at the University of Kentucky? How does your
budget or tax modernization plan address this issue? How do they affect he long term
education goals fo the state?

Governor:
I was disappointed that tuition increased as the primary source of meeting budgetary
demands at the University. I hope to work with tax modernization in the future to ensure
that higher education can have increased funding. Additionally, my budget supported
more scholarships, especially for needy students.

Question:
How can local jurisdictions be "held harmless" with respect to telecommunications tax
revenue at a 7.62% rate, when current local rates are already 8.0%? Diane Knox from
Caldwell County

Governor:
If your county taxes include a 3% additional tax for schools then that can remain.
However, this plan does ensure that every county and school district is held harmless.

Question:
Mr. Governor, my question does not address the specific budget as much as it does our
current financial status. As a state employee on the front lines, I can see where the
cabinet that I work in has some many ways that we could streamline state government
and was hopeful that re-organization would trickle down to our areas. Are you still
working on the organization of all cabinets in state government to help save money? We
were so hopeful with the drastic change this year that things would get better. Laurel
County.

Governor:
Absolutely, and your input would be greatly appreciated. Thank you for your dedicated
work.

Question:
Joyce in Williamstown, KY. I'm curious why question #17 wasn't answered. I was
asking about the way below poverty level a person has to be in KY to receive medical
help. Why are the questions being screened like this???

Governor:
Apparently we did not see the latter part of your question. We do plan on Medicaid
reform to improve the quality of healthcare to ensure we have a sound fiscal basis for the
future. Currently, the Medicaid program is not being managed to ensure the best and most
cost effective health care.

Question:
Governor, would it not help the budget problem by offering a 60 day window for state
merit employees who 25 years that would be willing to retire early if a window was
offered

Governor:
We are continuing to look at early retirement options and are open to suggestions.

Question:
If an impasse continues on the budget and tax modernization, how soon will you look to
calling a special session? David R. White, Erlanger, KY

Governor:
As needed. But we are still hopeful that will not be necessary.

Question:
Governor, do you feel there is any hope for SB 245?

Governor:
It appears the House Democrat leadership wants to continue to obstruct this bill purely
for political reasons.

Question:
Do you forsee additional Tax revisions in the near future or will ths p;lan be flexible
enough to withstand the next several years

Governor:
Yes and yes.

Question:
Governor, given the importance attributed to the concept of elasticity in tax
modernization discussions, is it wise to rely so heavily on the inelasticity of demand for
tobacco products to provide a significant amount of state revenue?

Governor:
This tax plan has been reviewed and has substantial elasticity and stability consistent with
previous studies on Kentucky's tax system.

Question:
Gov. If the budget is not pass, do you have any plans to shut down Gov buildings?

Governor:
Not at this time.

Question:
James Snider from Franklin, Simpson County: I was impressed with your press
conference comments in Bowling Green yesterday. I am pleased with the emphasis on
education for technical jobs. You mentioned, I think that 2/3 of taxpayers would get a
break. Will the others pay more or continue where they are

Governor:
The only people who pay more are those who wish to pay more by the behavioral choices
they make. 98% of tax payers will pay less income tax.

Question:
from Benton..Governor, thank you for exposing the uncontrolled spending in various
Cabinets throughout state government. I hope you continue the good work. My question
is why have you chosen such a high increase on tobacco and such a slight increas on the
alcohol tax?

Governor:
This was chosen as a feasible ratio.

Question:
If you lower the tax rate, but increase the universe of taxed/fee based items, how is that
not raising taxes?

Governor:
Because this is a revenue neutral plan that reduces taxes for nearly all Kentuckians and
only through behavioral decisions will your taxes increase.

Question:
What kind of feed back are you getting from companies looking for a new place to
locate? Have any companies displayed increased interest in locating in Kentucky?

Governor:
We have already gotten interest stimulated from our tax modernization program and our
fiscally responsible budget.

Question:
It looks like budget talks might be at a standstill. What's the next step if the legislature
leaves without a budget. Would you call a special session or create a spending plan like
Gov. Patton did?

Question:
If there is no budget by April 15, will you call a special session before July 1 and try to
force the House to act?

Question:
What is the harm in passing a budget now and addressing tax modernization in a special
session in a month or two? This would still allow time to put changes in place well ahead
of the start of FY 2005 and provide more time for all parties to air concerns.

Governor:
I will leave the option of a special session open.

Question:
When campaigning in Henderson, you promised a much needed Tech Center to provide
job training. This Tech Center is not in your current budget. Other cities which were
considered a lower priority are included, why not Henderson?

Governor:
With tax modernization, I would be glad to consider the Henderson Tech Center. Call
your legislators.

Question:
The president hasn't created many jobs with tax cuts, what makes you think it will work
here?

Governor:
I disagree, there were 308,000 jobs created last month. Unfortunately, because of our
outdated tax system, not enough of them came to Kentucky.

Question:
Will the revenue from lottery continue to go to education or will it be earmarked for other
areas?

Governor:
My budget dedicated all Lottery money be moved toward scholarships, i.e. education.

Question:
If your tax reform plan doesn't raise new revenue initially, why can't it be dealt with apart
from the budget? How important is it to you that the legislature come to agreement before
end of the session?

Governor:
Because the budget is a two year plan and the tax plan does grow jobs and thus revenue
over the biennium.

Question:
Dear Mr. Fletcher, your favorite line these days is cutting inefficiency, fraud and abuse.
This was also your answer to the pleas of UK President Lee Todd that the university
needs additional funding. Somehow, your line did not incorporate "entrepreneurial spirit
and innovation". Whould you point to Mr. Todd that he is an accomplished entrepreneur,
and "One innovative President", and thus might want to stop putting pressure on
Frankfort and start thinking and listening to innovative ideas presented to him and his top
subordinates, ideas that will help UK become Top 20 and solve finantial troubles at the
same time.

Governor:
I agree, but to think that an organization the size of the University of Kentucky has no
need for improving efficiency is arrogant and naive.

Question:
What is the status of collecting sales tax from internet sales.? Estimated to be from
50million to 300million per year

Governor:
There is a national effort to do just that and we are participating.

Question:
I would like to know why as a registered voter and a state employee, I am permitted to
vote in elections but I am not permitted to speak with a representative without prior
approval?

Governor:
You are always welcome to speak to your representative about any personal issues.
However, we have communications directors who speak officially for the Administration
and the Cabinet, which is most appropriate. Thank you for your dedicated service.
Question:
We've had a couple of court decisions in the past few years that have hurt our tax system
-- St. Ledger and Illinois Toolworks. If the House does not concur with your JOBS plan,
do we have other taxes that might not withstand a legal challenge and cost the state
millions?

Governor:
Yes, our telecom tax was ruled unconstitutional as well. That is why we must have tax
modernization.

Question:
Small technology based companies have recently had to compete against public funded
institution and organizations that have started offering techology based products and
services that directly compete against those small businesses. This makes it
tremendously difficult for the small business to stay in Kentucky when their tax dollars
are supporting their competition. How would you address this issue with the business
owner who is looking to more into or expand their existing business in Kentucky?

Governor:
This administration is very supportive of small business and would appreciate your input
to our Commerce Cabinet on the issue of public competition with private companies.

Question:
Does the state government use any service "outsourcing" that can be converted to in state
employees or companies to create KY jobs?

Governor:
We always try to use Kentucky vendors and also get the best value for the tax dollar.

Question:
In an article in the Paducah Sun concerning a website for merit and non-merit job
openings in KY government, I applied for several of the jobs listed but have received no
feedback. I am interested to find out what are the requirements and if I am being
considered for any of these jobs. Who do I need to contact for assistance?

Governor:
Please contact our Personnel office at 502.564.2611. Also, the employment is now
accessible in the top part of your screen.

Question:
Mr Governer, What are the amount of the raises the Representatives and Senators are
concidering for themselves this year?

Governor:
They are considering a COLA but I am not aware of the exact amount.
Question:
Governor: I recently was apprised all state workers, teachers and state retirees can
anticipate paying an additional 50-70 dollars each month for insurance. How can you
and members of the Gen Assemgbly consider bricks and mortor over personal health
cover

Governor:
We are doing everything we can to keep your costs of health care down. We must also
build for the future as well.

Question:
Governor Fletcher, this is Joyce in Williamstown again. I'm a 50 year old disabled
female. I've been declared totally disabled by an SSI judge in Cincinnati. Therefore, I'm
curious what definate Medicaid reforms are in the works to help me out. I have an
income of $650 a month and I have to pay for all my medical care plus prescription meds
with that amount plus my bills. I know I sound single-minded but I'm not the only person
in this state that has this same problem.

Governor:
We are initiating personal care which will give you much more flexibility in how you get
your health care.

Question:
Govenor Fletcher. I work as a construction painter for an employer that provides health
insurance for his employees and also a retirement plan which is great. The only problem
is that we don't know how much longer he can provide these benefits because there are so
many other contractors that are exploiting their employees by paying cash oe
misclassifing thier workers as sub-contractors. It makes it hard to compete and be fair
when others are not paying thier taxes. I feel if something could be done to see that
everyone is paying thier fair share maybe our city and county and state coffers would not
be so dry. I am also concerned who will care for these people later when they have no
retirement or even social security paid in. Employers that are trying to do thier fair share
are being forced to stop doing so. I hope something can be done to level the playing field
for all employers. Thank you for your time.

Governor:
I share your concern. Please report any irregularities to your local authorities or to our
case workers at 502.564.2611.

Question:
governor, is the consolidation of several goverments in small countys the best direction
for the future of local goverments for grant rewards. Merge for money!! Keep up the
good work Kevin T.Williams Estill County , I support your tax plan!
Governor:
Thank you very much.

Question:
On a lighter note, have you signed SB 266 designating the blackberry as our official
fruit?

Governor:
Yes, I remember as a child picking blackberries. Thank you very much.

Question:
Are you looking at exercsing your power on Provision 404 and taking over some of the
Army Corps of Engineers duties? I've read that your doing so would create 15,000 high-
paying job within the year and more within a few years.

Governor:
We are evaluating 404 to see if there is a better way of enforcing the Clean Water Act.

Governor:
Right now I am focusing on the budget and tax modernization.

Question:
Governor, would you consider the newly developed Minority Republican Caucus as a
grassroots organization to help bridge minority relations in Kentucky. (As the grassroots
organization, we would be willing to be accountable for the union of all minorities.

Governor:
We have established a minority empowerment office directly under the Governor to reach
out and empower minorities.

Question:
I'm very interested in saving money on state procurement by instituting an e-procurement
program such as the state of Virginia has done...Are we looking at a system like that?

Governor:
Sounds like a good idea to me. I will mention it to the Secretary of Finance and
Administration.

Question:
Here’s an idea for early retirement 1. Any employees with 20 years of service regardless
of age will receive 1 month for every year of service. All employees taking advantage of
this window would receive payment based on high 5 no matter years and service. I have
more but do the math.
Governor:
We will forward this suggestion to Personnel and ask you to do the same.

Question:
Good evening Governor, with the consolidations of the cabinets, has there been any
thought about centralizing information technology?

Governor:
Yes. We are doing that.

Question:
I was a little confused by the blackberry question, I thought the gentleman was referring
to the communication device so many state officials seem to be purchasing lately.....do
you have any comment?

Governor:
No, it was actually to make the blackberry the state fruit, but I do enjoy using my
Blackberry PDA!

Question:
Thank you so much for doing this. It really says a lot that you're willing to put yourself
out there and take real questions from real people.

Governor:
You are welcome. Good to hear from you.

Question:
I am a teacher. I have been teaching for 15 years. I would like to know how you expect
me to take a paycut gracefully next year? If my health insurance premiums go up, I will
have less take home pay than I do now?

Governor:
I do not expect you to have a pay cut next year. My goal is to raise teacher pay consistent
with surrounding states.

Question:
Governor, thank you for holding this forum, I hope you continue these. Congragulations
and continued good luck and hopefully cooperation from the Democrat legislators.

Governor:
Thank you and let me say thanks to everyone who participated tonight.

Governor:
That's all the time I have to answer questions tonight. I'm sorry if I didn't get to your
question, but I thank you all for your participation. If you have other questions for me,
please visit http://kentucky.gov/govmail/govcontact.aspx.