Government Empowers, Kentucky Flowers

A combination of governmental development assistance and top technology has at least one state in full bloom.

by , / November 30, 1998
Until technology intervened, about $1 billion in Kentucky tax receipts were processed using index cards and ledgers. Even then, some of the computers used were antiques, some a quarter-century old and unable to communicate with each other. In addition, downtowns throughout the commonwealth lost key businesses as people moved to, worked and shopped in the suburbs.

But now there is a renaissance taking place. Thanks to Gov. Paul Patton, his staff, and three successful programs, residents are feeling empowered to make a difference.

Empower Kentucky, Renaissance Kentucky and the designation of the Kentucky Highlands as an empowerment zone have given the commonwealth the backing it needs to be a technological leader in economic development.

Empower Kentucky

"Two philosophies underlie Empower Kentucky," Patton said in a March 1996 message to other commonwealth employees. "First, state government exists to deliver appropriate services to the public. Second, and most importantly, state Illustration recreated from EZ/EC Website
government employees are overwhelmingly professional and dedicated to delivering service in the most efficient manner if properly supported through training, technology and management."

A key benefit of the program is revenue. In January 1997, less than a year after delivering his message, Patton announced that his administration had identified nearly $700 million in savings and other revenue that can be realized over a seven-year period. That amount includes $30 million in savings during the first year of implementation, and an estimate of more than $148 million just in 2004, the end of the seven-year window.

But service and revenue are connected. "We can significantly improve the services we provide to our customers -- the citizens of Kentucky," the governor said. "The teams [of commonwealth employees] have designed smarter ways to get the job done and better methods to serve constituencies -- from fewer forms to getting complete information in one phone call to one-stop local access to services."

Administrators for Empower Kentucky, on its Web site, said a large part of the funding from the Kentucky Legislature was slated to be spent on "needed technology to speed and modernize government accounting, budgeting and cash management. Currently, about $1 billion in tax receipts, or one-fifth of the state's revenues, are processed using index cards and ledgers rather than computers."

"By today's standards, the systems we're using are antiques," the governor said before the improvements. "The state purchases $15 billion in goods and services annually, and we're missing opportunities to save money by volume-buying and by not providing information to our managers in a form where they can make sound decisions. We cannot afford to spend millions to maintain 60-plus computer systems, some of which are 25 years old and often can't communicate with each other."

Renaissance Kentucky

Another program taking root is the Renaissance Kentucky Program, which offers a new approach to addressing the economic situations of Kentucky's downtowns. Announced by Patton in September 1997, the initiative's goal is to renew the strength of the commonwealth's "pulse centers."

Many communities lost their downtown appeal when businesses moved out of cities to serve people living in the suburbs. Now there is a desire to reverse that trend, and an alliance between the Kentucky Housing Corporation, the Department for Local Government, the Kentucky Heritage Council and the Kentucky League of Cities (KLC) has been formed to assist a renaissance community with its redevelopment vision. Funding to carry out this program comes from many sources, including community development block grants, low-income-housing tax credits and commonwealth government resources.

"We must accept the fact that the world is changing, and we can't make our downtown something that goes against our economic and social desires," Patton said. "But we can guide our downtowns to be the best they can be and keep them a safe and efficient part of our constantly evolving society. We can do that if we have vision and are creative and are willing to invest to do it together."

The criteria for renaissance communities include a defined downtown area, community commitment, financial support, goals and objectives, local impediment removal, occupancy standards, a historic integrity and preservation ethic, safety, a marketing study and plan, growth measures, leadership and the area's physical appearance. At the annual KLC convention in September, Patton announced the initial 41 renaissance communities. Leading the way are Danville, Frankfort, Harrodsburg, Paducah and Shelbyville.

Empowerment Zones

The third area of success in Kentucky is utilizing the revenue and opportunities offered to an empowerment zone. It took more than 20 years of discussion and riots in Los Angeles in 1992 to put the concept in the spotlight, but empowerment zones (EZ) and enterprise communities (EC), in the four years since they were first announced, have lived up to their billing.

The idea behind EZ/EC was to develop a solid economic tax base in otherwise depressed communities. Cities including Atlanta, Baltimore, Chicago, Detroit, New York and Philadelphia-Camden, N.J., which each received $100 million, joined rural regions including the Rio Grande Valley, the Kentucky Highlands and the Mississippi Delta, which each received $40 million, as the initial empowerment zones, with each designation slated for a 10-year period. Los Angeles and Cleveland were later added to the mix.

"We have to increase the rate of economic activity in America," President Clinton said at a July 1995 community empowerment conference. "We can do it by finding underutilized assets in America. That's what the empowerment zones are all about. The greatest residual economic asset left in the United States, the new economic frontier in America, are old-fashioned Americans who have been left behind in the rush to the 21st century. And if we can tap into that, then all Americans will benefit. All Americans will see increases in their incomes as the economy grows more rapidly.

"If economic activity rises in the Philadelphia-East Camden, New Jersey, area, it will be felt in Western Pennsylvania. It will also be felt in the western part of the United States," Clinton added. "This is a very important issue. And if you prove that this strategy works, then other people will do it and will spread like wildfire throughout the country."

The initiative is unique in that the people in the communities involved, not federal officials in Washington, D.C., are key figures in the decision-making process. For the Kentucky Highlands, that means the more than 27,000 people who live in Clinton, Jackson and Wayne counties. The Kentucky Highlands Investment Corporation is focused on bringing jobs to the area while establishing community-based partnerships through economic opportunity, community-building, and sustainable economic and community development.

A host of tax credits is designed to make operating a business in the zone appealing. The importance of small businesses, which account for 97.4 percent of the commonwealth's more than 74,000 companies, is reflected by the resources dedicated to small and start-up companies, according to Kentucky officials. Support programs include the Business Information Clearinghouse, the Kentucky Procurement Assistance Branch and the Business Technology Branch. In addition, the Kentucky Technology Service Inc. helps small and medium-size manufacturing firms in the commonwealth use the latest technology to become more nationally and globally competitive.
Bryan M. Gold is assistant editor of Government Technology. Rebecca Henry is managing editor of The Kentucky City, a monthly publication of the Kentucky League of Cities.

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