Nine Economic Regions of Kentucky provocative facts, policy challenges for future Kentucky Economics Association October 2014 Paul Coomes, Ph.D. Emeritus Professor of Economics University of Louisville

What was Kentucky’s 1958 rank among states in terms of earned per capita income? 32nd 38th  46th 50th

Kentucky’s rank among 50 states Personal income minus transfer payments, per capita 1958: 46th 2013: 46th Thank goodness for West Virginia, Mississippi, South Carolina, and Arkansas.

Regional Economic Development in Kentucky Where are we? Where have we been? Where are we going? Talking about the per capita income of Kentuckians is like talking about the average elevation of Colorado. It is the variation around the average that is interesting. The State of Kentucky is not an economy in any meaningful sense – not a labor market, not a housing market, not a retail market, not a media market. States, counties, municipalities are political and administrative entities. While a county is closer than a state to a market boundary, most markets encompass many counties. Consider television market areas (the ABC, CBS, NBC network broadcast territories).

Television Market Boundaries KY is somewhere in here. TV stations don’t care. The maps linked below were retrieved from the U.S. Census Bureau web site (http://quickfacts.census.gov/qfd/) and altered to show TV markets by county. The TV Market information was derived from pictures once available on the now defunct www.echostarmerger.com, select TV station web sites and other sources on the web.  At no time was the Nielsen Media Research Co. web site nor any other material directly attached to same ever consulted The TV Market borders change slightly every September.  The most if not all the maps linked below are current as of the 2006-2007 season. The map above is derived from information retrieved in the 2002-2003 season and is there for historical purposes. If you have any questions, comments or corrections, please e-mail me at tvmarkets@echostaruser.com

10 Television Market Boundaries around Kentucky all except Lexington and Bowling Green stations are multi-state Bowling Green: CBS broadcast is from WTVF in Nashville TN Somerset: cable provides WBIR-NBC from Knoxville TN http://dishuser.org/TVMarkets/Maps/kentucky.gif 9  Available on Dish Network:  Bristol (TN/VA) Cincinnati (OH), Charleston/Huntington (WV), Evansville (IN), Knoxville (TN), Lexington, Louisville, Nashville (TN), Paducah 1 Not Available on Dish Network:  Bowling Green

A Google Map View Cincinnati- Northern Kentucky Stylized economic regions based on major cities, TV markets, and terrain. Louisville-Elizabethtown-Southern Indiana Ashland-Huntington-Charleston Evansville-Owensboro-Henderson Lexington Mountain Paducah-Purchase Bowling Green-Hopkinsville-Nashville Somerset-Cumberland-Knoxville

Developing Useful Economic Development Geographies Detailed County Assignments to Nine Regions Thankfully, the Census Bureau gives us a good start by defining metropolitan, micropolitan, and combined statistical areas based on employment interchanges between counties. For example, the Frankfort, Mt. Sterling, and Richmond micropolitan areas are part of the Lexington Consolidated Statistical Area. Using these definitions, we can assign 48 of Kentucky’s 120 counties to one of the nine economic regions.

The hard part is looking at counties at the margins of the major market areas, and assigning them to one economic region. I look at television markets and commuting patterns from the Census Bureau’s American Community Survey 2006-2010. For example, where to assign Danville and its two micropolitan counties – Boyle and Lincoln? Both counties receive television from the Lexington market. Top external destinations for work of Boyle + Lincoln residents: Mercer (1,056 + 372) = 1,428 Fayette (811 + 429) = 1,240 Jessamine (368 + 457) = 825 Pulaski ( 54 + 517) = 571 Garrard (257 + 250) = 507 Franklin (187 + 155) = 342 Mercer, the top destination, and Garrard are also served by the Lexington TV market. Fayette, Jessamine and Franklin are in the Lexington CSA. So, assign Boyle, Lincoln, Mercer and Garrard to the Lexington region. Note there is a pull towards Pulaski County from Lincoln County. So, assignment is not perfect.

Cincinnati Louisville New York Destin Naples

 Which of the nine regions is the most densely populated? Louisville Northern Kentucky Mountain Lexington

Northern Kentucky and Louisville regions three times more dense than five most sparse regions: economies of scale in cost of delivering public services (e.g., schools, safety, roads, health care).

Top three counties over 30 times more dense than sparsest counties.

Which of the nine regions has the least population growth this decade?  Mountain Cumberland Paducah - Purchase Louisville

This decade so far declining population at tails of state

This decade so far

This decade so far more deaths than births

Mountain region was third most populated; now is fifth, and heading towards seventh. Regions contain 28 counties, with combined population less than that of Jefferson County

Peak: 408,000 in 1983 Net loss of 76,000 since 1983

Net loss of 76,000 since 1983 Net gain of 49,000 since 1983

 Which region has the highest income from farming? Owensboro-Henderson Bowling Green - Hopkinsville Cumberland  Lexington

Equine… Grain, poultry, livestock

 Which region has the highest income from mining? Owensboro-Henderson Paducah - Purchase  Mountain Lexington

Mountain and Owensboro-Henderson regions ($1 Mountain and Owensboro-Henderson regions ($1.7 billion) account for 75% of Kentucky total

 Which region has the highest income from manufacturing? Louisville Ashland Lexington Northern Kentucky

Louisville and Lexington regions ($9 billion) account for 58% of Kentucky total

Louisville accounts for 44% of state total. Louisville, NKy, Lexington regions combined account for 66% of Kentucky total

Louisville region accounts for 46% of state total. Louisville, Lexington, Nky regions combined account for 79% of Kentucky total

Which region has had the strongest job growth since the bottom of the 2008-09 recession?  Lexington Bowling Green - Hopkinsville Paducah - Purchase Ashland

Which region has had the highest ratio of employed persons to population? Lexington Bowling Green - Hopkinsville  Northern Kentucky Louisville

urban, dense rural, sparse

Less than one-third employed

Which region accounts for the largest share of private industry payrolls in Kentucky?  Louisville Bowling Green - Hopkinsville Lexington Northern Kentucky

70% of private payrolls in Kentucky from three of the nine regions: your tax base.

urban, dense rural, sparse

Four counties account for one-half of Kentucky total private sector income Note: all top counties are urban, except Scott (Toyota)

Which of the nine regions has the highest government payroll per capita? Lexington  Bowling Green - Hopkinsville Louisville Mountain

Fort Campbell Frankfort Fort Knox

In twelve counties, over 40% of earnings from government employment. Two counties – Christian and Hardin – dominated by military. Franklin is home state government. Lyon County: KY State Penitentiary at Eddyville. Other eight are all in eastern Kentucky.

 Which region has the highest transfer payments per capita? Lexington Paducah - Purchase Ashland  Mountain

Mountain: $3.9 billion total, or 40% of personal income Cumberland: $3.2 billion total, or 38% of personal income NKY: $3.1 billion total, or 17% of personal income

Mountain and Cumberland regions much more dependent in 2012 than in 1969.

3 counties above 50% 28 counties 40% or higher National average is 18%

Top 18 counties are in eastern Kentucky

 Which region has the highest rate of high school graduates? Lexington Owensboro - Henderson  Northern Kentucky Bowling Green - Hopkinsville

 Which region has the highest rate of college graduates? Lexington Louisville Northern Kentucky Bowling Green - Hopkinsville

Agriculture and Mining’s Share of Labor Income Nostalgia Economics Agriculture and Mining’s Share of Labor Income Includes tobacco, corn, soybeans, equine, cattle, pork, chickens, logging, coal mining, oil and gas production……

Kentucky’s 120 counties, the most per square mile of any state 1780 - 1912 “The original motivation for having so many counties was to ensure that residents in the days of poor roads and horseback travel could make a round trip from their home to the county seat and back in a single day, as well as being able to travel from one county seat to the next in the same fashion” – Counties, The Kentucky Encyclopedia, John E. Kleber, editor, The University Press of Kentucky, 1992. Pike is largest, 788 sq. mi. Kentucky’s 120 counties, the most per square mile of any state Horse, at 4 MPH, would take 16+ hours to get from Majestic to Pikeville and back Average county size is 330 square miles, so if county seat is central, a horse could make the round trip from border in 5-6 hours.

How far could a Kentucky resident travel today, round trip, in 6 hours? Well, three hours each way, averaging 45 MPH, would be 135 miles. For a round region, that would imply a government center serving 57,000 square miles, larger than Kentucky’s total of 40,000 square miles. The largest economic region is Lexington, with 6,800 square miles and 26 counties. The longest travel time round trip, using a car at 45 MPH, would be 4 hours. So, transportation improvements have allowed access to a ‘local’ government center to be the same now for a region containing 26 counties as it was 200 years ago for one county. Constitution requires each county to have County judge, county court clerk, county attorney, county treasurer, county sheriff, jailer, coroner, surveyor, three to eight justices of the peace, and three to eight constables. In counties; where the fiscal court is composed of commissioners, three commissioners must also be elected The state also pays for a county attorney, PVA, jails, DMV, in every county.

Thank you! Go to http://kentuckyeconomicassociation.org/ to download a copy of this presentation.