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BY BILL ESTEP
A proposal introduced Wednesday in Congress would boost efforts to create jobs in an eight-county area of southeast Kentucky where the economy has been rattled by a sharp drop in coal employment.
The bill, if passed, would create tax credits for hiring workers and speed up tax deprecation on certain business items in the counties designated as a federal Promise Zone.
The counties are Harlan, Bell, Letcher, Perry, Leslie, Clay, Knox and much of Whitley.
Republican U.S. Rep. Hal Rogers introduced the legislation with three other members of the House, one a Republican and two Democrats.
President Barack Obama designated the counties in Kentucky as a Promise Zone in January 2014. It was among the first five zones established under one of the administration’s key efforts to improve conditions in high-poverty areas.
The designation did not set aside specific funding, but gives the areas priority in getting federal money for education, job training, housing and other needs.
Many federal agencies award grants competitively. The Promise Zone designation means projects in the Kentucky counties get bonus points in the evaluation process.
Obama also proposed tax credits for the zones, but Congress did not approve that.
The Promise Zone designation has figured in tens of millions in funding so far, but hasn’t had as much punch as hoped without tax credits.
The White House proposed such credits to provide an incentive for businesses to set up shop and expand, said Jerry Rickett, president and chief executive officer of Kentucky Highlands Investment Corporation.
“I believe that the unavailability of tax credits has limited our Promise Zone counties in that regard,” Rickett said Wednesday.
Business tax credits worked to boost jobs in three Kentucky counties under an earlier federal program called the empowerment zone program, Rickett said. That program covered Jackson and Clinton counties and part of Wayne County.
The communities “were able to attract significant outside business locations and the expansion of existing businesses” because of tax credits under the program, Rickett said.
Kentucky Highlands managed the empowerment zone, and is coordinating the Promise Zone program.
Greg Drury, owner of The Portal, a pizza restaurant in Harlan, said tax credits would help him expand his business.
Drury’s idea is so set up a shop in Harlan to make ingredients such as dough and sauces for the local restaurant and one he owns in Richmond, as well as for others he wants to open in Eastern Kentucky.
The Harlan restaurant employs about 15 people, but creating a supply facility in town would create additional jobs, Drury said.
“It would be extremely beneficial for us if we could get those tax credits,” Drury said.
Rogers introduced the bill with U.S. Reps. John B. Larson of Connecticut and Steve Cohen of Tennessee, both Democrats, and Republican Joe Wilson of South Carolina.
The bill would “encourage new businesses to establish roots in the coalfields where they will find some of the hardest working, dedicated workforces in the country,” Rogers said in a news release.
Republican Sen. Bob Casey of Pennsylvania introduced a similar tax-credit bill earlier, but the Senate did not approve it.
Under the bill introduced Wednesday, employers would get tax credits of up to 20 percent on the first $15,000 of qualifying employees’ wages. The bill also would allow first-year depreciation of 100 percent of the adjusted basis of certain property.
Read more here: http://www.kentucky.com/news/state/article67878807.html#storylink=cpy
