Kentucky Industries

Other states trying to imitate our bourbon and horse industries envy our natural 200-year advantage.  I believe we need to nurture the golden goose—not kill it.

The Commonwealth’s signature bourbon and distilled spirits industry generates 10,000 good-paying, local jobs with an annual payroll exceeding $442 million. Our distillers also bring in more than 400,000 visitors annually to visit the Bourbon Trail which winds its way through some of the most beautiful parts of our state. But sadly, even though bourbon is already one of the single most-taxed spirits in the world, the Kentucky General Assembly has increased taxes twice over the last five years. There are seven different taxes on every bottle of Bourbon in Kentucky, making the state’s tax code on spirits the third least-friendly to our native spirit in open market states.

That is why I cosponsored H.R. 1986, the Aged Distilled Spirits Competitiveness Act of 2011, to amend the tax code to end the inequitable tax treatment of aged distilled spirits such as bourbon.    Some of us in Congress are trying to give equitable advantages to Kentucky’s signature industries, including ensuring that the tax code treats bourbon fairly in relation to other businesses. Failing to do this would force even higher taxes on bourbon, leading to decreased sales and lost Kentucky jobs. In short, we are overtaxing our bourbon producers, not allowing them to compete fairly, and we are hurting the horse industry by allowing other states to be more competitive with better racing incentives.

Kentucky’s heritage has been significantly influenced by our horse industry.  Lexington is the “Horse Capital of the World” and the host of the 2010 Alltech FEI World Equestrian Games.   The horse industry employs 100,000 Kentuckians, provides $2.3 billion in goods and services, and offers another $4 billion in economic impact.  Horses have always been a key part of Central Kentucky’s identity and economy—but this could be changing.  Horse farms are starting to move out of Kentucky as other states provide better opportunities. We have seen reduced racing dates, a double-digit drop in wagering, and declining Thoroughbred sales. There are a number of forces affecting this change, but the lack of gaming options in our state is crippling Kentucky’s horse industry. Race tracks that allow casino gaming in other states have been able to provide bigger purses, giving owners and trainers bigger incentives to race in these states.

The societal costs of gaming must be recognized and dealt with, but with Kentucky’s proximity to other states that allow casino gaming, we are already experiencing the negatives of gaming while reaping none of the benefits. Why should Kentucky gamblers contribute Kentucky dollars to Indiana, Illinois, West Virginia, and Missouri school systems? 

Protecting the horse industry starts with protecting the horses themselves.  That is why I have also made my opposition to horse slaughter clear. The methods incorporated in slaughtering horses are cruel and inhumane, and it is a practice that should no longer be part of our American heritage.  Please rest assured that as Co-Chair of the Horse Caucus, I will continue to do everything within my power to ensure the protection of this great American symbol.

My wife, our three children, and I live on a farm that has been in our family for generations, and I know how important it is to keep these farms in the family. I look forward to passing that land on to my children, and then their children, so that future generations of my family work the very same land that my great grandparents worked.

Kentucky has 83,000 farms on 14 million acres.  Although the average farm size is 167 acres, when you take out a few of the larger farms, you get a truer picture which shows that Kentucky is absolutely covered in small, family-owned farms.

That is why I supported legislation, like the 2008 Farm Bill, which expanded investment in conservation, supported direct payments to farmers, provided biofuels subsidies, and funded programs and agencies like the Farm Service Agency (FSA) to help our farmers and boost Kentucky’s economy.

Because of the 2008 Farm Bill, $18.5 billion dollars were invested into local economies in Kentucky through our farmers this year. The Farm Service Agency paid out $307.5 million dollars to help farmers in need, and that investment came back to help Kentucky’s economy six-fold. Not only did it help our farmers, but it helped our local hardware and tractor supply stores stay open and all the other small local businesses farmers rely on to work their land. 

Because investments in farming are incredibly important to Kentucky’s economy, I was very disappointed by the FY 2012 Agricultural Appropriations bill which stripped away funding for rural development programs, agricultural research and conservation programs.  This legislation is not yet law, but as it continues to move through Congress, I will monitor it closely.

With the FSA, we are in year six getting ready to go into year seven of the Tobacco Transition Payment Program, which in 2010 was able to get funding to Kentucky’s growers make the transition from growing tobacco to growing other successful crops.  While tobacco might be transitioning out, we need to make sure whatever crops we yield have high returns for our farmers, but also keep US prices competitive.

Read more about what Ben is doing for your small business