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Kentucky's economic outlook for 2021

Posted at 8:22 PM, Dec 11, 2020
and last updated 2020-12-11 20:22:53-05

(LEX 18) — The year 2020 will be remembered as a tough year, especially for the business community in Kentucky. But business leaders are hopeful 2021 will turn the economy around.

"I think 2021 obviously has a much better outlook than 2020," said Kentucky Chamber of Commerce President Ashli Watts. "We know that the vaccine is just around the corner. I think the first vaccines in Kentucky will be administered next week, and then hopefully, more medical professionals will get them in the following weeks. For many businesses, that really is the light at the end of the tunnel."

The key thing now is to help these businesses hang on until better days. And to do that, Watts says a few things need to happen. The first is more money from the federal government.

"There must be some more federal funding that comes to the states that helps all of our citizens and our business community," said Watts.

Action from state lawmakers is needed too.

"Hopefully [they] will pass some bills relating to liability reform around COVID-19, along with tackling the unemployment insurance issue," said Watts.

The unemployment insurance issue is going to be something businesses face very soon. Kentucky took out more than $800 million in loans to continue paying out unemployment insurance claims. Well, that money needs to be paid back.

"The question now is: how do we pay this loan back? And the answer is simply the business community of Kentucky has to pay it back," said Watts. "And how that will occur is through higher unemployment insurance taxes for every single employer across the state starting in January of 2021."

"I know businesses have started to get this bill in the mail, and there is quite a bit of sticker shock - about an extra $100 per employee per business for next year," said Watts. "Just know we're working closely with the governor and the legislature to try to remedy that as fast as we can."

So, there are big issues that need to be solved. But there's also some positive stuff to look forward to. The pandemic changed the way people shop and work, which could give Kentucky an advantage.

"The way that consumers now purchase things, I think, is going to be different. The world of which we know - of going to an office from 9-5 every single day - will probably change," said Watts. "So, I do think there will be some changes to the way that we do life in general, much less in the business community that may be for a very positive impact."

"We're very centrally located. We have a low cost of living. We have low energy cost. There are a lot of great things in Kentucky. A lot of people love that we actually have all four seasons. Our transportation system is easy to get around," said Watts. "So, these are all advantages when people are looking at escaping the city life, and now that we know that we can work remotely and work remotely pretty well, I do think there is a big opportunity for people to re-locate to Kentucky."