Transcript President’s Update – Board of Overseers

AQUILA GROUP OF FUNDS®
Update on the
Kentucky Economy
Dr. James R. Ramsey
April 23, 2010
AQUILA GROUP OF FUNDS®
Honored to serve as a Trustee of the
Churchill Tax-Free Fund of Kentucky
since its inception in 1987
(I was 12 at the time!)
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Since we last met,
it’s been another crummy economic year…
…but things seem to be getting better.
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We know that nationally times have been unprecedented…
Peak
Dec-07 (IV)
Mar-01 (I)
Jul-90 (III)
Jul-81 (III)
Jan-80 (I)
Nov-73 (IV)
Dec-69 ((IV)
Apr-60 (II)
Aug-57 (III)
Jul-53 (II)
Nov-48 (IV)
Decline in real GDP
-3.70%
0.40%
-1.40%
-2.90%
-2.20%
-3.20%
-0.20%
-1.10%
-3.70%
-2.60%
-1.70%
* Lowest level during the current recession. The next two quarters (2009: III and IV) have been positive.
Sources: NBER, BEA, and BLS.
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National Non-Farm Employment
300
200
162,000
100
0
-100
-200
-300
-400
-500
-600
-700
-800
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In Kentucky,
it wasn’t much better…
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Kentucky Employment Collapse
(Nonfarm employment in thousands)
1890.0
Dec '07
1872.4
1870.0
1850.0
Oct '00
1833.6
1830.0
1810.0
1790.0
1770.0
Jan '99
1769.4
Jul '03
1777.6
Mar.'10
1756.8
1750.0
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If there is any good news for Kentucky
Joblessness across America
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Loss of Manufacturing Jobs
in KY Continues to be a Major Concern
320.0Jan '99
308.3
300.0
280.0
260.0
240.0
220.0
Mar '10
205.6
200.0
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Concerns for Kentucky April 2010
• Have we hit bottom?
• How long will it take to regain over 100,000 lost jobs?
– Where will new jobs come from?
• Healthcare
• Logistics
• Business Services
• Energy
• Impact on state budget – state services
– Assuming we have a budget!
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Adding to the state budget problem,
we have the “Leaky Bucket”
• Medicaid
• Corrections
• Public employee benefits
So we will face state budget problems for a while
(at least for four or five years)
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Spending Priorities
$20,000
$19,031
$18,000
$16,000
$14,000
$12,000
$10,000
$9,207
$8,000
$6,000
$6,945
$4,000
$2,000
$0
Higher
Education
K-12 Education
Inmates
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Forecasting / Guessing The Future
• Slow / very slow recovery in Kentucky
• 2015 before we see as many jobs in Kentucky as we
had in 2007
(Normally I am more optimistic and my forecasting record is suspect
– I thought we were going to be better in basketball this year)
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