Kentucky Chamber of Commerce CEO Ashli Watts

Kentucky Chamber of Commerce CEO Ashli Watts, shown in her office in Frankfort, Dec. 31, 2019.

FRANKFORT, Ky. (WDRB) — Ashli Watts is no stranger to the halls of power in Frankfort, having been a lobbyist for the influential Kentucky Chamber of Commerce since 2012.

But now Watts is set to become a fixture of the state capital for decades. She became president and CEO of the chamber in November, succeeding David Adkisson, the former Democratic mayor of Owensboro who retired at 66 after leading the chamber for 15 years.

At 37, Watts is not only the first woman, but the youngest person, to lead the state’s premier business organization.

A native of Elizabethtown who graduated from Campbellsville University and the University of Louisville, Watts said in an interview last week that she hopes to hold the job at least as long as Adkisson and possibly longer.

“I have never talked about my age so much except the last couple of months,” said Watts, adding that despite her youth, she has “quite a bit of experience” in Frankfort.

Watts said she’s one of six women who lead state chambers and called her appointment “a good reflection of today’s workforce and of the working mother that I am.” (Watts and her husband, Ryan Watts – who leads the state’s oil and gas association – have 4- and 7-year-old children).

In a wide-ranging interview, Watts discussed how she wants to strike a bipartisan tone at time when the business lobby is increasingly associated with the Republican Party; the chamber’s priorities for the 2020 legislative session that begins Tuesday; and how she thinks the state can bring in more tax revenue while continuing to lower its income taxes.

Time to ‘hit the reset button’ on partisanship

Regularly the top or second-biggest spender on lobbying, the state chamber is backed by UPS, Toyota, Chase Bank, Humana and Brown-Forman, among other top contributors. It also represents thousands of smaller businesses.

The group has enjoyed a string of policy wins the last three years after Republicans took complete control of state government. Amid Donald Trump’s 30-point win in the 2016 presidential contest, the GOP also flipped the historically Democratic state house and held on to its super-majorities in the state house and senate in 2018.

The chamber steers clear of most social issues, including the flurry of anti-abortion bills that the Republican-controlled General Assembly has passed since 2017.

But the chamber’s economic agenda — issues such as right-to-work legislation and reducing taxes on businesses — largely overlaps with that of the state GOP. That has led some, including Democratic Gov. Andy Beshear, to cast the chamber as an arm of the Republican Party.

During last year’s campaign, Beshear snubbed the chamber’s invitation to a forum, calling the officially nonpartisan organization “a major supporter of (former Republican Gov.) Matt Bevin and his harmful agenda for working families.”

Watts said she was “disappointed” in Beshear’s comments, saying the chamber has a long history of working with elected officials from both major parties.

“We represent thousands of employers from across Kentucky — small business, large business, everything in between. And I assure you they don’t think of us as a partisan organization,” she said.

Watts added that she hopes Beshear’s stiff-arming of the chamber was only campaign rhetoric. 

“Sometimes things that are said during the election cycle hopefully are a little different when once the governing starts," she said. "And we are very committed to working with Gov. Beshear and his entire administration on priorities that we all agree on to move our state forward." 

Beshear’s office said in a statement that the governor "agrees there is a need for more bipartisanship and set out from day one to change the tone of our politics in Frankfort.

“The governor will seek common ground with individuals and organizations across the spectrum to move Kentucky forward and create good-paying jobs, but will ensure every move is best for hardworking Kentuckians,” Beshear’s office said.

Watts, a registered independent, said the perception that the state chamber is aligned with the GOP reflects the fact that voters have given Republicans huge majorities in the legislature in recent years, and not any strategy by the chamber to cozy up to the GOP.

For example, she said, the chamber had for decades favored right-to-work legislation, which prohibits workers from being forced to support unions at organized workplaces, and repealing the mandate that public construction projects pay prevailing wages.

Republicans passed those bills immediately when they took full control of the state in early 2017.

“Our agenda has never changed," Watts said. "What has changed are the people that come in and out of Frankfort. And so sometimes the time is right for some of those policies to get approval."

The chamber also has a track record of getting results when Democratic votes were needed to pass bills, she said, pointing to the 2013 changes to the pension system for state and local workers and a 2016 law allowing low-level felons to have criminal records expunged.

Each year, the chamber gives plaudits to lawmakers who help advance its agenda. In 2019, all 13 legislators it named an “MVP” were Republicans. In 2018, only one of 14 was a Democrat.

But in 2014, when the Democrats still controlled the state House, the chamber’s MVPs were evenly split, with five Democrats getting the nod.

Watts said the chamber recognizes lawmakers who sponsor bills that pass or meaningfully advance, and with Republicans in control, GOP bills are generally the only ones that move forward.  

“We wish more of the bills would be bipartisan, but I think a lot of it is just the way the legislature has shaken out in the last couple of years,” she said.

With Democrats regaining the governor’s office after Beshear’s razor-thin victory over Bevin in November, Watts said it’s “the perfect time to hit the re-set button and maybe have a little bit better tone and rhetoric out of Frankfort.”

“I think maybe the one thing that came out of the last election in November is we know Kentuckians, I think, want us all to get along and to try to work together.”

Top priority in 2020: a tax increase

One area of possible bipartisan agreement, Watts said, is the chamber’s top priority for the 2020 legislative session: raising Kentucky’s gasoline tax.

Watts acknowledged that raising any tax is “not a popular topic” but said businesses recognize that the state desperately needs more money to repair and build roads and bridges.

“Right now we do not even have enough money in our road fund to maintain our current infrastructure, much less invest in new infrastructure,” she said.

Kentucky’s gas tax, which is tied to the wholesale price of gas, has been as high as 32 cents per gallon but currently stands at 26 cents.

A bill to raise it by 10 cents died last year after House Speaker David Osborne, R-Prospect, said Republicans could have voted it in but refused to do so because not enough Democrats were willing to join them in voting for it. A top Democrat denied that accusation.

Watts said the chamber supports other revenue-generating measures that might win bipartisan backing, such as legalizing sports betting and applying the state’s cigarette tax to vaping products.

Those won’t do much, however, to cure the projected $1 billion budget shortfall the state faces for the two-year period starting July 1.

Watts said the chamber acknowledges that Kentucky needs to generate more tax revenue to pay for things like pensions for government employees, expanding early childhood education and all-day Kindergarten statewide.

The chamber envisions “broad-based tax reform” in which the state lowers income taxes on businesses and individuals and raises the sales tax (currently 6%), following the lead of conservative states like Tennessee, Florida and Texas, Watts said.

Kentucky took a step in that direction in 2018, when the Republican legislative majorities cut the top income tax rate on corporations and individuals from 6% to 5% while applying the sales taxes to services like car repairs and veterinary care for pets.

Watts said the state can build on that approach by gradually shifting away from income taxes and toward sales taxes over a multi-year period.

But those income tax cuts, along with other breaks for businesses approved last year, are part of the reason Kentucky now faces a big budget problem, said Jason Bailey, executive director of the Berea-based Kentucky Center for Economic Policy, a liberal policy group.

“There is no question that these decisions are leading to less revenue for the budget,” Bailey said. “At a time when we need more revenue, money is actually being given away.”

Watts said the state’s budget problems have more to do with fast-growing spending on pension plans, Medicaid and incarcerating people.

Watts said the 2018 tax changes have generated more revenue for the state, though perhaps not as much as expected.

“I don’t think it’s hindered our economy at all. We haven’t maybe grown at the level that we thought we might, but it’s not like we’ve lost money,” she said. “Our spending is just growing at a much faster rate.”

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