Cities see economic boost after fairness law

Photo illustration by Greg Eans, Messenger-Inquirer | geans@messenger-inquirer.com 14 cities in Kentucky have enacted fairness ordinances prohibiting LGBTQ discrimination in employment, housing and public accommodations, including the state’s two largest cities, Louisville and Lexington. While the discussion surrounding the passing of an ordinance is often dominated by emotion and ideology, studies and those officials leading “fairness cities” have shown that these non-discrimination policies are an economic driver and make their communities more attractive to business interests.

As the vote on a potential Daviess County LGBTQ Fairness Ordinance looms, emotions are running high as certain sects of the community see the passing of an ordinance as a governmental step to guaranteeing basic human rights, while others view the potential passing as a slippery slope toward jeopardizing their religious rights.

However, there is another perspective that is devoid of emotion or ideology -- economic impact.

While the prospect may sound strange, the reality is that while only 14 of Kentucky's cities have passed an ordinance, 100% of the Fortune 500 companies headquartered in the state have such policies along with the top 25 manufacturing/support service firms, according to the Kentucky Cabinet for Economic Development.

There are several economic theories surrounding "inclusion economy" and its positive effects on the economy.

Specifically: human capital approach, post-materialist values, strategic modernization and capabilities approach. All focus on different aspects of how and why "inclusion policies" have been adopted and what potential impact they may have.

Essentially these theories highlight that the inclusion of minority groups, in this instance LGBTQ, permit these groups to not only thrive and excel allowing them to aid unencumbered in the building of a community, but also makes the community more attractive to entities that would aid in the overall long term economic strategies of cities, counties, states and nations, according to the Williams Institute on Sexual Orientation and Gender Identity Law and Public Policy at UCLA School of Law.

While Owensboro-Daviess County's own economic development organizations, the Greater Owensboro Chamber of Commerce and Greater Owensboro Economic Development Corporation, along with the Kentucky Cabinet for Economic Development were not willing to speak to the validity of these theories or the potential economic impact of LGBTQ inclusion policies, Kentucky Chamber Vice President of Policy Development Kate Shanks was.

"We've seen the devastating economic impact these bills (discriminatory) have had in states like North Carolina," she said. "We oppose and discourage any discriminatory legislation that would hinder any individual's or organization's desire to do business in or with the Commonwealth. The Chamber's mission is to foster a positive environment that enables business growth in Kentucky, and we believe such legislation to be bad for business."

Under the umbrella of the ongoing discussion surrounding a proposed ordinance in the Owensboro-Daviess County community, or any community for that matter, numbers and the potential of theoretical economic develop through inclusion policies could be considered cheap, especially given that anyone can find a study and generate numbers that bolster their views. What is more tangible, however, is the tale of Midway and Georgetown -- two of Kentucky's fairness cities and how the passing of inclusion policies has impacted them.

Midway, located in Woodford County, became the eighth Kentucky city to adopt a Fairness Ordinance in 2015 and the "sky didn't fall," said Midway Mayor Grayson Vandegrift. Since the adoption of the ordinance, the city has grown 500 light-industrial jobs and has grown into a cultural hub of sorts, he said.

"The boom started shortly after we passed," he said. "Those jobs came at an industrial park that we own with the county that was a failed endeavor until 2015. Suddenly, that fall, we attracted our first plant and the next year we attracted our white whale, Lakeshore Learning Materials out of California. We were their first east coast distribution hub. They built a 500,000-square-foot facility and created 250 jobs in our community becoming our largest job provider."

Midway recently beat out Beaumont, Texas in a Lake Shore expansion and the company will be constructing another facility and will, after completing the facility, be a provider of 350 jobs in the area.

"I heard people say that so many companies would be sued; that we wouldn't have jobs left in town; it's funny now," he said. "People said the sky would fall and the opposite happened. I think these ordinances make people take another look at us and say, 'Here is a city where everyone is welcome.' I don't see how that isn't an advantage in a capitalist society. Midway University has grown to its largest enrollment and all of those other factors have added up for us. Our increase in tax revenue is remarkable. We have almost tripled in infrastructure, services, parks, road projects; it has been nothing but good. I think we have proved that you can't argue that a fairness ordinance is bad for business; you can look at the sheer numbers here; they are staggering. No one anywhere can say it is bad for business."

Georgetown, located in Scott County, became the 13th city in Kentucky to pass an ordinance on Sept. 10 after two-and-a-half-years, said Georgetown Mayor Tom Prather. Initially, Prather asked his council to participate in the drafting of an ordinance and, at the time, they had "little appetite" for the discussion and voted four to three to stop all discussion of an ordinance, he said.

"When it came back, it was handled much differently," he said. "Many concerns centered around the potential impact on small businesses brought to the forefront by the Hands On Originals lawsuit. We developed language that if you are asked to create content that is counter to your closely held belief, you may decline to do that and you are safe from these ordinances. However, if you decline to make me a birthday cake because I am a gay male, that would violate the ordinance. That would be discrimination against a protected class. Content is protected, a decision not to serve individuals is not. That clarity made it possible for our council to pass the ordinance. It passed 5-3 without me having to break the tie. It was a win for the community."

While Georgetown is certainly a different animal than Midway, especially given how new their ordinance is, Prather's mindset is the same as Vandegrift's.

"Typically emotion trumps logic every time and that is what makes these conversations so difficult; in the moment, they become so pitched," he said. "We still have council members trying to add amendments to gut the ordinance and some characterize myself as being against religious freedoms. In terms of public policy, this is heavy lifting for administrative and legislative bodies; however, it is worth the effort. We will hit a point of equilibrium where it is accepted and can function, but the passions have to dissipate."

To Prather, the path forward centers around "swaying away from old stereotypes," he said.

"Cities have the ability to transform themselves," he said. "To transform and grow, these types of steps are necessary in aiding us as a community to move forward. Toyota Motor Manufacturing flew the Pride Flag on Pride Day this year. That is a pretty good indicator from your largest corporate citizen. We have known for decades that economic development is synonymous with quality of life and no one has done it better than Owensboro quite frankly. Providing a quality of life is important in attracting people and companies. To add to Owensboro's physical amenities would be an ordinance guaranteeing an inclusive and welcoming town which would build on the cultural offerings. I think absent that culture, Owensboro-Daviess County will suffer long term in an economic sense. What I believe will happen in Daviess (County) and here is that it will calm down."

Jacob Mulliken, 270-228-2837, jmulliken@messenger-inquirer.com, @JMulliken3

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