A nonprofit publication of the Kentucky Center for Public Service Journalism

Kentucky’s record-breaking year for economic development in 2021 propelled by small businesses

Kentucky’s record-breaking year for economic development is further propelled by small businesses, as Gov. Andy Beshear announced this week the Kentucky Small Business Tax Credit (KSBTC) program fueled the creation of 339 new jobs and the reinvestment of $3.64 million in 107 businesses throughout 2021.

“We know Kentucky’s small businesses are strong and resilient, as we have seen them contribute so much to our economy over 2021,” Gov. Beshear said.

“This further proves that we are just getting started, on the heels of breaking our state’s economic development records. I’m glad business owners and entrepreneurs are using the KSBTC program to create more jobs for Kentuckians and grow their operations to new heights, as their impact on communities will last for many generations to come.”

The KSBTC program incentivizes companies with 50 or fewer full-time employees that hire and sustain at least one new job and purchase at least $5,000 in qualifying equipment or technology. Applicants can receive between $3,500 and $25,000 in credits annually.

The 339 new jobs incentivized through KSBTC this year pay well, with an average hourly wage of $25.89, excluding employee benefits. Business owners also purchased $3.64 million in qualifying equipment and technology vital to the expansion of business operations. The total incentive amount for 2021 – $1,167,700 – was distributed between the 107 approved applicants across 37 counties.

Since 2011, KSBTC helped small businesses create more than 3,300 jobs and invest nearly $34 million across 74 Kentucky counties. Prior to 2015, KSBTC on average assisted 15 companies annually. Now, the program provides incentives to over 130 small businesses per year.

Job creation and investment spurred through KSBTC advances recent economic momentum in the Commonwealth.

In 2021, the Commonwealth has shattered every economic development record in the books. Year-to-date, private-sector new-location and expansion announcements include a record $11.2 billion in total planned investment and commitments to create a record 18,000-plus full-time jobs across the coming years.

Kentucky’s average incentivized hourly wage for projects statewide in 2021 is $24 before benefits, a 9.4% increase over the previous year.

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