Louisville Mayor Greg Fischer delivered his first State of the City Address to the Downtown Louisville Rotary Club Thursday.

State of the City address
January 27, 2011
Mayor Greg Fischer

Good afternoon. I am honored to continue the tradition of delivering the State of the City address before this distinguished group.

Before I look forward, let’s reflect on the past.

In 1996, city and business leaders decided to devise a comprehensive strategy to grow Louisville’s economy and to create jobs.

They commissioned Ross Boyle, a respected national consultant, to examine our city from the inside out, top to bottom. Boyle and his team traveled to Louisville and spent months getting to know our city, out economy, our strengths, our weaknesses.

Boyle and his team discovered a city too comfortable with the status quo.

Louisville’s business climate was “average,” Boyle said, and the city was losing its best and brightest young people to other cities. That stung, but it was true.

Our city was too traditional and resistant to change, Boyle said, our taxes too high and our climate for entrepreneurship “poor.” That stung, but it was true.

Louisville was a nice second-tier city but nothing more – yes, that really stung.

“Being average is not bad,” Boyle concluded in his analysis. “The question is ‘Does the Louisville region dare to dream of being special?’”

It’s been 15 years since the Boyle Report delivered a wake-up call to Louisville. So, now in 2011, I’ll pose that same question to our citizens: Do we dare to dream of being special? And I’ll add a second question: How have we been doing?

Our city has taken action, some of it quite bold, since the Boyle Report.

We merged our city and county governments, the first American city in 30 years to do so. That was major forward movement.

We created a single economic development entity called Greater Louisville Inc. to oversee the city’s business growth. That was forward movement.

We’ve increased the amount of venture capital and investment dollars in our city to nearly $800 million. That is forward movement. We have more people in college and earning degrees than ever before. That is forward movement, as well.

These all are worthy accomplishments, but only if you compare Louisville to Louisville, which is one of our historic problems.

When you benchmark us to our competitor cities – Nashville, Indianapolis, Jacksonville, as The Greater Louisville Project has done — suddenly, we don’t look so great.

Our city lost nearly 25,000 jobs in the past decade….25,000 – that is roughly the population of Frankfort. Gone. Vanished.

Yes, the recession is partly to blame. But how do we explain that the top eight of our competitor cities, including Indianapolis and Nashville, increased their jobs despite the economic downturn?

Our citizens are enrolling in college and technical schools — and earning degrees — like never before. However, when you examine our competitor cities, suddenly we don’t look so great.

With these improvements we have moved from the bottom to solidly in the middle – the second tier. That’s not good enough – and that is not the Louisville my fellow citizens tell me they want. We have no desire to be labeled as “average”.

A third of the 10,000 children born in Louisville in a typical year will not graduate from high school. Another third will pursue a postsecondary degree or credential but not graduate.

By the time those newborns are adults, only one in four will earn a postsecondary degree or credential necessary to compete for 21st Century jobs.

In another measure of progress, while other cities have invested heavily in infrastructure — new roads, new public transit, new bridges — Louisville mires itself in debates that stall the city in neutral.

We all very much appreciate that many people have worked very hard over the past decades, and were it not for that work our results would be much worse.

Our city has, in large part, weathered the recession better than others. Louisville has never been a city of high highs and low lows – and that helps buffer us from some of the major problems seen in other cities, including extremely high rates of home foreclosures and city government budgets deep in the red.

I also realize that there are significant reasons why we did not grow as readily as some other cities — whether it’s because they achieved benefits of merged government long before we did, or because they serve as the state capital with the status and jobs that brings…or they have a major airline hub that promotes business growth.

But, like any good family conversation, we need to have straightforward conversations about where we are and let the facts speak for themselves.

Those of us who love Louisville – as I do and you do – need honest dialogue about our strengths and our challenges.

We should applaud the great work of previous leaders, who have laid a solid foundation upon which we can build. Just look at our waterfront, our airport and the 20,000 UPS jobs – and the arena, which our city built and opened despite a recession. That took real leadership and risks.

So let me ask now: What’s next, Louisville?

As your new mayor, and a businessman and entrepreneur that has always tried to be the best at whatever I took on, it’s my goal over the next four years – working with you – to improve our lack of comparative results.

We need to up our game; fire our competitive juices; we need a culture change — and I need your help in evolving that culture.

We need a culture that results in the continual growth of our city so we have ample jobs and opportunities. We are big enough as a city to be a global player but we are small enough to get things done more quickly than our competition. This is a strength we need to capitalize on.

Our city will never be the largest, nor do we want to be, but there is no reason that we cannot be the best in the areas we choose to compete.

We are fortunate to be graced with a beautiful physical place, so I want to focus on the other essential elements of competitiveness – education and jobs.

We have made some economic strides the last two decades, but our economic development strategy is not working as well as we had hoped.

We need major growth and major innovation across all businesses and all sectors.

Our economic engine is not robust enough and we, collectively, need to invigorate it.

I am committed to a wholesale review of our entire economic development strategy, which has already started with my appointment of Margaret Handmaker, a retired top executive and global partner at Mercer, as my interim Chief of Economic Development.

We will ask straightforward questions –What organizations in our city are doing economic development? Are they working together? Are our goals high enough? How do they compare with our competitor cities?

Today, I am calling for a renewed economic development vision for our city — and I will be using our city resources, and be seeking contributions from corporations and foundations, to craft a new vision for Louisville.

I have spoken with the respected Brookings Institution to work with us to develop a new economic blueprint — a plan that also includes Louisville working together with Lexington to grow the I-64 corridor into a super region as well as the I-65 corridor.

The world is rapidly urbanizing and the growth of our region – our mega city – in Kentucky and Indiana is a long-term strategic imperative.

Between the intellectual and research power at U of L and UK — and our clusters ranging from health care to logistics to automotive to military — we can place ourselves on the global map as a leading region.

Just look at what happened in North Carolina when the Research Triangle was formed and Raleigh, Durham and Chapel Hill began to think regionally and act strategically.

Now I know it’s my job as mayor to make sure the garbage gets picked up and the streets are cleared of snow – but it’s also my job to look 20 years into the future.

That’s why I believe these regional partnerships are important.

Louisville must reverse course on jobs if we are to be relevant in a global 21st Century. The cause of our job losses is multifaceted. It’s tied to rates of education that are not high enough, our state tax code, and lack of sufficient investment capital.

We must embrace a new spirit that tackles our educational attainment challenge with initiatives such as the 55,000 Degrees program.

The status quo is not acceptable. The status quo will not grow enough 21st Century jobs.

We have numerous examples of world-class excellence and innovation occurring right now in Louisville — Fortune 1,000 firms and dozens and dozens of fast growth small and mid-sized companies be it ZirMed, which has a new downtown headquarters and is helping revolutionize medical billings through technology or The Learning House, which works with educators to develop online courses and online degree programs.

But we cannot innovate unless we educate – and we must educate and innovate more consistently and more boldly than ever before.

We need to unite behind education and student achievement in tour community. Too often other issues distract from making our school system the best for our children. Let’s focus on data-driven decisions and focus on ALL of the children in our community.

We need Louisville to have the best urban school district in the country, period. I realize the mayor doesn’t control the school system – but the mayor can lead and be the conscience of the community on education.

Now I want to ask for your help in an area where you can make a specific difference today.

One of the ways we ensure our youth win is to provide summer employment opportunities, especially for lower income youth.

When these young adults are exposed to the world of work, it not only keeps them off the streets, it also exposes them to another way of life while putting a few dollars in their pockets along with a sense of accomplishment.

My goal is to create – with your help – at least 1,000 summer jobs for these youth. At each of your seats today is a flyer about the Youth Opportunity Showcase, a summer jobs program for teenagers.

I am asking every company and every organization in this room to dedicate itself to hiring at least one teenager…and perhaps more…this summer. You can change a teen’s life.

And, if you can’t commit to hiring a teenager or have a place for them to work, would your company be willing to donate $1,000 or $2,000 to this very worthy program to put our young people to work in this very difficult time?

Please fill out the form and drop it off at KentuckianaWorks, over at the side of the room. Would Michael Gritton and his team raise your hands?

In addition to making education a priority, I have a few economic goals for the next four years, which I pledge today to accomplish:

1. I want to significantly increase the amount of capital and investment dollars in our city. I was among those who started the first business incubator, bCatalyst, in Louisville and I’m a venture capitalist and angel investor — so I know how to make that happen.

2. I want to make Louisville a city of entrepreneurs, where people are eager to take risks. Louisville must be mentioned in the same breath as Austin and Minneapolis when it comes to an entrepreneurial culture. We need a blast of even more entrepreneurism in Louisville.

3. I plan to create the Office of Innovation in city government – so we begin to think about breakthrough ideas that thrust our city into a new direction. This office will seek to grow jobs around economic sectors that are our city’s strengths, such as aging care.

4. I want our Planning and Design department to be the best in the country, balancing growth with sustainability, thinking and working with responsible builders to grow jobs and world class projects. I want the department to be customer focused with laser like concentration on problem solving so it encourages business and job growth. We can set that example with our many projects including Floyds Fork-21st Century Parks project and our Louisville Loop 100-mile hiking and biking path – one of the largest and most innovative initiatives of its kind in the world.

5. And last, I want to encourage our local businesses to internationalize and export more. Exports create jobs and value for those firms that pursue this competitive imperative.

While my administration crafts a new economic strategy, we also must keep improving the work of city government in these very trying economic times. Allow me to touch briefly on two items — the next decade of merger and the city budget.

In my first week as Mayor, I announced the Merger 2.0 Task Force — chaired by Former Mayor Dave Armstrong and former County-Judge Rebecca Jackson.

City government should be a learning organization just like a good business. Merger 2.0 will take a fresh look at consolidation, what went well, and what can be improved upon — to make sure all citizens are getting the services and response they deserve from city government.

The 23-member task force will also recommend ways to make Louisville an easier place to start, grow and attract businesses and it will focus on complex issues surrounding services such as recycling, garbage and junk pick-up and fire protection. The report is due in October.

I know the work of Merger 2.0 won’t be easy — and there will be competing interests — but it’s the right thing to do to move our city forward.

Finally, a word about the city budget.

The current year budget is looking pretty solid as far as revenues and expenses – and we do have a near term challenge to pay the longstanding retired firefighters settlement, estimated at $15 million. We are exploring multiple options for making that payment.

Next fiscal year, which starts July 1, city government faces a budget situation similar to that facing many Louisville families – rising costs and demand for services with revenue lagging.

We will develop the upcoming budget in the same manner we approach all issues affecting our city — with vigor, a positive attitude, using a team approach and with input from the citizens before the budget is written.

The budget for this new year offers some unique challenges. Revenues are expected to increase modestly, with property taxes expected to be flat.

Our preliminary estimate of the gap between revenues and expenditures for Fiscal Year 2012 is approximately $18 million out of a total General Fund of approximately $492 million – but we will find a way to manage.

We can also expect the trend of fewer dollars from Washington, a reality that President Obama confirmed as he spoke to me and other mayors at the White House last Friday and in the State of the Union address on Tuesday night.

We will encourage citizen participation in the budget with public meetings and hearings that will be held throughout our city — East, West, South. We will listen to our citizens’ needs and concerns – and this is a chance for the people to tell me what they want in the new budget.

The people, and their elected representatives of the Metro Council, will help set the priorities.

The challenges our city faces — from growing 21st Century jobs to Merger 2.0 to assembling the new city budget — are many.

But, it is in times of challenge that our innovative, entrepreneurial human nature thrives and produces amazing results.

In the late 1880s, after years of rapid growth, Louisville began to slow and settle — but it soon put itself on the global map again through the Southern Exposition that began in 1883 and continued for five years.

The expo covered 45 acres in what is now Central Park in Old Louisville and featured Thomas Edison’s light bulbs that illuminated the night, launching the era of modern electric lighting.

U.S. President Chester Arthur came to Louisville for the opening ceremonies. Art and music, in addition to the day’s industrial technologies, filled the massive expo halls.

The Courier-Journal, in its coverage of the event, delighted in the venture: “Louisville scarcely recognizes herself — there is something electric in the atmosphere,” the newspaper said. The influence “will be felt for years in cutting new channels for commerce, in opening new avenues for industries and in furnishing us new sources of wealth and power.”

That is the Louisville I believe we all want to see for the 21st Century – but I need your hands, your hearts, and your minds to achieve this vision.

I invite everyone in this room to join with me on an exciting four years ahead. As our city did during the Southern Exposition, let’s think big and let’s act boldly. I ask each of you to compare yourself and the contributions you can make to whatever represents the best in the world for your industry – and let’s start working to close that gap.

The future of our city depends on the effort you put forth to personally own the future of this place we love called Louisville. You and your city deserve nothing less than all-out effort.

Thank you.

Rick Howlett is host of WFPL's weekly talk show, "In Conversation."