And I am so glad you are back as a group in Louisville this year.

I think you can count on our entire community to welcome you as well. More and more Louisville residents recognize the ways in which we all work together … for the benefit of us all.

When the state helps invest in a downtown multipurpose arena … and restaurants and hotels thrive… when our fair & exposition center is expanded … drawing thousands of people … for events as diverse as the Senior Olympics and recent World Series of Videogames… we all enjoy the benefits…like sales tax revenue that ultimately ripples out to benefit every corner of Kentucky.

We have other things in common... your citizens and my citizens, your governments and mine.

We are at a critical point as we face challenges from ….

· Aging and inadequate infrastructure … roads, sewers, water service… and in some cases, dams.

· Overcrowded jails ... with escalating costs…are creating tremendous stress on limited tax revenue. In Louisville, our Corrections Department budget is the 3rd largest among all our city departments. . . with costs that are growing at a rate that far outstrips revenue growth (10 percent higher for 07-08 a year when revenue is up roughly 4 percent) -- and that does not include our juvenile detention facility’s budget.

In Louisville, we have been granted a waiver not to house state inmates on an ongoing basis because our jail is so crowded. But we still average 125-175 state inmates on a typical day who are being transferred to other facilities, including many to your jails. We lose money with each and every one – we are reimbursed at $30.94 per day and our cost is $57 per day. Do the math: it’s thousands of dollars a day.

You all know this issue. I know dozens of Kentucky counties have shut down their jails because of the costs.

· Perhaps most important among the challenges we have in common is the soaring cost of pensions and health care for our workforce. Louisville’s pension payments have doubled in the past three years … a figure echoed in Davies County … I read the other day … and in other counties across Kentucky.

Our pension share was $31 million in 2004 … and we’ll pay $66 million in the year ahead – at a time when our number of employees has actually gone down. We expect that number to be $100 million in two years. . . No wonder this problem is being called a “ticking time bomb” … sparking government workforce cutbacks from Covington to Owensboro to Hopkinsville.

Oldham County, one of the most prosperous communities in the state… laid off 10 percent of its work force. Its leader … my neighbor one county over… Oldham Judge Executive Duane Merner … puts it this way: “The pensions are killing us. The jail is killing us. .. the state needs to either provide funding help… or give local governments more tools to solve their problems.”

I agree. We need more options.

I am not discouraged. Because I believe we are all ready to work together… like never before… for solutions.

And I know this: The man who wins the race for governor this fall … will be an important partner.

I can’t stay for today’s governor candidate debate.

But I hope you will listen up in a few minutes as the candidates share their plans to meet these sorts of 21^st century challenges for communities across the Commonwealth.

I hope our citizens will also understand that we are at a real crossroads in moving our state forward – from these issues … to enormous challenges related to education. // “An enormous precipice of a crossroads” … to quote a character in a popular TV series. //

I hope you have a productive conference … and enjoy exploring Louisville. These are exciting times here … not only with that new arena, but a host of new projects downtown … and the largest city parks expansion in the nation. Please come back soon.