In her first address to the legislature, Collins asked for an additional $324 million from the
Kentucky General Assembly, most of it allocated for education. After opposition to her proposal developed among legislators during the 1984 biennial legislative session, Collins revised the tax package. She retained the corporate licensing tax increase, but replaced the sales tax and income tax modifications with a flat five percent personal income tax and phasing out the deductions for
depreciation which corporations could claim on their state taxes. With the state still recovering from an
economic recession and an election year upcoming, legislators refused to raise taxes. Collins eventually withdrew her request and submitted a continuation budget instead. Among the other accomplishments of the 1984 legislative session were passage of a tougher
drunk driving law, and a measure allowing state banking companies to purchase other banks within the state.
Consideration for vice-president By virtue of her election as Kentucky's governor, Collins became the highest-ranking Democratic woman in the nation. The only two women in the U.S. Senate at the time were Republicans, and Collins was the only woman governor of any state. At a news conference following her speech, Collins was asked again if she would be willing to be considered as the Democrats' vice-presidential candidate in the
upcoming election; she replied "No, not at this time." The party appointed Collins's son, Steve as state chair.
Education proposals In January 1985, Collins renewed her push for additional education funding and changes by appointing herself secretary of the state Education and Humanities Cabinet. Following the announcement, Collins and several key legislators held a series of meetings in every county, advocating for her proposed changes and seeking information about what types of changes the state's citizens desired. At the meetings, Collins was careful to separate the issues of her proposed education plan and potential tax increases. She believed that opposition to increased taxes had prevented her previous package from being enacted. After favorable reaction to the plan from legislators, she called a special legislative session to convene July 8 to consider the plan. After two weeks of deliberation, the General Assembly approved Collins's education plan, tripling the corporate licensing tax to $2.10 per $1,000 in order to pay for the package. The Assembly rejected a proposed five-cents-per-gallon increase in the state
gasoline tax to finance other spending. Collins followed up her success in the 1985 special session with a push for more higher education funding in the 1986 legislative session. Lawmakers obliged by approving an additional $100 million for higher education in the biennial budget. They also approved implementation of a pilot preschool program and the purchase of new reading textbooks, but failed to act on Collins's request for an additional $3.9 million to improve the state's
vocational education system. The amendment was defeated by the state's voters in November 1986, despite a Collins-led campaign in favor of it. The increased corporate tax intended to cover the cost of the increased education budget was, however, inadequate. In 1987, a plan to increase revenue through changes in the state income tax was abandoned when
Wallace Wilkinson, the Democratic gubernatorial nominee who would go on to succeed Collins, announced his opposition to it.
Toyota Assembly Plant In March 1985, Collins embarked on the first of several
trade missions to
Japan. She returned there in October 1985, and also visited
China – a first for any Kentucky governor – to encourage opening Chinese markets for Kentucky goods and to establish a "sister state" relationship with China's
Jiangxi province. According to published reports, the Kentucky location was chosen over proposed sites in
Indiana,
Missouri,
Tennessee, and
Kansas. The agreement with Toyota was contingent upon legislative approval of $125 million in incentives promised to Toyota by Collins and state Commerce Secretary
Carroll Knicely. Given Armstrong's concerns, the administration employed general counsel J. Patrick Abell to file a friendly
test case to determine the constitutionality of the incentive package. While the suit was pending, the
Lexington Herald-Leader reported that the administration had failed to include the interest on the
bonds used to finance the expenditures in its estimation of the cost; this, plus the cost overruns reported by the
Herald-Leader, had already pushed the total cost of the package to about $354 million by late September 1986. In October, Toyota agreed to cover the cost overruns associated with preparing the site for construction. Opponents of the economic enticements for Toyota joined the state's test suit. In October 1986,
Franklin County Circuit Court Judge Ray Corns issued an initial ruling that the package did not violate the state constitution, but both sides asked the Kentucky Supreme Court to make a final decision. Taub challenged the condemnation, stating that the Commonwealth did not have the right to condemn private property for the use of a for profit, public corporation. At trial, Collins became the first sitting governor of Kentucky to testify in court. She was represented by former governor
Bert Combs; Taub was represented by former governor
Louie Nunn. This was also the first time in the history of Kentucky that two former governors represented opposing parties in a legal action. Later, Toyota set up several assembly plants across the state; near the end of Collins's term, the state Commerce Cabinet reported that 25 automotive-related manufacturing plants had been constructed in 17 counties since the Toyota announcement. In 1987, Collins promised $10 million in state aid to
Ford to incentivize the company to expand its
truck assembly plant in Louisville. The state experienced record job growth under Collins's economic development plan, which included attempts to attract both domestic and international companies. The Special Fund was designated for payments to workers with
occupational diseases and workers whose work-related injuries could not be traced to any single employer. A plan proposed by Democratic state senator
Ed O'Daniel was expected to provide the framework for legislation considered in the session. On May 10, 1985, she was named to the University of Kentucky Alumni Association's Hall of Distinguished Alumni. She also chaired the Southern Growth Policies Board, Southern States Energy Board, and was co-chair of the
Appalachian Regional Commission. ==Activities after leaving office==