The Budget Debate Begins

Tuesday, January 28th, 2014

Like many Kentuckians reviewing their family finances for a potential big purchase this year, state lawmakers are considering how much debt they’re willing to incur to move the state forward.

In his budget address last week, Gov. Steve Beshear proposed $1.96 billion in new debt to help fund a number of construction projects. That would put the state’s debt ratio (the amount of money borrowed as a percentage of the General Fund) at just over 7 percent, slightly above where it stands now and a point higher than the 6 percent debt capacity level favored by some legislators.

During yesterday’s Kentucky Tonight discussion about the budget, the panel debated spending priorities for the state and the best ways to pay for those items. The guests were Sen. Bob Leeper (I-Paducah), chair of the Senate Appropriations and Revenue Committee; Rep. Rick Rand (D-Bedford), chair of the House Appropriations and Revenue Committee; House Minority Whip John Carney (R-Campbellsville); and Sen. Ray Jones (D-Pikeville).

The group raised other concerns about the governor’s budget plan, including paying for the wage increase for teachers and other school personnel like bus drivers and cafeteria workers. Carney, who’s a teacher in Taylor County, applauds the idea but says the raise itself may consume most if not all of the SEEK funding increase proposed for primary and secondary schools. “Some districts would have enough money to cover both that teacher raise and a classified [employee] raise,” explained Carney. “But most districts I’ve spoken to, that would only be enough money to basically do the mandated teacher raise and the local districts then would be subject to have to do the mandated classified raise. So it could be it could be a net loss in some ways, in terms of monies.”

On the revenue side of the budget equation, the panel agreed that tax reform is needed, especially if it can be done in a way to make Kentucky’s business climate competitive with neighboring states. But the group disagreed on expanded gambling as a source of additional revenue: Rand favors the idea, while Carney, Jones, and Leeper oppose it.

Several of the seven House subcommittees that handle budget matters have started collecting testimonies and data that will be folded into the lower chamber’s budget plan. Rep. Rand said he hopes to have that document ready to send to the Senate the first week of March. He challenged his colleagues to be bold in building the new budget. “It’s time to think where do we want to be 10 years from now, 20 years from now, 50 years from now,” Rand said. “If we set our expectations too low, we’re going to get the same thing that we’ve always got.”

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