Debt Level In Gov. Beshear's Budget Likely To Become Sticking Point
The State House Appropriations and Revenue Committee heard an overview of the governor’s proposed budget Tuesday.
Early concerns focused on a structural imbalance in the budget and the amount of new debt.
Gov. Beshear’s budget would require nearly $2 billion in new debt, in part to help fund projects such as the redesign of Rupp Arena in Lexington. That number has raised some eyebrows in Frankfort, especially among Republicans, who worry that more borrowing is risky while the economic recovery remains fragile.
But House Appropriations and Revenue Committee Chair Rick Rand, a Democrat, says he’s not encountering much resistance from fellow House members.
"It's an average amount of debt. I think the cost of borrowing is low. We're coming off a budget that had the least amount of debt in recent memory, so there's a lot of pent up demand. I think the debt that he is recommending can all be justified. I don't think there's really any fluff in there," Rand told reporters.
It’s likely to be a different story in the Republican-controlled Senate, where Majority Floor Leader Damon Thayer has called Gov. Beshear’s budget a “wish list” that includes "dangerous levels" of borrowing.
If all the bonds are issued as proposed, the governor’s budget would raise total state revenue to be spent on debt payments from 6.72 percent to a record 7.05 percent.