Another attempt to limit state debt sparked a pitched battle in the Senate on Friday. It’s become a hallmark of the Republican legislative agenda to reign in debt incurred by the state, and their perennial efforts are likely to meet their perennial defeat in the Democratically controlled House.
This year the push takes the form of Senate Bill 94, sponsored by Sen. Joe Bowen, (R-Owensboro), the chair of the Senate State and Local Government Committee. His measure would cap state debt at 6 percent of total state revenues. Bowen argued that lawmakers have a duty to be prudent stewards of tax dollars, and that accruing state debt is immoral because it encumbers future generations.
Kentucky’s debt ratio is reportedly 6.7 percent, but Bowen says it’s 8.1 percent, if you include the nearly $1 billion spent on new county courthouses built across the state in recent years. Bowen’s measure wouldn’t apply to the road fund or agency bonds, and the debt ceiling could be raised if a state of emergency is declared.
Rescue for Teacher Pensions at Issue
Sen. Tom Buford (R-Nicholasville) was the first of a few Republicans to vote against the measure. The longtime chairman of the Senate Banking and Insurance Committee said the proposed ceiling could limit wise investments in priority programs and services. He looked to fiscal burdens already in the pipeline – namely the $14 billion unfunded liability in the Kentucky Teachers’ Retirement System (KTRS). Last week, the Kentucky House approved Speaker Greg Stumbo’s $3.3 billion pension bonding bill to address the system’s funding gap. His House Bill 4 is in the possession of the Senate and waiting for action there.
In his floor remarks, Buford also noted a pending request from the University of Kentucky to fund a cancer research center.
Some Democrats maintained the proposed debt ceiling would limit much-needed fiscal flexibility and set a trap of financial constraint amid an ever-changing budgetary landscape. Senate Minority Floor Leader Ray Jones (D-Pikeville) also raised constitutional concerns with the measure. Sen. Chris McDaniel (R-Latonia), a candidate for lieutenant governor, responded to Jones and asserted that legislators must end the compulsive spending that’s created a $38 billion hole.
The push to tackle the unfunded liability in the KTRS was at the forefront of a floor speech made by Sen. Brandon Smith (R-Hazard), one of the few GOP members to oppose SB 94.
Other Views on the Debt Limit Proposal
Sen. Reggie Thomas (D-Lexington) defined something he views as worse than debt – the failure to fund priorities vital to future prosperity.
Senate President Robert Stivers (R-Manchester) seemed to telegraph skepticism that the bill would finally pass the House this session. But he noted that many bills fail repeatedly until they get traction and eventually pass.
Senate Bill 94 cleared the Senate on a vote of 28 – 8 and now heads to the House.
Watch the entire edition of Friday’s Legislative Update to see more on this issue and my recap of the Senate floor debate on the transgender student school restroom use bill as well as discussion about a few child safety measures passed by the House on Friday.
Follow @ReneeKET on Twitter for updates throughout the day, and for a recap of the full day’s activities, watch Legislative Update, weeknights at 11 on KET. You can also follow the Kentucky General Assembly on KET’s Legislative Coverage app for your smartphone or tablet.