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Lawmakers wrangle over debt in state budget

March 28, 2012 | | Comments 0

By Jack Brammer
jbrammer@herald-leader.com

FRANKFORT – Senate President David Williams and House Democratic leaders wrangled over how much debt there should be in the state budget Wednesday in a third day of negotiations over the two-year, $19 billion spending plan.

Leading lawmakers are trying to produce a budget by 3 a.m. Thursday, which would allow the chambers to vote Friday on a budget bill. If they don’t meet that deadline, lawmakers still could rearrange the legislative calendar so that Saturday or Monday becomes the 59th day of the 60-workday legislative session. Wednesday was the 57th day of the session, which must end by April 15.

Lawmakers hope to preserve the final day of the session to override any vetoes Gov. Steve Beshear might issue during a 10-day window in early April.

In little more than an hour of negotiations Wednesday morning, lawmakers argued over whether to include in the budget a $100 million bond for school construction and a $20 million bond for high-tech economic development construction projects.

Williams, R-Burkesville, opposed the additional debt.

House Majority Caucus Chairman Bob Damron, D-Nicholasville, said the money is needed.

“If we don’t deal with this issue in the next two years, we are going to be in a worse situation than we are,” he said.

House Speaker Greg Stumbo, D-Prestonsburg, and House Majority Leader Rocky Adkins, D-Sandy Hook, said now is a good time for the state to issue bonds because interest rates are at historical lows.

Williams countered that interest rates might rise again before the bonds are issued.

“What is the bond rating going to be two years from now? How much is it going to cost to meet this obligation? That’s the reason we can wait a year on this,” Williams said.

Williams also questioned the $20 million in debt authorization for the Cabinet for Economic Development.

Stumbo said the cabinet has done a good job in producing jobs and should have the money.

“I don’t want to second-guess them,” Stumbo said.

“You should have passed the governor’s budget then. You second-guessed him on about everything else,” Williams said.

After the meeting, Williams told reporters that the Senate does not want to depend on bonded money to pay current expenses and wants to reduce the state’s debt in anticipation that the state pension system is going to be more costly than expected.

He said it’s an appropriate issue to be debated.

The budget negotiations are scheduled to resume at 4 p.m. Wednesday.

Meanwhile, Gov. Steve Beshear said Wednesday that Lt. Gov. Jerry Abramson and he do not object to the budget conference’s agreement earlier this week to cut Abramson’s $30,000-a-year housing allowance.

Abramson commutes from Louisville daily, so it’s no big deal, Beshear said.

Beshear said he’s talking to leading lawmakers and still wants additional money for colon cancer screening, more social workers, community-based substance-abuse treatment and expansion of early childhood education.

Filed Under: David WilliamsGreg StumboKY General AssemblyRocky AdkinsState BudgetSteve Beshear

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