Business and the Economy
Borrowing for Campus Projects
Renovations to the University of Kentucky's football stadium and the University of Louisville are among the projects that will benefit from a bipartisan General Assembly agreement is allowing state universities to use their own ability to issue bonds for capital projects. The soon-to-be approved projects were rejected during 2012 budget negotiations, but will be revived once lawmakers pass an authorization bill, House Speaker Greg Stumbo says.
The plan allows for $363-million in renovation and construction projects at six of Kentucky's eight state universities.
Stumbo says the projects were rejected because of election-year politics — because House lawmakers are elected in even-numbered years — and secondly because universities made unreasonable bonding requests.
And while many projects were rejected last year, the newly agreed upon ones are ready to start immediately.
“We had asked at the end of the last session to bring us a realistic list, what can you accomplish, what is shovel ready, what do you have the funding sources identified for, what can you accomplish in this next year,” Stumbo says.
Lawmakers will soon pass an authorization bill for the projects, which range from stadium renovations at UK to dorm renovations at many other schools. Such a bill would require only a simple majority to pass either chamber, although the bill is not expected to have any trouble, since both Stumbo and Senate President Robert Stivers support it.
The debt from the projects won't affect Kentucky's bond rating, Gov. Steve Beshear said.
“And not create any problem in terms of our debt, in terms of our ratings, and I think we’ve all become convinced that we can take this step without any adverse consequences,” Beshear says.
Eastern Kentucky University and Kentucky State University were the only state schools left off a list of projects totaling $363 million. Most of that money going to the University of Kentucky.
UK will use $250 million of the $363 million, but will its athletics department will also contribute $65 million of $100 million needed for a new science academic building on campus.
Beshear says no taxpayer money will be used to the projects, since universities have the ability to issue bonds themselves.
Many of the university presidents, including Western Kentucky University's Gary Randsell, UK's Eli Capilouto, Murray State's Randy Dunn and Morehead State's Wayne Andrews were in attendance. So were many lawmakers from both politically parties.
“These 11 projects represent critical needs across our campuses," Ransdell said. "All 11 have dedicated revenue streams that we generate at the universities, and all projects are shovel-ready, meaning they will be underway in the current biennium. The ability to make progress on these projects now is critical for higher education, and we are grateful for the leadership and support of Governor Beshear and House and Senate leaders who have all worked together to make this possible.