A new constitutional amendment that restricts how much debt the Commonwealth can carry took it’s first steps in Frankfort today. The amendment is sponsored by state Sen. Joe Bowen, a Republican from Owensboro. It caps state spending to six percent of annual revenue.Currently, the state has spent 6.3 percent more than it has taken in. The measure passed the Senate State and Local Government committee today.
“This is a bold move, I can assure you the public will embrace,” Bowen says. “And having said that ultimately the public will decide whether this is a good measure or not. Because it’s going to be on the ballot. You know, we’re not making this decision, the public is. So I would certainly defer to them because I have heard a lot of support for this.”
Bowen’s bill has a companion in the House, but the House bill caps spending at five percent of revenue. The bill is a favorite of Tea Party groups across the Commonwealth.
It excludes the road fund, the infrastructure authority and universities from the equation, because they rely almost exclusively on bonded debt.
As to why to cap spending at six percent, instead of a higher or lower number, co-sponsor Sen. Damon Thayer says six percent is generally where credit rating agencies like the state to stay under.
“On the six percent, the bond rating agencies use that number in the figure that they would like us not go over,” Thayer says. “We being the General Assembly generally have tried to stay around that number. This of course would set that in the Constitution.”
The bill must pass the Senate and House before landing on this fall’s ballot.