Debt Ceiling Bill Approved by Senate

Feb 17, 2013

The Senate unanimously passed a measure Thursday that would put a limit on the amount of debt the state can incur. Senate Bill 10, jointly sponsored by Sen. Joe Bowen, R-Owensboro, and Senate Majority Floor Leader Damon Thayer, R-Georgetown, would cap the state's bonded indebtedness at 6 percent of General Fund revenues. That is the generally accepted level used by bond rating agencies.

“The fact of the matter is the most important responsibility we have as elected officials is to be good stewards of the taxpayers’ dollars. This bill obviously helps us do that,” Bowen said in a news release from the Legislative Research Commission..

Under the bill, the legislature would not be allowed to exceed that amount except by a majority vote in the event of a state of emergency declared by the governor.

The measure excludes debt for universities, the Kentucky Housing Authority, and all other agencies not using the General Fund, including the stand-alone Road Fund.

Senate Bill 10 now goes to the House for consideration.