How much debt is prudent


It comes as no surprise that the House of Representatives Tuesday unanimously passed a 2006-2008 state budget that spends substantially more money than the original budget submitted by Gov. Ernie Fletcher.

Its an election year for all 100 members of the House.

Teachers and state employees get bigger raises. Higher education gets more funding, although not enough to avoid yet another round of double-digit tuition increases at some universities.

More roads get built. More projects get funded, and much of that funding is in the form of higher state debt than Fletchers budget proposed. The so-called Rainy Day Fund takes a major hit to balance the House budget, leaving state governments emergency fund sharply depleted.

And the capital city is well taken care of. The $31 million new judicial center is included, as well as $488,000 for renovation of the Grand Theatre downtown. Road projects locally get $52 million. Water and sewer projects are earmarked for $2.2 million. Kentucky State University is allocated $4.9 million to renovate Hathaway Hall.

Before they break out the champagne at the Grand Theatre, however, it is important to remember that the Senate now has the opportunity to craft its own budget, one likely to be more in line with Fletchers spending plan than the House.

Or not. It also is an election year for half of the members of the Senate.

Eventually, in the final days of this legislative session, the House and Senate must come to a difficult agreement on a final budget bill that also is acceptable to the governor. Nor can the General Assembly adjourn without passing a budget if its members want to avoid a shutdown of much of state government only a few months before the voters decide who stays and who doesnt stay in the General Assembly.

The key point of contention will be how much new debt the state can incur to pay for so many new projects. Theres nothing wrong with using borrowed money at low interest rates for projects that are going to improve the social and economic prospects of the people of Kentucky.

The question is how much new debt the state can afford, and we expect the Senate to turn to experts on the states finance for the answers.

Yes, even in a legislative election year.

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