FRANKFORT — A proposal that would set a debt limit on state spending cleared the Senate State and Local Government Committee Wednesday. Senate Bill 56, sponsored by Sen. Joe Bowen, R-Owensboro, imposes a 6 percent cap on General Fund debt.
That means that the state could not spend more than 6 percent of the revenue to the General Fund each year to pay debt on bonds it has issued. If the state exceeds the 6 percent level, the General Assembly could not authorize new debt until the debt level falls below 6 percent.
Exceptions would be allowed if the governor declared an emergency due to a major threat to public safety and four-fifths of the members in the Senate and in the House authorize higher debt.
The measure would not take effect until 2014.
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The committee approved the bill 7-1. The sole "no" vote, Sen. Walter Blevins, D-Morehead, said the measure could hamper creating jobs by limiting debt.
The proposal is an effort to rein in the state's debt, said Bowen, who said it is now about 6.3 percent of the General Fund and exceeds $6 billion.