FRANKFORT — A Senate committee approved a bill Wednesday that would limit Kentucky's level of debt and essentially halt any new debt until 2021.
"This is no longer a fiscal issue," state Sen. Joe Bowen, R-Owensboro, told the Senate State and Local Government Committee. "This is a moral issue. In my opinion, it's immoral to pass a law to pass on to future generations irresponsible decisions that we make here in Frankfort."
Bowen's legislation was approved by the Republican-controlled Senate last year but stalled in the Democrat-controlled House.
Senate Bill 10 would not allow debt payments to exceed 6 percent of the state General Fund, which pays for most state programs.
The calculation would exclude debts that are repaid using other sources of money, such as university funds, the state road fund and money generated by agencies such as the Kentucky Housing Corp.
The measure would have the practical effect of stopping new state debt until 2021, when, according to Bowen's estimate, the 6 percent limit would be achieved. Kentucky's annual General Fund debt obligation now takes up 8.39 percent of the state's largest pot of money.
"We continue to add more debt than we pay off," and bond rating agencies recently lowered their financial outlook for Kentucky to "negative," in part because of the state's high level of debt, Bowen said.
He told the committee that Kentucky's debt level ranks fifth in the nation when viewed as a percentage of gross state product, a measurement of the state's economic output. The debt level as a percentage of personal income ranks seventh in the nation, he said.
The state debt for each person in Kentucky amounts to $14,859, which ranks 10th nationally, he said.
The committee approved the bill with nine votes in favor and none against. Sen. Walter Blevins, D-Morehead, passed.
The measure now goes to the Senate for consideration.