ATLANTA -- Kentucky legislators were prepared last Friday to approve a $10.2 billion budget for the 1994-96 biennium, after resolving a dispute over bond funding for economic development projects.
As of late afternoon, the full Senate had approved the spending plan on a 26-to-12 vote. Legslative sources said they expected the House of Representatives to soon follow with its assent to the compromise budget hammered out in a conference committee on Thursday.
The lawmakers, acting on the 12th day of a special session called by Gov. Brereton Jones, were expected to compromise on $288.5 million of new state debt for the biennium that starts July 1, including $138.5 million of bonds for general infrastructure and economic development projects. An authorization for $150 million of state highway bonds had not been in dispute.
House members had originally sought full funding for about $300 million of infrastructure debt sought by Jones, while many senators had opposed such outlays as excessive. Jones had vetoed an earlier biennial budget approved at the end of the state's regular legislative session, which ended April 12, that had not included any new debt authorization.
On Friday the two chambers were expected to agree on a non-highway debt bond package that included $63.2 million for parks, more than $10 million for economic development, with the remainder directed to schools, flood control, building safety programs, and prisons.
To approve the authorization, however, lawmakers were expected to make $68.2 million of the bonds contingent on the state revenues exceeding originally targeted goals for this fiscal year, fiscal 1995, and fiscal 1996. Basing their estimates on unexpectedly strong sales tax, personal income, and corporate tax collections this year, state officials anticipate a $39.7 million surplus in fiscal 1994, a $30.4 million surplus in fiscal 1995, and $32.2 million in fiscal 1996.
When passed, the budget goes to Jones, who can use his line-item veto to cut debt service appropriations out of the budget. Legislative leaders plan to keep the General Assembly in session for up to 10 days in case there is a veto. If Jones does not act on the budget in that time, the bill will become law.
Mindy Shannon Phelps, Jones' spokeswoman, said Friday that the governor has received a copy of the budget and will review it "line by line over the weekend and indicate Monday where we stand."
"I am pleased that the legislative conference committee has agreed upon a budget that saves our state parks," Jones said in a statement issued Thursday after the committee agreed to the compromise on the bonds. "However, I am puzzled that important long-term economic development and education projects were not included when there is complete agreement on their merits and our ability to finance them with a conservative no-new-taxes budget."
The bond package as authorized by lawmakers "puts us on a right track in terms of our borrowing," Sen. Michael R. Moloney, D-Lexington, said in an interview Friday. He said he expected the governor to approve the spending package, which provides $4.98 billion of funding in fiscal 1995 and $5.22 billion in fiscal 1996.
Moloney noted that because $448.1 million of outstanding debt will mature over the next two fiscal years, even after the sale of the $288.5 million of authorized bonds, the state will actually have $159.6 million less in appropriation-backed bonds to pay off at the end of fiscal 1996.
According to Ed Sergent, staff administrator for the legislature's Capital Projects and Bond Oversight Committee, Kentucky's appropriation-backed debt will stand at $3.74 billion at the end of the current fiscal year.
Many projects important to both the governor and many representatives were expected to be left out of the final budget package.
These include: $46 million for a library at the University of Kentucky in Lexington, $25 million for a Northern Kentucky convention center in Covington, $25 million for a Commonwealth Convention center in Louisville, $35 million to build the second phase of a state prison in Muhlenberg County, and $21 million for a football stadium and research building at the University of Louisville.
