ATLANTA -- A recently created panel of Kentucky officials has surveyed agency heads' capital requests and come up with a four-year, $3.6 billion list of projects that would require $2.3 billion of bonds -- setting the stage for a debate over increased bonding at a time of budgetary stringency.
The Capital Planning Advisory Board, which was established by the Kentucky legislature in 1990, presented its first report on capital needs Wednesday. The board withheld judgment on most of the projects, giving its blessing to only two bond-financed undertakings: a $70 million state office building in Frankfort and a $26 million court facility in Lexington.
But the board did take note of the general types of projects it favors, easing into what is apt to be a long period of haggling over how to allocate state spending during next year's legislative session, the board's chairman, Rep. Marshall Long, said yesterday.
"What we put together was a comprehensive wish list of capital projects and some general guidelines to suggest a prioritization of items in that list," the Shelbyville Democrat said. "The problem is that we have nowhere near the fiscal means to fund that full list. And I will not support a large increase in our debt capacity to solve this problem."
Rep. Long said the committee favors projects that consolidate office space or are needed to meet federal mandates, protect the state's investments, generate an investment return, or protect life and safety of users.
But he said even these programs cannot count on funding, given that a fiscal 1992 shortfall of $155 million awaits the administration that will take office in December. Next week, Lieut. Gov. Brereton C. Jones, a Democrat, faces off against Republican Larry Hopkins, U.S. congressman from Lexington, in the race for governor.
Rep. Long said he would support only about $10%, or about $250 million, of the bond authorization requested. "The legislature probably will back funding for the facilities in Frankfort and Lexington, but even that may not happen," he said.
Construction projects composed by far the largest category surveyed in the report. Under this heading, state agencies had requested projects totaling $3.62 billion, $1.72 billion of that financed with bonds. Of this total, the state's finance and administration division alone has requested a total of $325 million of infrastructure revenue bond authority and $355 million of solid-waste revenue bond authority.
In other categories, major renovation projects totaling $325.8 million would require $224.4 million of bond funding; and major expansion projects totaling $278.4 million would require $201.3 million of bonds.
Requested bond funding is concentrated in 1993, with $1.1 billion of state-level bonds needed to fund $1.49 billion of projects. In fiscal 1994, $304 million of bonds would be used to fund a total of $640 million in projects; in 1995, $543 million of bond for $818 million of projects; and in 1996, $251 million for $516 million of projects.
When it was set up in the 1990 legislative session, the 15-member board was charged with the task of putting together a comprehensive capital improvements plan assessing the needs of all state agencies and universities. The board, which has five members from each branch of state, government, compiled its list by asking all departments of state government to submit requests for capital expenditures in the 1990-1996 fiscal years. It also asked the departments to indicate their priority on projects.
The report does not include anticipated road projects, because the legislature recently established a task force with responsibility for assessing highway funding needs.
Kentucky's $70.7 million of general obligation debt is rated Aa by Moody's Investors Service and AA by Standard & Poor's Corp.