Senate panel approves debt limit bill that would essentially cut off most bonding until 2021

A bill that would cap Kentucky’s total general fund debt at 6 percent — and essentially halt the state from selling certain bonds for eight years — won unanimous approval Wednesday from the Senate State and Local Government Committee.

The measure, SB 10 sponsored by Republican Sen. Joe Bowen of Owensboro, sailed through the committee 9-0 with Democratic Sen. Walter Blevins of Morehead passing.

Bowen’s bill would cap general fund debt at 6 percent. The total debt is currently at 8.39 percent, he said.

Bowen told Sen. Chris McDaniel, R-Taylor Mill, that the legislation effectively would place a moratorium on new bonding until 2021.

However, the measure doesn’t place restrictions on new debt taken on for transportation projects — paid for through the road fund — or university construction and other projects paid for specifically through agency fees. It would not affect the university bonding bill that includes Commonwealth Stadium upgrades .

Bowen told the committee Kentucky ranks 10th in debt per capita with each Kentuckian owing $14,589. He noted Kentucky’s bond rating has dropped. And Forbes published an article listing Kentucky among six “death spiral states.”

“For me, this is no longer a financial issue. This is a moral issue,” Bowen said.