Legislative update: Borrowing more money won’t fix state budget woes

By DAVID FLOYD
50th State Representative

DAVID FLOYD

It was, shall we say, an interesting drive over to Boston on Saturday for Coffee with Dave. Snow started about 6:30 and kept up a good part of the morning. My truck doesn’t have four-wheel drive so I allowed double the time to get there, and needed it. Can’t tell you how many times on the way there I heard on the radio “If you don’t need to get out, stay home!” Every time I heard it I agreed wholeheartedly.

But I’d promised to be at the Boston Food Mart at 9:00 a.m. so I pressed on. Caught up to a fellow in front of me, but managed my speed to permit plenty of separation before I’d need to build up enough downhill speed to be able to coast to the top of the next hill.

Turns out we were headed to the same spot. I was one minute late, but that was no big deal because every other person in the area was wiser than me and stayed home. The fellow in front wasn’t there to talk with me; he had gone to Bardstown for a medical appointment, only to discover that the doctor had stayed home too, and the medical office was closed. He picked up a few items and headed home. I had coffee by myself, waited for a while and then headed home too. The road crew – and thank God for them! – was out Boston Road by then and the eastbound lane was pretty good for the return trip.

Let’s see how the weather is this Saturday, when “Coffee with Dave” will be at the New Haven Public Library. They open at 9:00, so we won’t start on the dot; and I’ll bring a coffee pot and put some on as soon as we are allowed in.

Every year, Cheri and I go over our family budget together and make any necessary adjustments based on the experience of the prior year. I’m grateful that she does all the bookkeeping throughout the year, because budgets aren’t exactly what I’d call exciting. So you’ll understand that when your General Assembly does the budget every two years, I consider it the least favorite part of my job. But it’s also one of the more important parts of my job, and so I take it seriously.

In a family, it’s fairly easy to agree on a budget when you are working toward the same goal and understand the limitations. There are only two of you and, after all, you love one another.

Frankfort has maybe a thousand people who are fighting over how money gets spent. 138 of them are legislators; one of them is the governor.

So Governor Beshear presented to us last Tuesday his budget for the next two years. The frustration over lower revenue during this slow-recovering economy is beginning to show through an emphasis on even more borrowing. All his proposals for increased spending on education are good; how to pay for them is another matter.

He suggests paying for them by cutting many agency budgets by 5% and borrowing almost two billion dollars by “selling” bonds. But Kentucky is now the third-worst rated state in the country (credit rating) for bonded indebtedness. 6.7% of our budget is debt, and his proposal increases that to 7%. Independent ratings like this also determine the interest rate that we pay on ALL of our debt. The governor has asked for this new borrowing in order to increase our budget by about 20% over what it would be without the new borrowing. While increased borrowing would bring short-term pleasure, it will surely result in long-term pain.

For some people, you just cut your budget when you don’t make enough money. For others, you solve the problem by making more money. While a family might get an extra job or work overtime to increase money available, the government would need to get more money from you through our system of taxation.

We could increase opportunity for tax revenue without raising tax rates. Authorizing casinos is one prominent idea that hasn’t gained much traction in Frankfort. A better national economy is another; but that is just hoping for the best, and not reliable enough for responsible budgeting.

Surely everyone can agree that if more people were working and paying taxes we’d be better off all around, and that’s my favorite approach. How we arrive at that happy goal is what your General Assembly needs to work on most.

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