MAINTAIN SUSTAINABLE DEBT LEVELS
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The future of Kentucky’s finances depends in large measure on its ability to manage debt in a way that is disciplined and effective. Borrowing for long-term capital projects of broadly recognized economic and social value is an appropriate use of public debt. However, debt must be limited to a level that is sustainable and does not adversely impact the overall credit rating of the state.
In recent years, Kentucky has turned increasingly to issuing bonds to sustain the growth in government spending. Total state debt in Kentucky measures more than $3,407 for each of the state’s 4.4 million people, placing Kentucky 25th in state debt per capita.
The Chamber believes the level of state debt should be closely monitored. Projects that have a related revenue stream or can create budgetary savings should receive priority consideration, and every project considered for financing should have a defined, supportable plan for repaying the debt service.