$100 million for BRAC

Beshear touts money for Fort Knox growth

By JOSHUA COFFMAN

Tuesday, January 29, 2008 10:05 PM CST

FRANKFORT — Gov. Steve Beshear outlined his plans before lawmakers Tuesday night for a shrunken state budget.

It included an increase in Medicaid spending, along with proposals to reform early education, the justice system and economic development.

Beshear also talked about expected growth at Fort Knox as an engine to create jobs. He recommended $100 million in bonds for pre-construction on road projects and other infrastructure needs in the region surrounding the Army post.

He also announced plans to form an implementation team “to move forward and build upon the good work carried out by the initial Base Realignment task force.”

The realignment is projected to bring thousands of workers and jobs, along with millions of dollars, into the region.

“Our response will likely require state investments,” Beshear said in his speech. “But the return is enormous. … We cannot afford to miss this opportunity.”

The governor, delivering his first budget address, said little additional money would be available for much else, such as new road projects or higher education.

“Last year, while running for governor, I envisioned this first budget address to be a night where I unveiled a plan brimming with bold and creative new programs,” he said. “However, that evening will have to wait because, tonight, we deal with cold, harsh reality.”

Beshear said he inherited a current budget shortfall of $434 million, and projected revenues for the next two years to be, on average, $443 million off from the current year.

“We are in an unprecedented position,” he said, noting that budget shortfalls have impacted other states such as Florida, Maine, Rhode Island and Virginia.

Aside from telling university leaders to scrutinize their own budgets, Beshear recommended $60 million in bonds for the “Brains for Bucks” program that lures faculty and researchers to Kentucky.

He recommended additional Medicaid funding to cover increasing health-care costs and long-term care coverage for those with brain injuries.

REACTION. State Rep. Jimmie Lee, D-Elizabethtown, said the $50 million recommended for pre-construction on roads and additional $50 million for other infrastructure needs related to BRAC expansion at Fort Knox would cover costs incurred in projects during the next two years of transition.

“I thought he made a very good presentation on Fort Knox,” Lee said of the governor’s address.

Rep. Tim Moore, R-Elizabethtown, said he was happy the governor included the bonding in his budget but wished Beshear would have devoted more of the speech to it.

“I was hoping for more emphasis from the governor on just how important BRAC is for the state,” he said. However, “I think the governor has stepped up to the plate and given us a good first swing to move forward.”

“I’m just ecstatic that the governor is on board with this,” said state Sen. Elizabeth Tori, R-Radcliff. She filed a bill Monday requesting $296 million in bonds to cover the entire BRAC project and establish a commission to oversee the doling out of funds.

“This will touch, almost immediately, 11 counties,” she said.

Lee said Beshear’s focus on infrastructure and roads showed the governor understood what had been asked of him by local leaders and Fort Knox officials.

Road pre-construction, which half of the proposed bonding would cover, includes planning and buying rights of way.

Regional planning group One Knox considers the largest road projects needed to support growth at the post include extending Ky. 313 to U.S. 60 in Meade County and then into Brandenburg, creating a corridor between Radcliff and Elizabethtown running parallel to U.S. 31W and building a new connector between Bullion Road and Ky. 313.

The group estimates the cost of buying rights of way for the Ky. 313 project to Brandenburg to would cost nearly $30.

As far as other infrastructure needs, One Knox has identified $74 million in needs for water and wastewater improvements.

A task force established by former Gov. Ernie Fletcher estimated total costs for infrastructure related to BRAC at nearly $300 million.

Lee plans to meet today with a recently created BRAC subcommittee in the state House to compare the governor’s proposals with recommendations from the Army and groups such as One Knox.

Area legislators disagreed somewhat Tuesday night on just what the governor’s request meant for BRAC expansion.

“Obviously we were hoping the numbers would be bigger,” Moore said.

Lee said, given the gloomy financial forecasts, the $100 million request was more than he expected.

He said it would be cheaper in interest for the state to divvy out the money needed in each successive budget during the realignment influx, rather than all at once as Tori has proposed.

“You only want to borrow whatever you can spend,” he said. “There’s no sense in paying debt service on it.”

Lee also said more could be done with the Army to offset road costs. Thus not all of the money for BRAC influx, scheduled to be completed in 2012 is needed in this budget.

One Knox Director Brad Richardson called Beshear’s recommendation “a great start” if appropriated.

“Obviously he’s placing a priority on all of the BRAC activities,” he said, “and that’s great news, there’s no doubt about it.”

OTHER ITEMS. Beshear also recommended establishment of a taskforce to review the state justice system.

The incarceration rate at prisons has increased 600 percent since 1970, while the crime rate has only increased by 3 percent, he said.

Another issue brought up by many municipal leaders going into the general assembly session also received attention in the speech.

Beshear vowed to address the increasing costs of public pension systems in the weeks ahead, though no specifics were offered.

He also said he would propose an amendment to the state Constitution that, if passed by voters, would legalize “limited expanded gaming.”

“Right now,” he said, “Kentucky dollars are educating Indiana’s kids, providing health care for Illinois’ seniors and paving West Virginia’s roads.”

Moore spoke skeptically of expanded gaming and said projected costs have increase while expected state revenue gains have decreased.

“It’s looking like a worse and worse proposition,” he said.

Moore said he would have to analyze the budget further today since many details were not in the address.

“It seems like a lot of bond projects,” he said. “I don’t believe the state has stepped up to the plate in dealing with tough decisions.”

Lee said the amount of bonds is well below the state’s bonding capacity of $600 million and would not affect the state’s rating.

“I feel very confident about what he’s doing,” he said of the governor.

Joshua Coffman can be reached at 505-1740, or at jcoffman@thenewsenterprise.com.

This story, written by Joshua Coffman, was provided to One Knox courtesy of The News Enterprise. Read more stories from The News Enterprise at www.thenewsenterprise.com.