Kentucky Gov. Steve Beshear has signed House Bill 7, allowing the state's public universities to issue their own bonds secured by specific fees to fulfill pent-up capital needs. The law authorizes $363.3 million of bonds to be sold by six universities for 11 projects, including dormitory renovations, new student centers, and athletic facility improvements.
"Because of our universities' continued good stewardship during tough financial times, approving the use of agency bonds makes good sense for our schools and for our taxpayers," Beshear said when he signed the bill last Thursday. "The bonds will meet the growing needs of our universities with no impact on the [the state's] general fund."
Kentucky law requires the General Assembly to authorize all bonds, and to appropriate bond funds to construct capital projects, according to deputy state budget director John Hicks. State funding for the universities has been cut 15% over the last three biennial budgets.
Universities need state approval to use their own revenues to build projects or make improvements without the state's general fund revenues.
Kentucky university presidents brought the bond program to legislators to accelerate long-delayed projects. Each school enjoys strong bond ratings, and will guarantee the bonds through existing revenue streams at a reasonable cost, the presidents said.