By Patrick Crowley
The Cincinnati Enquirer

Northern Kentucky's angst over the state budget turned to glee Tuesday with a potential windfall of $56 million for an arena at Northern Kentucky University and an expansion of the region's community college and technical school campus.

HIGHLIGHTS

Northern Kentucky projects - $42 million for an arena at NKU and $14 million to expand Gateway Community and Technical College's Edgewood campus. Basic school funding remains $3,191 per student in the budget's first year, increasing by $7 a student in year two. School employees receive pay raises of 1.5 percent in the budget's first year, 3 percent in the second. $4 million for Read to Achieve initiative, a reading program championed by Sen. Jack Westwood, R-Crescent Springs. The budget calls for spending $173 million on technology and infrastructure projects, $67 million for economic development, tourism and agriculture development and $66 million for water and sewer projects

While the two-year $15 billion state budget Gov. Ernie Fletcher unveiled to lawmakers Tuesday night contains plenty of pain, local officials and educators were surprised with tens of millions in projects for Northern Kentucky that would be paid for with borrowed money.

"This is marvelous," said Senate President Pro Tem Dick Roeding, R-Lakeside Park. "It shows me Ernie Fletcher is really looking out for Northern Kentucky even in hard times."

Fletcher's budget is only a proposal. It still must pass muster in the House and Senate.

"We'll do all we can to keep the projects in the budget," Roeding pledged Tuesday night from Frankfort.

When Fletcher took office in early December, he inherited an estimated $1 billion budget shortfall from the administration of Gov. Paul Patton. Millions of dollars have been cut from education, Medicaid, social services and more to balance the budget in the current fiscal year, which ends mid-year.

Because of the budget outlook, there were fears of even greater cuts and little money for major construction projects in the two-year spending plan Fletcher released Tuesday. The new budget goes into effect July 1 and lasts through June 30, 2006.

Fletcher has proposed spending $42 million at NKU for a special events center with seating for up to 7,500. NKU is the only state-supported university in Kentucky without an on-campus arena. It would be the largest state-funded project ever built in Northern Kentucky and comes just about a year after completion of NKU's $38 million natural science building.

The other major expenditure for Northern Kentucky is $14 million for Gateway Community and Technical College's Edgewood campus.

Gateway President Dr. Ed Hughes said the money would be used to expand the school's nursing program, which was recently approved to offer an associate degree in nursing.

The school also wants to offer first-responder training for emergency medical personnel and hopes to receive federal funding from the U.S. Department of Homeland Security, Hughes said.

"It's very early in the process," Hughes said. "But this is excellent news."

House Majority Caucus Chairman Jim Callahan, D-Wilder, said that, while he supports Fletcher's spending plans for Northern Kentucky, winning passage could be difficult.

"We have been telling people we have a deficit," said Callahan, a member of the House budget committee. "And then we come back and say we are going to pay for these big construction projects."

Fletcher said bonds would be sold to pay for $328 million in higher education projects in Northern Kentucky and elsewhere.

"We have invested in every regional university," Fletcher said during his budget address. "They are the incubators of human capital."

Fletcher, elected in November as the first Republican governor since 1971, said he kept this campaign promise to balance the budget without raising taxes.

While Fletcher wants to borrow money to build projects on university and community college campuses, his budget does not restore money already taken from public schools and higher education. Callahan said it also appears there will be little, if any, money for state or county road projects, and only work on interstate highways will be funded.

"Even if our government was overflowing with a surplus, it would still be our duty to give the people of Kentucky the best value for every dollar they give us," Fletcher said.

Fletcher made no mention of two revenue-generating ideas that some Northern Kentucky lawmakers have pushed: Increasing the state's 3-cent tax on a pack of cigarettes, which is the second lowest in the nation, and legalizing casino gambling.

The Associated Press contributed to this report.

E-mail pcrowley@enquirer.com