Kansas could tap highway funds to fill budget gaps
Kansas legislators are likely to consider diverting funds from highway projects toward general government programs next year to help solve the state’s budget problems.
Bob Totten, executive vice president of the Kansas Contractors Association, said Thursday that it believes there’s strong bipartisan support for the ongoing transportation program but acknowledged concerns that it could shrink.
“We’d be illogical not to be concerned about it,” Totten said.
Republican Gov. Sam Brownback and the GOP-dominated Legislature must close predicted budget gaps totaling more than $714 million for the current budget year and the one beginning in July. The shortfalls are in the state’s main bank account, which finances aid to public schools and spending on higher education, social services and general government operations.
The state launched a 10-year, $8 billion program of transportation improvements in 2010, financed through bonds, motor fuels taxes, vehicle registration fees and some sales tax revenue. Supporters of the program said it has created construction jobs while making the state’s transportation system safer and more efficient.
But Sen. Ty Masterson, chairman of the chamber’s budget-writing Ways and Means Committee, said spending on highway projects will be scrutinized if lawmakers must reduce overall spending.
“The narrative that we somewhat ‘steal’ from transportation is bothersome to me,” said Masterson, R-Andover. “That’s a huge area of spending.”
Rerouting highway funds is an option, House Appropriations Committee Chairman Gene Suellentrop of Wichita has said.
“Ultimately, you’re just going to have to shut down accepting more projects,” said Sen. Laura Kelly of Topeka, the ranking Democrat on the Senate Ways and Means Committee. “There will be no new four-lane highways to some of our rural communities.”
The current program is the third multiyear, multibillion-dollar transportation program in 25 years, and lawmakers have diverted funds multiple times in the past.
Under the current budget, the state is transferring $263 million from its highway fund to other uses. The figure includes $107 million to help finance public schools’ bus programs, $56 million for the Kansas Highway Patrol’s operations and $46 million to fund the division that issues driver’s licenses and registers vehicle titles.
The problems arose after legislators cut personal income taxes in 2012 and 2013 at Brownback’s urging to stimulate the economy. The state dropped its top rate 26 percent, exempted the owners of 191,000 businesses altogether and promised future reductions.
The Kansas Policy Institute, a conservative think tank, already has suggested diverting highway funds to avoid backtracking on tax cuts while preserving core services. In September, it outlined a budget plan that would reroute $423 million in highway funds in the coming budget years.
It contended the state still could complete all of the projects promised in the transportation program, largely because it has built up reserves of more than $350 million in the Highway Fund.
Legislators open their next annual 90-day session in January.
This story was originally published November 20, 2014 at 4:57 PM with the headline "Kansas could tap highway funds to fill budget gaps."