Right-wing Republican lawmakers have operated under the radar to suspend all statutory limits on highway debt, and that unprecedented authority was recently used to issue record-breaking levels of long-term debt to pay for their reckless income tax cuts this year and next.
Six lines buried deep in a 700-page appropriation bill last spring gave the Kansas Department of Transportation unlimited authority to issue debt, and in early December, without public disclosure, the agency used that authority to issue $400 million in highway bonds.
State law requires those debt proceeds to be used for improving state highways, but do not expect that to happen. Lawmakers directed that $400 million and more be swept from the highway fund to help pay for the $700 million dip in state revenues caused by income tax cuts in 2012 and 2013.
The $400 million in new highway debt represents the largest single highway bond in state history and bumps up total outstanding highway debt to $2.1 billion, also a state record. The size of the bond issue was boosted 60 percent higher than planned last January in order to stabilize at least temporarily the precarious condition of state finances.
Never before in state history has a state agency been granted unlimited powers to issue debt. Prior to this extraordinary action, state lawmakers had carefully placed specific limits on the state’s ability to borrow money. KDOT’s authority to issue unlimited debt continues through this fiscal year and next, so additional highway bonds could be issued at any time over the next 18 months.
The governor and legislative leaders went to extraordinary lengths to hide their suspension of debt limits from public scrutiny. The governor’s budget report made no mention of the suspension. Republicans who controlled the appropriations conference committee never raised the issue. The Statehouse press corps missed it as well.
Further, neither the governor nor KDOT disclosed to the public that KDOT had issued $400 million in new, record-breaking debt. Only after press inquiries last week, two weeks after the fact, did KDOT acknowledge that new bonds had been issued.
Gov. Sam Brownback and Republican legislative leaders have elevated the practice of confiscating highway funds to pay for other state obligations to a new level. In this year alone $436 million will be swept from the highway fund – the single largest transfer ever. That amount plus prior transfers during Brownback’s term brings their displacement of highway funds to a breathtaking total of $1.6 billion.
The Republican hallmark in public finance used to be caution in the use of debt. But since 2011 the Republicans running state government have played fast and loose with debt. Coupled with the billion-dollar pension bonds issued last August, they have jumped total tax-supported debt to a whopping $4.5 billion, a boost of 50 percent in five short months.
When will these Republican lawmakers fess up and defend publicly the legacy of debt they are unloading on future generations of Kansans?
H. Edward Flentje is a professor emeritus at Wichita State University.