DALLAS — A new report predicts a slower than expected economic recovery in Kansas unless the state can find additional revenues to finance its next 10-year transportation plan.
The study by The Road Information Program, a transportation industry advocacy group based in Washington, D.C., said the money expected to be available from existing revenue streams will not be sufficient for adequate highway construction and maintenance programs. The state’s economy depends on an extensive, well-maintained road network, the TRIP report said.
A report released in January by a special highway finance commission appointed by former Gov. Kathleen Sebelius said the state faces a highway funding shortfall of $6.4 billion over the next 10 years. The commission estimated annual expenditures at $1.98 billion, but listed only $1.34 billion in revenues.
The state’s current 10-year, $13 billion plan will expire at the end of 2009.
Will Wilkins, executive director of TRIP, said the state’s economy and thousands of jobs in Kansas depend on an extensive and well-maintained highway system financed through state and federal funding sources.
“While the state has put this combination of federal and state funds to good use in the past, in the coming years many additional needed projects will remain stranded on the drawing board because of insufficient funding,” Wilkins said during a news conference at the state capitol in Topeka.
The TRIP report did not discuss funding options.
State lawmakers are expected to consider how to finance a new 10-year transportation master plan when the Legislature convenes in January.
The Washington-based group’s study was endorsed at the news conference by Economic Lifelines, a coalition of Kansas businesses and organizations that lobbied successfully in 1989 and 1999 for adoption of 10-year transportation master plans by the Kansas Legislature.
Mary Turkington, co-chairwoman of Economic Lifelines, said with the state’s economy in the doldrums, it could be difficult for lawmakers to increase existing taxes or establish new ones. She said the group has not endorsed specific funding sources.
Patrick Hurley, executive director of Economic Lifelines, said an adequately funded highway program is the best way to ensure a strong economy in Kansas.
Each of the past two 10-year programs generated $1.5 billion in wages, created 100,000 jobs, and provided a 300% return on investment, according to Hurley.
State Secretary of Transportation Deb Miller said the Kansas Department of Transportation has allocated $336 million to highway projects in fiscal 2010, $312 million in fiscal 2011, and $270 million in fiscal 2012.
The spending is below the $650 million in annual expenditures for highway projects during the current 10-year master plan, as well as the $415 million that KDOT said is needed each year to preserve the existing highway network.
The agency has financed the current transportation plan in part with $1.3 billion of highway revenue bonds issued over the past 10 years, along with the proceeds from $210 million of bonds supported by the state’s general fund. KDOT revenue bonds have underlying ratings of AAA from Standard & Poor’s, Aa2 from Moody’s Investors Service, and AA from Fitch Ratings.
KDOT said last year that $3 billion to $5 billion of additional highway bonds could be issued over the next 20 years, based on the amount of debt that could be supported by 15% to 25% of expected revenues.
