DALLAS - The Kansas House Transportation Committee has endorsed a bill establishing a new 10-year, $17.7 billion comprehensive statewide transportation program, but a Senate bill raising taxes to support the effort is unlikely to make it out of committee.
The Senate Transportation Committee has completed hearings on SB 323, which would authorize Kansas Department of Transportation to issue up to $1 billion of 20-year bonds for the program, which would finance highway, airport, public transportation, and railway projects.
HB 2382, which includes a comprehensive outline of the 10-year effort, does not limit the amount of bonds the state could use for the transportation program. It allows KDOT to issue bonds as the proceeds are needed, with total annual debt service not to exceed 18% of the department's annual revenue.
Kyle Schneweis, chief of governmental affairs for KDOT, said he expects the enabling legislation to pass in the House, but doubts the financing plan will be considered by the full Senate.
"I don't see this going anywhere in the Senate," Schneweis said. "I haven't heard anything that indicates it will get beyond the study phase in the committee."
The proposed 10-year plan - which would go into effect July 1 if the House version of the bill were approved by the Legislature - had been under development since 2006, he said.
Schneweis said the department would prefer the debt service ceiling of 18% of annual revenues in the House version to the monetary limit on the amount of bonds that can be issued in the Senate bill.
"The House bill gives the department the authority to issue bonds on its own authority, with a ceiling on debt service based on annual revenues, and the Senate took that out in favor of the limit of $1 billion of bonds," he said. "We're hoping for the 18% capacity, because that gives the department more flexibility to finance projects as long as we're responsible enough to ensure we don't exceed the debt service limitation."
The existing 10-year transportation program, which will expire June 30, set a bond issue volume limit similar to that in the current Senate version of the new program, Schneweis said.
"We think the 18% limit on debt service is the better option, because by the end of this program we are working on projects that have been on the books for 10 years," he said.
Schneweis said debt service on the department's outstanding debt is about 12% of total revenues, but will increase to 17% in 2012.
"That does not assume any increases in state tax revenue or federal highway grants, so if the proposed taxes were to be enacted that would drop the percentage of revenue going to debt service on the outstanding bonds," he said.
The Senate bill would raise the state tax on motor fuels by 6 cents over five years, bringing it to 30 cents per gallon by 2014. Other provisions would increase the state sales tax by 0.25% to 5.55% on Jan. 1, 2010, and raise motor vehicle registration fees.
