The proposed operating budget for fiscal year 2014 transfers $265 million earmarked for the Kansas Department of Transportation to fund a variety of programs, including student transportation costs and a subsidy for airline tickets at Wichita.

The transfer increases to $295 million in fiscal 2015 under the two-year spending plan proposed last week by Republican Gov. Sam Brownback.

Brownback transferred $205 million into the general fund in fiscal 2011, and said the practice of supporting the general fund with highway revenues would end. There was not a transfer in fiscal 2012.

The state borrowed $94.6 million from the fund in 2002 and $30.6 million in 2003.

The state general fund received transfers from the state highway fund of $143 million and $149 million.

KDOT said slow construction cost inflation and lower-than-expected debt service costs on its 20-year capital plan will allow it to move $320 million over the next two years into the fund.

The money is from the $7.8 billion statewide T-Works program being financed with $1.3 billion of highway revenue bonds.

Brownback said KDOT can save $15 million a year of non-transportation costs with his proposal for a merger with the Kansas Turnpike Authority.

KDOT’s $1.54 billion of outstanding highway revenue bonds are rated Aa1 with a negative outlook by Moody’s Investors Service, AA-plus with a stable outlook by Fitch, and AAA with a stable outlook by Standard & Poor’s.

The Kansas Turnpike Authority’s $265 million of outstanding debt is rated AA-minus by Standard & Poor’s and Aa3 by Moody’s.

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