Kansas Lawmakers OK Balanced Budget, $8.2B Road Plan

DALLAS — Kansas lawmakers approved a $13.6 billion balanced budget for fiscal 2011 on Tuesday, and sent a bill authorizing a 10-year, $8.2 billion transportation program to Gov. Mark Parkinson.

The program will be financed in part with up to $1.7 billion of bonds that will be issued by the Kansas Department of Transportation.

Kyle Schneweis, director of governmental affairs at KDOT, said the first tranche of bonds is scheduled to be issued this summer.

“We’re looking at an issue of about $300 million,” he said. “We postponed or deferred some road maintenance projects when the budget got tight. This money should get us back on schedule.’

Schneweis said the first tranche is expected to be issued as Build America Bonds.

The new transportation bill authorized KDOT to issue bonds totaling up to 18% of the department’s annual revenue. Based on current revenue projections, the cap would support up to $1.7 billion of bonds over the 10-year span of the program, according to Schneweis.

The road program will be financed with existing taxes, an increase in registration fees for large trucks, and a portion of the sales tax hike approved as part of the budget-balancing bill.

The sales tax rate will go to 6.3% from the current 5.3% on June 1 and then fall to 5.7% in July 2013. Revenue from the 0.4% increase is earmarked for transportation projects in the 10-year plan.

The additional 1% sales tax is expected to generate $314 million a year.

The highway program legislation allocates $4.6 billion for maintenance and preservation, $1.8 billion for new projects, and $1.6 billion to a special city and county highway fund. The measure also provides $100 million for public transit efforts and $40 million for rail projects.

The new highway program is the successor to a 10-year, $13 billion program that expired in 2009. That program was financed with $1.3 billion of highway revenue bonds and $210 million of bonds supported by general fund appropriations.

The state’s highway revenue bonds are rated AAA by Standard & Poor’s, Aa2 by Moody’s Investors Service, and AA by Fitch Ratings.

Parkinson said the new transportation program will benefit the state’s economy now and into the future.

“As we continue to work our way out of this recession, this new transportation plan will be a tremendous economic development engine for our state, creating tens of thousands of jobs throughout Kansas and investing billions into local communities,” the Democratic governor said.

Approval for the budget and transportation bills came on the 89th day of the Legislature’s 90-day regular session.

Parkinson — who had vowed to veto any budget bill that relied on spending cuts to compensate for a projected revenue shortfall of more than $500 million in fiscal 2011 — praised lawmakers for increasing the sales tax rate.

“The one-cent sales tax is a temporary solution which prevents permanent damage to our children’s education, our communities’ public safety, and the care we provide to vulnerable citizens,” Parkinson said.

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