TOPEKA, KS (AP) Secretary Deb Miller is fighting to preserve the Department of Transportation’s reason for being — its 10-year, comprehensive program of highway, bridge and interchange improvements.
But as Miller campaigns to keep the $13.2 billion program on track in its seventh year, she, other KDOT officials and legislators face the prospects of developing a new program to follow the current one when it runs out in mid-2009. Today’s is the bigger son of a 1989 program.
Having started two programs, the state appears to have committed itself to considering a new one every decade or so — and the tax increases, diversion of existing tax revenues and gargantuan bond issues that go along with it.
“We need to be thinking about what we need to have in hand for 2010,” Miller said.
She added: “Our state is growing and evolving all the time, and there are always — and there will always be — new and important needs developing on the system that if we do not meet them, we will not be putting our state in a position to grow economically.”
The immediate focus for Miller and other KDOT officials is saving the existing program, of course.
When the state enacted the current program in 1999, legislators increased motor fuels taxes, set aside sales tax revenues and authorized bonds for transportation projects. But after the economy slumped in 2001, they began diverting funds for road dollars to education and other government services.
Legislators scrambled to fill the resulting hole in 2004, to keep Miller from canceling $550 million worth of projects already promised. Part of the plan was promising up to $210 million in new bonding authority for 2006 and 2007.
Miller now wants to issue all $210 million in bonds this spring, to help cover a shortfall in federal funds. She’s hoping legislators will act by Jan. 31.
But KDOT would continue to face funding problems in the near future. Even if Miller gets her way, costs will start outstripping the department’s revenues by mid-2009.
The same issue arose in the mid-1990s, when legislators started contemplating the end of the eight-year 1989 program. To maintain the existing system — and make some improvements deemed important by communities — a new, bigger program was necessary.
The 1989 program was worth almost $7 billion, or an average of $870 million a year. The 1999 program’s annual average cost is $1.3 billion.
“Doing comparable work is more expensive with the effects of inflation,” said Sen. Phil Journey, R-Haysville, a member of the Senate Transportation Committee. “It’s only natural that we spend more because it costs more to get the same level of improvement.”
Meanwhile, communities propose projects as they grow and change. And a big, multiyear highway program also can act as a hedge against bad economic times, generating high-wage construction jobs even in the leanest of years.
Still, a question lingers: When does the state get to the point when it doesn’t need a bigger, more expensive highway program every decade?
“The answer, really, is that you never get to that point,” Miller said. “Sooner or later, you always need to have some conversations about additional revenue, even if all you’re trying to do is maintain where you are.”
That’s not a good scenario for legislators who favor smaller government, oppose tax increases and worry about state debt.
Alan Cobb, who leads the Kansas chapter of Americans for Prosperity, worried about even Miller’s relatively modest bonding proposal for next year because of how much debt the state already has incurred.
The state has issued more than $3.8 billion in bonds it has yet to pay off. A decade ago, the figure was only $1.14 billion, or less than a third of today’s total.
“Let’s remember what we’ve already borrowed,” Cobb said. “We’re going to certainly urge caution.”
Cobb’s group also worries about the prospects for higher taxes. Americans for Prosperity supports changes in the Kansas Constitution to make tax increases more difficult and rein in growth in government spending. The group argues that such controls will give Kansas a more vibrant economy — and help it catch up to states that are growing more quickly.
And in a report released in May, the Center for Applied Economics at the University of Kansas questioned the conventional political wisdom that a big highway program necessarily boosts the economy. In fact, the center said, studies suggest there’s a wash statewide, as projects help some areas but draw economic activity away from others.
“The problem may be a tendency to over-invest in the highway system — in other words, the problem has been a failure to ration investment to only the most critical projects,” the study said.
Cobb argues legislators should consider the balance between good roads and burdensome taxes.
“The question is, how much is enough for highways in the state?” he said.
Kansans face answering that question in only a few years.