KDOT and the Kansas state budget situation

[J N Winkler]

On the principle that late is better than never (these problems have been brewing since 2012), I thought we should have a thread on the Kansas state budget situation and how it affects KDOT funding.

The following is a partial excerpt from an email which Economic Lifelines, a transportation advocacy group, sent its subscribers yesterday:

Last week, Economic Lifelines - along with KAPA-KRMA, KCA, and the KS Asphalt Pavement Association - hosted a bus tour for legislators. It was an opportunity for them to learn firsthand about the current conditions of the state highway system in Topeka and the surrounding area, the cost for projects when the system hasn't been maintained, and the need to respond to emerging needs throughout the state. We are excited to look for more opportunities such as this in the future.  This excursion was a well-timed educational opportunity as legislators take up budget and tax ideas that include hearings on things like the motor fuel tax and the budget proposal which on the House side, would allow KDOT the ability to bond to address the most critical needs until meaningful adjustments can be made to the State General Fund revenue structure and sales tax revenues are able to flow to the state highway
fund.

While the legislature continues to work through budget and tax proposals we need EL members now more than ever to remind legislators that its important that they support meaningful policy changes that will allow them to restore the funding of T-WORKS back to the State Highway Fund.

Please use the following talking points when you email and call your representatives:

* We cannot allow critical preservation levels to fall to only $44 million in FY18. This is far below the $380 million KDOT says is necessary to keep our system in  its current condition.

* The minimum preservation levels haven't been met since FY15 and our roadway conditions will need higher levels of investment if the legislature doesn't act now.

While both motor fuel taxes and bonding are potential options on the table to get more revenue to critical infrastructure projects, below you will find some information about each.

Motor Fuel Tax Facts

* $0.05/gallon raises $90 million

* Cannot be swept to fill other budget needs

* Is a declining revenue source

Short Term Bond Facts

* Puts $400 million back into projects over the next two years

* Cannot be swept to fill other budget needs

* Maintains three legs of the revenue stool for the state highway fund

* Ties up future revenue in debt service

It is imperative that immediate action be taken to restore funding which meets minimum maintenance levels.

For the past few years, we have been dealing with a "Bank of KDOT" situation in which funds have been swept from KDOT to backfill budget gaps that are widely blamed on Governor Brownback's signature tax policies, which include a tax cut for LLCs and a flattening of tax brackets that included a reduction in the top rate of state income tax.  For a while, mild winters and lower-than-expected bids on major projects made it relatively painless to shuffle money away from KDOT, but over the past year we have seen cuts to KDOT's planned monthly lettings.  Patience has run out statewide and many of Brownback's supporters in the Legislature lost their seats in the 2016 election.  In the current session the Legislature passed a rollback of the tax cuts, but Brownback vetoed it and override failed by three votes in the Senate.

Brownback's budget proposal, which has not been receiving much traction in the Legislature, claims to bring the budget back into structural balance while preserving the core of the tax cuts by making appropriate reductions in spending and making passive LLC income (i.e., operating income that is not reinvested in the business) subject to tax.  At the state budget level, however, KDOT spending is divided into construction, maintenance, and local support, and Brownback is proposing to drop KDOT construction spending from a FY 2015 high of $768 million to $307 million in FY 2019 while keeping maintenance and local support flat at about $135 million and $300 million respectively.  The numbers are laid out in page 157 of the following PDF:

http://budget.ks.gov/publications/FY2018/FY2018_GBR_Vol1--UPDATED--1-12-2017.pdf

[mvak36]

On the principle that late is better than never (these problems have been brewing since 2012), I thought we should have a thread on the Kansas state budget situation and how it affects KDOT funding.

The following is a partial excerpt from an email which Economic Lifelines, a transportation advocacy group, sent its subscribers yesterday:

Last week, Economic Lifelines - along with KAPA-KRMA, KCA, and the KS Asphalt Pavement Association - hosted a bus tour for legislators. It was an opportunity for them to learn firsthand about the current conditions of the state highway system in Topeka and the surrounding area, the cost for projects when the system hasn't been maintained, and the need to respond to emerging needs throughout the state. We are excited to look for more opportunities such as this in the future.  This excursion was a well-timed educational opportunity as legislators take up budget and tax ideas that include hearings on things like the motor fuel tax and the budget proposal which on the House side, would allow KDOT the ability to bond to address the most critical needs until meaningful adjustments can be made to the State General Fund revenue structure and sales tax revenues are able to flow to the state highway
fund.

While the legislature continues to work through budget and tax proposals we need EL members now more than ever to remind legislators that its important that they support meaningful policy changes that will allow them to restore the funding of T-WORKS back to the State Highway Fund.

Please use the following talking points when you email and call your representatives:

* We cannot allow critical preservation levels to fall to only $44 million in FY18. This is far below the $380 million KDOT says is necessary to keep our system in  its current condition.

* The minimum preservation levels haven't been met since FY15 and our roadway conditions will need higher levels of investment if the legislature doesn't act now.

While both motor fuel taxes and bonding are potential options on the table to get more revenue to critical infrastructure projects, below you will find some information about each.

Motor Fuel Tax Facts

* $0.05/gallon raises $90 million

* Cannot be swept to fill other budget needs

* Is a declining revenue source

Short Term Bond Facts

* Puts $400 million back into projects over the next two years

* Cannot be swept to fill other budget needs

* Maintains three legs of the revenue stool for the state highway fund

* Ties up future revenue in debt service

It is imperative that immediate action be taken to restore funding which meets minimum maintenance levels.

For the past few years, we have been dealing with a "Bank of KDOT" situation in which funds have been swept from KDOT to backfill budget gaps that are widely blamed on Governor Brownback's signature tax policies, which include a tax cut for LLCs and a flattening of tax brackets that included a reduction in the top rate of state income tax.  For a while, mild winters and lower-than-expected bids on major projects made it relatively painless to shuffle money away from KDOT, but over the past year we have seen cuts to KDOT's planned monthly lettings.  Patience has run out statewide and many of Brownback's supporters in the Legislature lost their seats in the 2016 election.  In the current session the Legislature passed a rollback of the tax cuts, but Brownback vetoed it and override failed by three votes in the Senate.

Brownback's budget proposal, which has not been receiving much traction in the Legislature, claims to bring the budget back into structural balance while preserving the core of the tax cuts by making appropriate reductions in spending and making passive LLC income (i.e., operating income that is not reinvested in the business) subject to tax.  At the state budget level, however, KDOT spending is divided into construction, maintenance, and local support, and Brownback is proposing to drop KDOT construction spending from a FY 2015 high of $768 million to $307 million in FY 2019 while keeping maintenance and local support flat at about $135 million and $300 million respectively.  The numbers are laid out in page 157 of the following PDF:

http://budget.ks.gov/publications/FY2018/FY2018_GBR_Vol1--UPDATED--1-12-2017.pdf

I guess he needs more KDOT money to balance the budget. I would hope the legislature will not accept this budget. I've had enough of him and his Reaganomics experiment (Reagan is a racist asshole  ). Isn't he supposed to be going to Italy or something? He can't leave soon enough for me.