Two transportation advocacy organizations Thursday expressed dismay Gov. Sam Brownback sought to navigate through a state government budget crisis by delaying highway construction projects worth more than half a billion dollars.
The Brownback administration already had transferred $2.4 billion from the T-Works highway program to address revenue shortfalls, and the latest emergency led to shift $185 million more into the deficit-reduction column. That decision is accompanied by delays in starting 25 highway projects.
“Over the last six years, the transportation budget — taxpayer dollars which ensure the safety of Kansans and the viability of our economy — has been used to fill holes in the budget,” said Michael Johnston, chief executive of Economic Lifelines. “This has always come with the promise that critical transportation projects would not be impacted significantly. This time, the cut is too large, and it is clear that the promise has been broken.”
Bob Totten, executive vice president of the Kansas Contractors Association, said there was reason to be skeptical of a Kansas Department of Transportation assertion that $550 million in projects would be merely delayed. He said the construction may end up cancelled.
The hit list, revised Thursday, includes 14 projects worth $271 million in the upcoming fiscal year, nine projects worth $247 million in fiscal year 2018 and two projects valued at $35 million in fiscal year 2019.
“I just don’t really see them coming back,” Totten said. “It’s frustrating our leaders don’t understand what they’re doing to the transportation system.”
He said Koss Construction of Topeka, one of the region’s larger concrete paving firms, responded to previous KDOT slow-downs by turning to Nebraska, Oklahoma and Arkansas for work. In Great Bend, he said, Venture Corp. sent one-fourth of its asphalt paving workforce to Oklahoma.
KDOT Secretary Mike King, who defends transfers of KDOT revenue to the state’s general budget, said Kansas’ infrastructure network would remain solid. None of the delayed projects are in Shawnee, Douglas, Jefferson, Jackson, Pottawatomie or Riley counties.
“The overall good condition of the 10,000-mile state highway system won’t be impacted,” King said. “Nor will these delays affect projects that are already underway.”
King said the governor’s directive wouldn’t alter $150 million in state fuel tax revenue distributed annually to city and county governments for road work.
House and Senate members return to Topeka next Wednesday to begin considering remedies for the latest revenue shortfall. In the 2015 session, state taxes were raised to close a substantive budget shortfall. Brownback said he wasn’t interested in back-to-back tax hikes.
The state’s revenue struggles coincide with adoption by Brownback and the Republican-led Legislature of reductions in personal state income tax rates and repeal of the state income tax paid by owners of 330,000 businesses in Kansas. The supply-side economic goal of the tax policy was to generate business investment and expand jobs, but there is little direct evidence the plan succeeded.
Aggressive deficit-reduction options outlined Wednesday by the Brownback administration followed release of a report reducing projected state revenue through June 2017 by $348 million. That equates to an anticipated deficit in the current and next fiscal year of more than $290 million.
In addition to KDOT adjustments, Brownback recommended delaying state contributions to the pension system and selling off future tobacco company payments to the state in exchange for a lump-sum amount.
The governor also called for continuation of a $17 million cut imposed in March on state universities in the Kansas Board of Regents system.
Shane Bangerter, chairman of the Board of Regents, said the Legislature needed to partner with universities to make stable state funding of higher education a top priority.
“Higher education provides the workforce that keeps Kansas companies competitive and our state economically strong. Reducing funding to our state universities increases the cost of education to our students and is detrimental to the future prosperity of Kansans,” Bangerter said.
John Bardo, president of Wichita State University, said two budget alternatives offered by Brownback feature continuation of the 3 percent reduction to state universities in fiscal 2017. The third option shared by Brownback contained a 5 percent cut in state aid to the three largest universities in the system — WSU, Kansas State University and the University of Kansas. This option also would apply the 3 percent hit to community colleges.
“The outcome won’t be final until the Legislature reconvenes and has a chance to act, we are assuming a reduction of about 5 percent,” Bardo said. “We will weather whatever occurs at the state level. All of us on the executive team remain committed to avoiding layoffs or furloughs.”
The third, least-preferred option offered by Brownback to legislators would reduce state funding to K-12 public schools by $57 million. In response, the Kansas Association of School Boards said Brownback and GOP legislative leaders promised the new block-grant system of funding public schools would protect districts from reductions for two years.
“We are deeply concerned this is on the table,” KASB said. “Our members say there needs to be another option and that is raising revenue to avoid these cuts.”
Brownback also recommended the Legislature approve the sale of future tobacco settlement payments to Kansas for a one-time sum of approximately $158 million. The bulk of the annual payments from national tobacco companies has been invested by Kansas in early-childhood education.