Topeka ? Lawmakers received potentially costly news Wednesday when contractors working on the $135 million Capitol restoration project introduced the term “hyper-inflation.”

Dirk Schafer, senior vice president with J.E. Dunn Construction Co., said construction costs had been skyrocketing over the past several fiscal quarters.

“Starting in 2004, we are experiencing hyper-inflation,” Schafer told members of the Legislative Coordinating Council, which is a committee of legislative leaders.

The budget for the project includes an allowance for a 12 percent inflation rate from 2001 through 2005.

But the current predicted inflation rate during that period has increased to 18 percent, Schafer said.

Schafer attributed the increasing inflation rate to economic conditions and the weather, including the spike in the price of oil, increased demand for construction materials because of the recent hurricanes in Florida and increased construction activity in the Kansas City area, and even a jump in imports by China.

With renovation of the west wing of the Capitol under way, Schafer said, “It’s very difficult to know to what extent it will be impacted.”

Senate President Dave Kerr, a Republican from Hutchinson, said lawmakers needed to keep an eye on the effects of any increase in the inflation rate.

“We need to tighten down monitoring on this,” Kerr said.

Barry Greis, Statehouse architect, reported that the project was about 25 percent complete.

Project architect Mike Treanor of Treanor Architects, which has offices in Lawrence, Topeka, Kansas City, Mo., and St. Louis, said, “We’ve had some good accomplishments in the past year.” He said the two-level, $15 million underground parking garage had been completed and was “performing very well.”