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Archive for Tuesday, December 13, 2005

Committee allows bond proposal for state highways

Measure to be backup only

December 13, 2005

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— Lawmakers on Monday recommended the issuance of $60 million in bonds to help pay for the state highway plan, which officials earlier said needed an infusion of money.

The Legislative Budget Committee unanimously approved the motion giving the Kansas Development Finance Authority the OK to issue the bonds for the so-called Comprehensive Transportation Program.

Rep. Melvin Neufeld, R-Ingalls, the committee chairman, voted yes, but voiced some concerns after the meeting.

"The big issue to me is we don't seem to be thinking very much on what state we're leaving ourselves in for the next transportation plan," Neufeld said.

He also expressed fears Kansas' highway plan could become like Connecticut's, where all funds are going to pay off debt.

Kansas Transportation Secretary Deb Miller assured the committee that concerns the state would be over-extended in debt were unfounded.

"Clearly the financial markets don't agree with that assessment," she said.

"The ultimate measure is investor acceptance, which remains strong. Our bonds are rated AA+ and are highly sought after in the financial market."

The $60 million was authorized by the 2004 Legislature as a backup to be used only if the federal government did not allocate the full amount needed for the state to complete the transportation program on schedule.

Last week, Miller said the back-up measure was needed, or some road projects could be in jeopardy.

Monday's action marks the first of two steps before the Finance Authority can issue the bond money to the Kansas Department of Transportation.

The second step is for the State Finance Council to approve the bond issuance.

Chances are good that will happen. Three of the seven members of the Legislative Budget Committee also serve on the council, including Neufeld.

No date has been set for the next meeting of the council, chaired by Gov. Kathleen Sebelius.

Even with the additional $60 million, KDOT must fill a budget hole before completion of the transportation program is secured.

To do that, KDOT seeks a separate bond issuance of $150 million by the Kansas Development Finance Authority at the same time as the $60 million issue.

The $150 million must go a separate route for approval. The House and Senate transportation committees must recommend that money, and the State Finance Council has final approval.

Comments

average 8 years, 4 months ago

So, to pay off these highway bonds, one of three things will have to happen.

1.) The legislature will raise taxes in the future to pay them off. 2.) We decide in ten years that we're very happy with the roads we have and spend nothing on new projects for years, just pay off debt. 3.) Kansas has its biggest economic boom in a century and revenue goes up.

Yeah, right.

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