Despite debt concerns, plan to boost highway funding wins initial OK

Bonds needed to keep local projects on track

? Some Republicans on Tuesday complained about increased state debt, but then they voted to increase the debt to support the highway program.

The Senate Transportation Committee approved borrowing $150 million to refinance portions of the 10-year, $13.5-billion highway plan.

With an earlier vote by another committee for $60 million in bonds, the actions clear the way for the State Finance Council on Thursday to OK $210 million in bonds that will be sold in March.

Transportation Secretary Deb Miller has said the bonding is necessary to build the promised highway projects, including several in the Lawrence area, such as the $165 million widening of U.S. Highway 59 in Douglas and Franklin counties.

But even though the vote by the Transportation Committee was unanimous, several Republicans groused about the state’s debt burden and blamed Gov. Kathleen Sebelius, a Democrat.

“I place the blame squarely on the shoulders of the governor,” said Sen. Kay O’Connor, R-Olathe.

O’Connor said if Sebelius hadn’t pushed to divert funds in earlier years from the highway department there would be no need to borrow the money now.

But Miller said those previous transfers from the highway plan were needed when the state was rocked by hard economic times.

“I think that’s inaccurate,” Miller said when asked about O’Connor’s comments. Diversions of sales tax revenue originally set up for the highway plan started with former Gov. Bill Graves and continued as the state wrestled with a national recession, she said.

Sen. Peggy Palmer, R-Augusta, said the extra bond debt would be a burden “on our grandchildren.” She added, “We are putting ourselves in critical shape.”

But Sen. Phillip Journey, R-Haysville, said financing long-term projects with bonds was appropriate because “the assets created will be used by our grandchildren.”

Journey said keeping the highway plan intact was an important economic tool for communities across the state.

Alan Cobb, director of the Kansas chapter of Americans for Prosperity, told the committee that the amount of state debt was getting out of hand.

Since 1992, state debt has increased 832 percent from $429 million to $3.95 billion, he said.

“It is incumbent upon us to fully examine that absolute explosion in Kansas debt since 1992,” Cobb said.

Earlier this month, a Wichita State University report said Kansas ranks 17th in per-capita debt, up from 43rd in 1992.

But later in the day, Sebelius said major financial rating agencies had designated Kansas as a low-debt state. “I think the good news is, we’re not jeopardizing essential state services by building a highway plan, making strategic investments in the future,” Sebelius said.

Sebelius administration officials said the increases in state debt need to be kept in perspective.

All of the debt incurred is to finance long-term capital improvement projects; none of it is being used for operating expenses, Sebelius’ budget director Duane Goossen said.

And, he said, only 25 percent of state debt is being paid off by general tax revenues; the remainder is being retired by fees that users pay, such as for parking lots at universities.

Steve Weatherford, president of the Kansas Development Finance Authority, said only 2 percent of the state’s general tax revenue fund is used to retire debt.