KDOT bonding plan wins Senate committee’s endorsement

? The Department of Transportation moved closer Tuesday to issuing $210 million in bonds this spring to prevent cancellation of already promised highway projects, despite some legislators’ concerns about the state’s increasing debt.

The Senate Transportation Committee endorsed $150 million worth of bonds on a unanimous voice vote, clearing the way for a final vote on the entire package by the State Finance Council. The council, the Legislature’s top leaders and Gov. Kathleen Sebelius are scheduled to meet at 2 p.m. Thursday.

Legislators contemplated that the department might issue the bonds when they restructured the state’s 10-year, $13.2 billion highway program in 2004, but the department wants to issue the bonds more quickly than previously anticipated. The program began in 1999 and soon faced financial problems.

While the Senate committee’s vote was unanimous, some members had misgivings about rapid growth in the state’s use of bonds. The state expects to have $3.83 billion in outstanding bonds on June 30; the figure 10 years ago was $1.14 billion.

“This wasn’t an easy vote,” said committee Chairman Les Donovan, R-Wichita.

The House Transportation Committee approved the $150 million in bonds last week. A joint committee approved the remaining $60 million last month.

The department began pushing for the bonding authority after it concluded the state wouldn’t receive enough federal highway dollars to sustain the 10-year program.

In 2004, lawmakers anticipated such a turn of events, but they expected the bonds to be issued between July 2006 and July 2008. They also set up a series of hoops through which the department must jump to issue the bonds.

A Wichita State University report released earlier this month said the state jumped from 43rd in the nation in debt in 1992 to 17th in 2004, with debt per resident reaching $1,400. That report has fueled legislators’ concerns about issuing additional bonds.

“Let’s call it an explosion, not just a rise, in debt,” said Alan Cobb, a lobbyist for Americans for Prosperity, which wants to restrict the growth of government spending. “It’s another way for legislators to avoid making difficult decisions.”

But even fiscally conservative senators said the state needs to keep the promises it made to communities when it started the 1999 transportation program. As of November, the Department of Transportation still hadn’t taken bids from contractors for 137 projects worth $1.2 billion.

“The assets being created by this borrowing will be used by our grandchildren,” said Sen. Phil Journey, R-Haysville. “I know that every time I get back to Kansas, I am thankful for the quality of our roads.”

The transportation bonds will be 20-year bonds, and Stephen Weatherford, president of the Kansas Development Finance Authority, said they would be issued by March 1. The authority handles many of the state’s bond issues.

Currently, the state would pay 4.7 percent interest to bondholders, but Weatherford declined to predict how interest rates would change in the near future. The state expects to face $16 million in annual bond payments, starting next year.

When legislators created the transportation program, they financed it with bonds, sales taxes and increased motor fuels taxes. Because they diverted sales tax revenues in later years, they restructured the program in 2004.