State officials kick around possibility of tax increases to fund new transportation plan

Funding for highway plan could come from higher fees, levies on fuel

? Key state officials on Monday said that increasing taxes for a new transportation plan would help the economy by providing jobs.

“This is an investment in our state, and our local districts, and with that, there is going to be a cost,” said state Sen. Dwayne Umbarger, R-Thayer, and chairman of a special House-Senate committee on transportation.

The committee reviewed various tax increases, including adding a sales tax to motor fuel sales, increasing the per gallon tax on fuel and various increases to vehicle registration fees. The committee is expected to make a recommendation next month.

The most recent 10-year transportation plan has expired and highway advocates are pushing for a new one — in the $10 billion range — when the Legislature convenes in January.

The effort comes at a time that the state is reeling from tax revenue shortfalls and four rounds of budget cuts — with another round expected soon.

Senate President Steve Morris, R-Hugoton, said he could support a tax increase for a long-term highway plan by perhaps slowly phasing it in over several years.

He and others said the tax could be sold as a way to create jobs and improve the economy by bettering the state’s transportation system.

Kansas Department of Transportation Secretary Deb Miller told the committee that putting in place a multi-year highway plan would help communities when the economy improves.

“Recessions don’t last forever,” Miller said.

State Democratic Leader Anthony Hensley of Topeka noted that the state has lost billions of dollars in sales tax exemptions passed by the Legislature during the past two decades.

“We’ve gone a long way in eroding our tax base,” Hensley said.

Joe Erskine, deputy secretary for finance and administration for KDOT, laid out various scenarios either to fund a full 10-year transportation plan, a less expensive maintenance plan, or a delayed plan that included maintenance and improvements.

“You could slice and dice this a thousand different ways,” Erskine said.

For example, removing the sales tax exemption on motor fuels, which was part of several scenarios, could produce $3 billion over 10 years.

Pat Hurley, executive director of Economic Lifelines, which advocates for transportation spending, said a new highway plan could help pull the state out of its current downturn.

“The state, we recognize, is facing an unprecedented fiscal deficit, and record high unemployment rates. So what is the answer? The state needs to enact a major economic development and jobs program,” he said, pointing to successes of previous highway programs.

The committee discussion followed a review of the state’s economy by Alan Conroy, director of the Kansas Legislative Research Department.

The state faces a $460 million deficit in the current fiscal year. He said although the national recession is over, the state’s economy has historically lagged the rest of the nation in coming out of a recession.

“We have a lot of concerns on when things will turn around in Kansas,” he said.