They call it the “bank of KDOT.” And it seems to be offering extended hours.
That’s the derisive term critics use for the diversion of huge chunks of revenue from the Kansas Transportation Department by the administration of Gov. Sam Brownback. The money — which has zoomed past $1 billion since 2011 — is shoring up the struggling general fund budget and other state agencies.
The practice, though legal, is out of hand, critics say, and impairs highway maintenance programs. The transfers not only can mean delays on current projects but will come back to haunt the state for future projects, they say.
“They’re using the cash for general fund obligations,” said Rep. Melissa Rooker, a Fairway Republican. “It’s alarming. I don’t see how we can continue to take money away from transportation at this pace.”
The state recently issued another $400 million in highway construction bonds for its 10-year T-Works program. To make that additional borrowing possible, the Legislature last session suspended a statutory cap on the department’s debt burden.
Rooker is worried that more borrowing will allow the administration to sweep more sales tax revenue from the department. So is House Minority Leader Tom Burroughs, a Kansas City, Kan., Democrat.
“We continue to fight and to encourage the governor to quit robbing the bank of KDOT,” Burroughs said.
From 2011 through the state’s 2017 budget year, transfers labeled “extraordinary” from the highway fund to the general fund or to state agencies are expected to hit $1.4 billion. That’s on top of more than $700 million in transfers in that same period that are labeled “ordinary or historically routine” — for a total of $2.1 billion.
Brownback said in a recent interview with The Kansas City Star that he was satisfied with the state’s roads program and its financing.
“We’ve got a bunch of projects going in the Kansas City area right now,” he said, including the Johnson County Gateway Project at Interstate 35, Interstate 435 and Kansas 10.
Brownback said state has benefited from low oil prices and low bonding costs, so the price tags for projects have been less than initially estimated.
“We think we’re still on track to fully complete the T-Works projects and to continue to have a robust maintenance program,” he said.
“We’ve historically had some of the best roads in the country,” Brownback said. “We’ve invested heavily in those roads and intend to continue to do it.”
Annie McKay, executive director of the Kansas Center for Economic Growth, which has opposed Brownback’s economic policies, said it’s wrong to argue there’s no downside to the money shifts.
“That’s inaccurate,” she said. “The state used to maintain highways on a schedule of 1,200 miles per year. That has dropped to 200 miles per year. We are still maintaining, but not at the level that’s needed to sustain the health of our highway system.”
McKay said that with bonds being issued for road projects, the administration can say projects are still on schedule while taking away tax revenue intended for highways. But it’s still cheating the highway system, she said.
The reason the shifts are needed in the first place is because Brownback’s tax policy reduced revenue and created huge shortfalls in the general fund budget, she said.
“We’re collecting sales taxes with the intent of maintaining the highway system, then turning around and paying for an unaffordable income tax policy,” she said.
The Legislature, dominated by conservative Republicans, cut income tax rates and eliminated income taxes for many small-business owners, steps on the governor’s “march to zero” on state income taxes.
Brownback said the state’s revenue problems arose because of the slumping agriculture, oil and gas and aviation sectors. Revenue from the state sales tax, which was raised last legislative session, also didn’t meet expectations.
The tax plan, he said, has been the bright spot.
“With all that, we’re still at a 14-year low on unemployment, and you can track it, I believe, to the small-business tax cut, where we went to zero on small business,” he said.
The tax policy’s target is jobs, Brownback said.
“The revenue will come,” he said, “and now we’re seeing good growth in our income tax numbers because we’ve got good job growth and wage growth.”
Dave Trabert, president of the Kansas Policy Institute, defended the money shifts, saying elected officials must decide where tax dollars can be put to their best use.
“If highway projects are still getting done, and there are no safety concerns but you have needs elsewhere, those are the decisions the Legislature has to make,” Trabert said. “It’s taxpayer money. It doesn’t belong to the Transportation Department or the highway contractors.”