Kansas Center for Economic Growth
Not many Kansans wake up in the morning worrying about the financial health of the state highway fund. Understandably so. But hit a big pothole on the way to work or drive a narrow, roughed up, congested roadway, and highway conditions immediately become a concern.
Trouble is, by then its too late. Crummy roads mean the states highway fund failed much earlier.
Noticeable problems can take some years to appear after road maintenance levels are lowered, bridge repairs delayed, and upgrade projects canceled. Thats why swiping money out of the highway fund can be so enticing for lawmakers. Theres instant gratification when the transferred dollars pay for some other high-profile need, and no immediate consequence for diverting the funds away from highways. The crisis comes later.
Kansas faced a crisis of deteriorating roads back in the 1980s, but Gov. Mike Hayden and legislators dealt directly with it, enacting a 10-year plan to modernize and improve Kansas highways. Two more long-term plans followed that first one, ultimately making the Kansas road system one of the best in the nation, a point of Kansas pride, and a feature that has attracted people and business to our state.
But now the Kansas road system is truly threatened. Sam Brownbacks 2012 income tax cuts choked revenue to the general fund, leaving Kansas without enough money to pay for education and other services. The highway fund became a convenient source of cash. Even though lawmakers reversed most of the income tax cuts last year, they did not stop the highway fund transfers. During Brownbacks time in office, more than $2 billion was siphoned off, and transfers continue unabated.
Highway fund dollars are not free money. Every dollar taken means a dollar less for maintenance or construction. The consequences for our roads have already shown up and will only grow if our leaders do not intervene.
Lawmakers have tried to blunt the effect of transfers by allowing the highway fund to borrow more and more money. The highway fund currently has $2 billion in outstanding debt and pays $200 million a year in debt service. And a portion of that debt has interest-only payments in the first years, with the principal payments still to come.
Neither deeper debt nor cutting maintenance provide a viable recipe for the future. So, what to do? The best answer is to immediately stop transferring money. Lawmakers could also raise the gas tax, which goes directly to the highway fund, or charge tolls in more places. Of course, all those solutions are politically difficult, especially with the general fund still recovering from the damage of the Brownback tax cuts. But inaction failing to protect the states longterm investment in roads is worse.
School finance currently dominates the 2018 legislative session, but the highway fund lurks right under the surface. The temptation will be to wait for road conditions to really slip before doing anything, but Kansans will be much better served if lawmakers fix the highway fund now, before everyone notices the depth of the potholes.
Duane Goossen formerly
served 12 years as Kansas
budget director.
