Tag Archives: KDOT

KDOT: How to Really Create Jobs

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Many of Kansas’ failed economic  policies were justified as “creating jobs”. They often had the opposite effect. Kansas’ long tradition of good, safe roads and the thousands of jobs necessary to build and maintain them, was crippled by the diversion of funds from KDOT.
In 2010, the Kansas Legislature enacted a  10year highway/transportation program to ensure job growth, economic development, safety and overall prosperity for our state. The  $8 billion, 10 year  program was funded through a variety of sources, including dedicating four– tenths of a cent in state sales tax to the highway fund and bonds.  About half was to maintain the state highways and half was was targeted for transit, air, rail, and transportation infrastructure.
To plug budget holes caused by the 2012 pass-through tax cuts, the state began“temporary borrowing” from state highway funds. That soon turned into seemingly endless transfers from KDOT to shore up the state’s general fund, as shown in the chart. Eventually, the legislature transferred a total of $2.4 billion from KDOT to plug budget holes. Dr. Michael Babcock, from the Department of Economics at Kansas State University, estimated that for each one million in construction value, 41 jobs are created. As a result, the borrowing from KDOT cost about 130,000 good paying Kansas construction jobs.
The dedicated four– tenths of a cent in state sales tax originally generated $570 million for the highway fund. The Legislature has now restored $378 million from sales tax, but that is certainly not adequate. The 2019 Legislature put an extra registration fee on EVs which is expected to raise about $600,000 annually, which is an insignificant amount. It is also not entirely fair as EV owners pay  in other ways such as sales tax on electricity, additional personal property taxes, and a reduction in pollution and its associated costs. The most reasonable way to fund our roads into the future would be to restore the 0.4 cent in sales tax diverted from KDOT. The Legislature should then  add the additional amount necessary to insure good roads, which would come partly from sales taxes and partly from the additional taxes paid by electric vehicle owners.