Kansas Gov. Kathleen Sebelius signed a measure that will let the state tap revenues from bonds and sales tax to prevent cancellation of state highway projects. The law, which takes effect July 1, will maintain the state retail sales tax at 5.3%, rather than letting it drop as earlier slated to 5% in 2006.
The resulting $395 million in sales-tax revenues will let several transportation projects continue as planned over the next three years.
In addition, the state is cleared to issue $150 million in bonds soon to backstop ongoing work in the Kansas 10-year comprehensive transportation program, which began in 1999. Another $60 million in state bonds may be issued if federal funding is determined to be less than expected.
Sebelius termed the new law essential to economic recovery in Kansas. "Stabilizing the program's funding will protect thousands of high-wage jobs and ensure that Kansans continue to have the best highway system in the region," she said.
Kansas DOT Secretary Deb Millar announced earlier this year that if no legislation passed she would have to cancel $150 million worth of projects this summer and an additional $100 million each year into 2008.
Though the 10-year program was established with plans to dedicate increasing amounts of sales tax revenues to highway projects, the transportation set-asides were diverted in response to a difficult state economy to the point where no transportation funding from that source was achieved in 2002 and 2003. The newly signed bill resumes the set-aside in 2006.
