TAX NEWS - JUNE 2010

Kansas Tax: Kansas to use tax, fee increases for transportation

01 June 2010 -- Governor Mark Parkinson has signed a bill into law that will have Kansas truckers paying even more to the state to get transportation work done. But you won't find supporters touting that factoid. They want to concentrate on what the new 10-year, $8.2 billion plan will mean to the state's economic recovery.

"This bill isn't only about the miles of road, rail or runway; it's about putting Kansans back to work," Parkinson said in a statement. Kansas Transportation Secretary Deb Miller shared similar sentiments about the bill, H2650.

The transportation program includes an increase in the state's sales tax and truck registration fees, authorizes the use of bonds, as well as a toll study. About $2.7 billion in new revenue will be added through 2020. Combined with existing revenue, the plan's price tag reaches $8.2 billion.

Bonds totaling $1.7 billion will be issued to foot the bill for road, rail, air and transit projects. The state's sales tax will increase four-tenths of a cent starting in Jan. 2013. It is estimated to generate $1.5 billion for transportation.

Another aspect of the bill could have long-term effects on transportation in the state. The transportation secretary has authority to recommend construction of a new toll or turnpike project, or the designation of an existing highway as a toll or turnpike project if a feasibility study provides a favorable result.

Sen. Stephen Morris, R-Hugoton, said there is already talk about stretches of road that could be tolled.

"We've talked about additional toll roads from time to time. There is a possibility of tolling on a couple of stretches of highway," Morris recently told Land Line Now.

Morris said one portion of roadway that is getting a long look is the stretch of Interstate 35 from Emporia to Kansas City, KS.

The Owner-Operator Independent Drivers Association adamantly opposes the conversion of non-tolled roads into toll facilities. OOIDA's position is to not categorically oppose so-called "green field" projects – new roadways built to add capacity to highway networks – as long as certain conditions are met. The Association does, however, stand against double taxation, diversion and other burdens that toll roads can put on highway users.

Truckers have been singled out to pay an extra $135 to help foot the bill for the transportation plan. In 2013, the first of two registration fee hikes will be implemented for trucks. The fee will rise from $1,735 to $1,820 the first year. A year later the fee will rise to $1,870. Meanwhile, vehicles weighing less than 12,000 pounds will not pay more.

Sen. Ralph Ostmeyer, R-Grinnell, was opposed to the $131 million increase in registration fees for trucks. He tried to get lawmakers to pull the provision from the bill since cars, motorcycles and other small vehicles avoided a fee hike.

Included in the bill is a requirement that the Kansas Department of Transportation spend at least $8 million in each of the state's 105 counties during the next decade.

Critics of the funding plan raised concerns about the lack of protection in the bill to prevent the governor from dipping into the highway fund whenever the state is in a pinch for money elsewhere. They cite the hundreds of millions of dollars that have been raided from transportation over the past decade.