Date of Award
Master of Science (MS)
Economics, Finance, & Accounting
Dr. Milburn Little
If the State of Kansas is to fulfill its obligation of providing a safe and serviceable highway system for its citizens, supplemental revenue sources may be needed. The increased emphasis p l aced on the methods used in financing highways and thoroughfares by the 1968 session of the Kansas Legislature justifies that an investigation of former means of financing could prove beneficial in determining solutions to this problem. The Republican legislators favored a plan calling for a two cent per gallon increase in the state motor fuel tax to assist in payment of a proposed revenue bond issue of $300 million. The proposed bond issue would be issued in $30 million units consecutively during a period of ten years. One cent of the proposed two cent per gallon increase in the motor fuel tax would be allocated to the cities and counties for street and road construction, and the remaining one cent of the increase would be used to retire the revenue bonds. None of the roads to be financed under this plan would be toll roads. In opposition, the Democratic legislators recommended a program which included the proposed issuance of a maximum of $350 million in revenue bonds to finance construction of 612 miles of turnpikes and freeways during a five year period. This proposal rejected any increase in the motor fuel tax. The revenue bonds would be repaid by tolls from turnpikes and an annual pledge of some $25 million in gasoline tax revenues. The Legislature passed the Republican proposal. However, Governor Robert B. Docking vetoed the bill. Docking expressed his reaction to the bill as: "It seems the Republican leaders can offer no more imaginative method to initiate progressive programs for the State of Kansas than to raise taxes." Francis Jacobs, Republican member of the House Committee on Highways, stated: "I would recommend the plan that we had in the last session of the Legislature. It is a program whereby we could build roads now and pay for them later. I believe the program that we came up with and which was passed by both the House and Senate, and vetoed by the Governor, was one of the finest plans that I have ever seen in the Legislature." Although the Republicans had a distinct majority in both houses, they lacked the necessary two- thirds to override an executive veto. At the time of writing of this study the problem remained unresolved. It is the purpose, therefore, of this study to investigate the methods of highway financing employed during the fiscal years from 1963 to 1967, and to determine whether supplemental revenue sources should be obtained. It is the further purpose of this paper to evaluate the adequacy of past revenue sources, and to recommend solutions that would provide enough revenue to maintain and improve Kansas' highway system. In addition, this study will determine the amount of Federal participation in the financing of highways in the State of Kansas during the past five years. The study will also involve a discussion of the allocation of funds among specific types of projects that are necessary in maintaining a highway system.