Who isn’t in favor of good streets and highways? Don’t we need roads, highways, and bridges so that our economy can function? The problem with most studies that pump up the benefit of government spending is that they omit something very important: the cost of these projects, and who pays. A solution that I favor is to start the move towards market-based ownership and management of streets and highways.
Highway Spending Has not Boosted Economy
By Gregory L. Schneider
Next legislative session, in spite of the poor budget news that will greet the newly elected and incumbent legislators, the lobbyists will be out in full force demanding more money for roads in the Sunflower State. It has been 10 years since the most recent massive infusion of highway spending, and the lobbyists will argue that roads bring economic development.
Does a massive infusion of government spending and debt financing bring the results that lobbyists claim?
In 1989, Kansas spent $3.15 billion on road construction and highways. In 1999, spending on highways quadrupled to $13.4 billion, about $8 billion of it state funds and the rest from federal and local governments.
The result of such spending is that Kansas has some very good roads. According to a study by University of North Carolina professor David Hartgen, Kansas is one of six states with “zero percent poor road conditions for both rural and urban roads.” Kansas ranks ninth in the nation in per capita highway spending but 43rd in average daily traffic per lane.
In 1999, when then-Gov. Bill Graves approved the massive increase in spending on roads, it was paid for by additional taxation, including a 6-cent-per-gallon fuel tax, an increase in sales tax, an increase in the motor vehicle registration fee, and an increase in debt to the tune of $1 billion.
What has been the result of such munificence to road construction companies and contractors? Our per capita debt is higher than any of our neighboring states, as high as $1,218 per capita (Nebraska’s is $24 per capita). Our state debt (not all of it because of roads) has ballooned by 875.4 percent in the past 15 years (from $424 million in 1992 to $4.13 billion in 1997). Kansas already has the second-highest sales tax in the region; only Nebraska has a higher sales tax.
A study by the University of Kansas Center for Applied Economics in May 2005 showed the counterargument to the claim that more roads bring economic development: “Over the last three decades, the presence of more highway capital in a state has not been found to attract more private capital to the economy.”
The experience of Kansas over the past two decades bears this out. The state has spent billions on lightly traveled highways that have further burdened taxpayers with higher taxes and debt. Kansas has the best highways in the region, but private-sector development has not been a result of spending on highways.
It is high time to stop spending money on roads in the state. If roads bring development, let’s see the evidence first before building more roads to nowhere. If it can’t be proved that roads lead to economic development, then change the focus of the debate on economic development to lowering taxes, decreasing government spending and paying off debt.