KDOT requests $2.6 billion for FY2025, plans $1.2 billion in IKE bonds; FY2026 request falls to $1.7 billion

Kyle Anderson, presenting the Kansas Department of Transportation's (KDOT) budget analysis, told the House committee the agency's revised FY2025 request was $2,600,000,000 — $233,300,000 (10 percent) above the prior approved level — and that the FY2026 request is $1,700,000,000, a $647,800,000 (27.8 percent) reduction from FY2025.

Anderson said the FY2025 increase largely reflected a large number of highway and bridge projects beginning construction in that year. "The large sums of contractual lettings in the KDOT budget are in part due to the fact that when a project is set to start, it may be a multiyear project, but those projects are allotted in full in the budget the first year," he told the committee.

He flagged a $179,400,000 increase in contracts for highway and bridge projects (noting this is driven by IKE program lettings), a $9,900,000 request for innovative-technology financial assistance to local communities, and line items adding regular-maintenance salaries (an increase of about $4,100,000 and 45 FTEs). Anderson said KDOT proposed $1,700,000 for construction-inspection program salaries with additional FTEs for inspection oversight and testing. He also noted several program decreases tied to reorganizations and vacancy patterns, and described capital-improvement requests that included large rehab-and-repair totals in the construction portfolio.

Bridal Yorkie, assistant director in KDOT's Division of Administration, provided revenue and financing context. Yorkie said KDOT is not SGF-funded; its principal revenue sources are sales tax (KDOT receives a share), motor fuels taxes (currently $0.24 per gallon for regular fuel and $0.26 for diesel, per the presentation), and federal reimbursements. She said KDOT expects to increase bond proceeds in 2026, part of a planned issuance profile tied to the IKE program.

Yorkie and Anderson described a previously announced plan to issue roughly $1.2 billion in bonds for IKE over several years; KDOT reported it had issued $200,000,000 in 2025 and planned to issue $400,000,000 in 2026. Yorkie said debt service is subject to a statutory cap that limits debt service to 18 percent of revenues and that current projections keep KDOT under that cap.

The presenters explained why the construction program total drops between FY2025 and FY2026: KDOT budgets the full cost of a project in the year it is let (creating year-to-year variation in the budgeted lettings), while actual payouts are scheduled across multiple years. Anderson and Yorkie used the Polk/Quincy viaduct project as an example: the committee was told the project was budgeted in the year it was let (about $239,000,000) but will pay out across multiple years; committee members asked how KDOT would handle cost overruns, and Anderson said the agency would reassess available funding and adjust as projects evolve.

On operations (what KDOT calls "AC ops"), Yorkie said the approved operations cap is a binding constraint and the submitted FY2025 operations request was modestly higher than the approved level (the approved AC ops line was cited as $344,000,000). She asked the committee to consider flexibility for snow-and-ice spending given recent expensive weather events (the presentation noted a recent event cost about $10,000,000).

Members of the committee asked several clarifying questions about FTE counts, the difference between lettings and cash flows, and ordinary versus extraordinary transfers. Representative Hoye and Representative Resmond pressed for clarifications on the governor's numbers and multi-year projects; Representative Blum raised concerns about local transit funding and safety issues raised by constituents.

The presenters concluded with a summary of where KDOT stands relative to the IKE preservation and modernization benchmarks and said KDOT expected to meet preservation targets and to complete remaining modernization lettings in the near term.