LAWRENCE - A University of Kansas official says Gov. Kathleen Sebelius’ plans to eliminate wasteful government spending would be greatly aided by careful analysis of state road projects before they are started.
Sebelius and Lt. Gov. Mark Parkinson recently announced BEST II, an effort to help the state streamline its spending practices. The initiative is named after the Budget Efficiency Savings Team that operated from 2003 to 2004. Arthur Hall, director of the Center for Applied Economics in the University of Kansas School of Business, was executive director of the initial group and said performing cost benefit analyses on proposed road projects — to measure their expense against their potential value — could save the state and taxpayers large sums of money and at the same time show what projects are the most important.
Hall, a loan executive with Koch Industries at the time of the first BEST effort, started the Center for Applied Economics in 2004. One center project analyzed academic studies from across the nation relating to spending on all road-related projects and economic growth. The study found over the last several decades such spending generally has little impact on economic development, contradicting the common belief that road projects automatically trigger economic stimulus.
In Kansas alone, taxpayers fund about $1 billion in road-related spending per year, one of the largest line items in the state budget. More than 75 percent of the savings found by the initial BEST effort came from renegotiating better terms for road-related debt.
“No one questions the economic importance of building and maintaining good roadways and safe bridges,” Hall wrote in a recent opinion piece to Kansas newspapers. “However, it is a mistake to think that every road is a ‘good’ road from an investment perspective. Taxpayers can ‘lose’ money by building underused roads just like investors have lost money by building underused buildings or fiber-optic networks.”
Performing cost benefit analyses also could identify projects that need more attention, Hall said. However, a sustainable process for executing such analyses does not exist at the state level.
“Right now there is insufficient economic discipline in the decision making process,” Hall said.
Yet, the opportunity to implement an analysis process exists. The Kansas Department of Transportation recently released a draft of a long-range capital improvement plan for transportation spending. The draft is the next phase of a $13.6 billion, 10-year comprehensive plan started by Kansas lawmakers in 1999. Hall said the governor’s office is in position to make regular analyses a reality.
Implementing an independent, apolitical body — such as the Consensus Revenue Estimating Group, which consists of the head of the Kansas Division of the Budget and economists from regents universities — would be ideal, Hall said.
“A disciplined cost benefit-cost evaluation of future road spending would mark a fundamental change for the better in the way the state does business and promises a huge payoff for the BEST II effort — and Kansas taxpayers,” Hall said.
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