The Kansas Department of Transportation

August 9, 2023

The kansas department of transportation is an agency responsible for building, expanding and modernizing public roads in the state of kansas. It also maintains bridges and administers programs for public transit, railroads and airports. KDOT provides a variety of services, such as weather information, online safety sessions and manuals for highway contractors. It also offers publications on utility accommodation and paving, as well as research reports on topics such as traffic noises.

Fitch's upgrade to AA-reflects the strong performance of KDOT's pledged revenue stream, which is anchored by motor fuels tax (MFT) and a share of statewide sales tax and vehicle registration fees that are constitutionally dedicated to transportation purposes. The agency's recent operating surpluses have helped reduce its dependence on annual cash flow borrowing and SHF transfers to support general government operations. However, the agency's financial profile remains exposed to the risks associated with the resumption of extraordinary SHF transfers during future periods of budgetary stress without constitutional or statutory measures that turn this revenue stream into a closed loop and eliminate the need for such extraordinary transfers.

In addition to the SHF, the agency relies on other sources of revenue to fund debt service and its capital program. Those other resources include MFT, vehicle license fees and fuel taxes, as well as federal aid, including the Build America Bonds subsidy. In fiscal 2022, SHF revenues not including federal funds expanded by 8% compared to the prior year and covered debt service by a solid 5.9x.


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