Transportation officials give update on road fund stabilization, Chamber weighs in on federal highway legislation

road fund 3 backLegislation to stabilize the road fund passed during the 2015 session is aiding in keeping funds available for important transportation projects, but Transportation Cabinet officials say there is still more work to be done.

In a meeting of the Interim Joint Committee on Transportation Tuesday, Transportation Cabinet officials discussed the devastating impact not passing a bill to save the road fund from a multi-million dollar shortfall would have had on the state.

Because of the compromise reached through House Bill 299 during the 2015 session of the General Assembly, the state’s road fund did not lose the estimated $291 million that was projected by transportation officials.

House Bill 299 set a new minimum rate for the gas tax at 26 cents per gallon, a number slightly lower than the rate at the time of the bill’s passage but not subject to fluctuations in line with changing prices at the pump. The legislation also created a 10 percent limit on annual declines in the average wholesale price of gas and moved from quarterly annual wholesale price adjustments to annual adjustments.

Deputy Transportation Cabinet Secretary Russ Romine told legislators Tuesday that because of these changes, the state’s road fund will see $125.9 million saved but still expect a decline in revenue.

Romine and Transportation Cabinet Secretary Mike Hancock said there are still struggles within their department to make sure road maintenance projects from around the state have the funding they need.

When asked by a legislator about the money the cabinet receives from the federal government, Hancock said changes need to happen to the federal Highway Trust Fund.

Kentucky Chamber weighs in on federal transportation legislation

The Kentucky Chamber of Commerce is encouraging Congress to immediately work to identify and advance a bi-partisan, sustainable and long-term solution to the dissolving Highway Trust Fund (HTF). Congress has until the end of July to pass a bill that generates the cash flows necessary to continue the HTF. The future of our roads, bridges and infrastructure are critical to our economic growth and expansion.

A short term fix was passed on May 19th, which gave a two-month extension to the HTF authorization, which was set to expire on May 31st.

Since 2001, spending from the HTF has consistently and increasingly outpaced revenues. Since 2008, $65.3B has been transferred to the HTF by the federal government. Experts predict over the next ten years, that the HTF in its current state will experience a $169B shortfall and require $175B in additional transfers to remain solvent.

The effects of the decline in revenues generated by the HTF has not only been felt on a national level, but on a state level as well. In 2014, Governor Beshear predicted that inaction by Congress may result in a loss of $185M needed for projects in Kentucky. This comes at a critical time for Kentucky, as the summer months are considered ideal for construction programs. If Congress does not act, Kentucky can expect to see delayed and reduced reimbursements for projects.

The Kentucky Chamber encourages you to contact your Senators and Representative and let them know that it is critical for Kentucky’s economy and business climate to pass a long term solution to the dissolving Highway Trust Fund.

To contact your Representative:

To contact Sens. McConnell and Paul:

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Jacqueline Pitts
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