Road Fund shortage will mean state transportation projects put on hold

During Tuesday’s Interim Joint Committee on Transportation meeting, Transportation Cabinet officials told legislators that for the first time in recent history, the state faces a low Road Fund cash balance, which compromises the ability to start road projects during this budget cycle.

To address this issue, Transportation Secretary Greg Thomas announced the launch of the Cabinet’s “Pause-50” plan, which hopes to restore funding back to normal levels.  Secretary Thomas explained that this will be done by halting, or pausing, any new state-funded projects for the first year of the biennium.  In the second year, he said their goal will be to allocate $50 million on state-funded projects.

Secretary Thomas told legislators that there are several factors that have contributed to the low cash balance, including a drop in the motor fuels tax, but the main issue has been overspending.  He stated that state spending has greatly exceeded revenues since 2014. During budget years 2014-16, Road Fund revenues totaled $4.5 billion compared to $5 billion in expenses.

Many legislators stated concern that if state funded projects are going to be halted then this could potentially mean a loss of jobs in the road construction business.  Secretary Thomas told legislators that when deciding how to move forward all options were on the table and it was determined that this was the best approach.

Cabinet officials stressed that investing in infrastructure is a top priority of the administration and no federally funded projects would be halted.  In addition to federal projects, Secretary Thomas said that the cabinet will continue with ongoing commitments to mega projects such as I-69 improvements, the expansion of the Mountain Parkway, and the Louisville Bridges project and have allotted $125 million for resurfacing, which will continue to operate.

Categories: Kentucky Competitiveness, Taxes & Budget

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