Kentucky’s road funding model is “broken” and raising the gas tax is not the only solution, legislative leaders say

One of the most noticeable forms of government work affecting Kentuckians on a daily basis is the state of our roads and bridges. And with the state’s transportation funding model continuing to come up short, legislative leaders are discussing ways to modernize the method used to raise money to maintain and build infrastructure in Kentucky.

In interviews with The Bottom Line, Senate President Robert Stivers and Acting House Speaker David Osborne both agreed it is time to do something to address the flaws in the system used to generate funding for roads and bridges.

Road Fund dollars in Kentucky are collected through the state’s gas tax and other factors. And while there have been many discussions around raising the gas tax in order to fill the holes in transportation funding, the legislative leaders say that alone will not solve the issue.

“The issue is we don’t have enough money. That’s an easily identifiable problem. We don’t have enough money to repair the bridges and roads that we have. We don’t have enough money to make investments in expanding infrastructure that’s good for Kentucky,” Osborne said.

As cars become more fuel efficient and more electric vehicles are seen on the road, Stivers and Osborne stated the amount of money generated through the gas tax and an increase in that tax will not solve the long-term problem of a broken funding model.

“You have to understand the realities. We can’t build roads when you’re starting to go hybrid cars and electric cars that aren’t paying the equivalent tax based on the usage of the road you’re traveling on, Stivers said. “So, we’ve got to rethink our whole system because as people see less and less need is going to be there for the use of a carbon-based fuel system.”

“It is continuing to be a problem, but we’re not doing anything to reduce the wear and tear on our roads. We’re not doing anything to reduce the need for infrastructure. We’ve got over 100 bridges that are shut down in this state. This is a big problem. So, we’ve got to figure out a way to fund our system long-term because we are relying on a declining resource,” Osborne said.

Watch the interview segment with Senate President Stivers here (story continues below):

As for what can be done to fix the system and collect the money needed for the state’s infrastructure, a bill was presented during the 2018 session and passed over in the final days seeking to modernize the formula for this funding by including a small increase in the gas tax and an increase in certain fees.

Osborne told The Bottom Line there are many options available to raise in-state revenue for transportation but added policymakers need to also be focused on taking advantage of the large amount of out of state traffic that comes through Kentucky.

“The real quandary for Kentucky is that a lot of states have gone to a miles-driven formula. That’s problematic in Kentucky. Because one of the few competitive advantages that we have is our infrastructure. Our location in this country. Half the world travels through Kentucky at least twice a year,” Osborne said. “We’ve got to figure out a way to capture that advantage, to utilize that advantage, without penalizing Kentucky residents. And that’s the quandary.”

Hear Acting House Speaker Osborne’s full comments in the video segment below:

Categories: Government Modernization, Kentucky Competitiveness, Taxes & Budget

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