Kentucky Transportation Secretary provides update on Infrastructure Investment and Jobs Act

As Congress returns to Washington this week, state lawmakers heard from Kentucky Transportation Cabinet Secretary Jim Gray in Frankfort on the potential impact of the federal Infrastructure Investment and Jobs Act (IIJA), that could see final passage in the U.S. House of Representatives as early as next week.

Speaking on IIJA to the Interim Joint Committee on Transportation Monday, Gray made it clear to legislators that the numbers discussed from the IIJA package are still speculative and, if the package passes at the federal level, the additional funding would not provide a cure for the state’s infrastructure needs.

Gray said Kentucky could receive approximately $700 million towards general highway and bridge projects over the next five years under current IIJA language being considered in Congress.

“This increase, which would equate to an average of about $130 million per year in new monies, is not inconsequential, but neither is it a panacea,” Gray said. “It is not such an enormous amount that it would cover all the pent-up transportation and infrastructure needs across the state.”

Gray said Kentucky would have to put up its fair share of funding in order to draw down the federal funding. The Transportation Secretary also spoke to multiple other funding streams available through grant programs for which Kentucky could compete to address megaprojects such as a Brent Spence companion bridge in Northern Kentucky and the I-69 bridge near Henderson.

“We’ve projected that we will still need to come up with 20 percent in matching funds at the state level to receive the added money for highway projects,” Gray said. “We are seeing grant proposals out of some of our competitive states that have been upping their commitment to 30 and 40 percent, making it that much more difficult for us to compete. That’s the caution. I’m personally anxious about how much we can actually contribute against other states who have greater revenues from their state side.”

Gray reiterated that the new federal funding would not be a quick fix for the state’s transportation needs, speaking specifically on the need to replace funding being lost through the state’s motor fuels tax. 

“We are up just nominally in 2021, from about $741 million in 2020 to about $748 million year-to-date,” Gray said. “We’re still not moving up; other states are passing us by because they have adjusted their models for collecting the motor fuels tax.”

When asked about a motor fuels tax increase package that was proposed in the 2021 regular session and how any new money would impact local governments, Gray said that just under half of any new monies collected would go directly to cities and counties to make improvements.

“It would have a substantial lift, which is why I think so many city and county officials have supported an adjustment in our revenues, because they’re the ones who will have discretion over these funds,” Gray said. “It comes down to a real positive for our cities and counties.”