Falling fuel prices taking toll on Kentucky's road fund
FRANKFORT, Ky. (WDRB) -- Lower gas prices have been good for consumers' wallets, but it could cause an important part of the state budget to run on fumes.
Kentucky's gas tax is tied to the wholesale price of fuel. As the price has gone down, so has the tax, and it's costing the state millions.
The gas tax provides cash for the state road fund, which is used to build and repair roads and bridges. The tax has already dropped nearly 5 cents a gallon.
The Transportation Cabinet estimates the road fund has already lost more than $50-million this fiscal year, and could lose nearly $200-million next year.
“It's a tough time, no doubt,” said Kentucky Transportation Secretary Mike Hancock.
Lawmakers got the grim news during a Transportation Committee hearing on a bill designed to stop the bleeding. It would set the gas tax at a floor of just over 27 cents a gallon.
“We really have to create this floor, so that we don't further erode our ability to have a decent transportation system in Kentucky,” said Dave Adkisson, president and CEO of the Kentucky Chamber of Commerce.
City and county leaders packed the hearing room to support the bill, since nearly half the road fund dollars go to local governments.
“That would be a definite impact on our repair of roads, our maintenance, and also safety issues that we would have with our roads,” Shelby Co. Magistrate Hubert Pollett told WDRB News.
There was one voice of opposition.
“We should very cognitive of the fact that the majority of that tax comes from the citizens of this state, not from visitors,” said Charles Zoeller, who identified himself as a concerned citizen.
Politics killed a similar bill last year, some lawmakers not wanting to support what was labeled a tax increase during an election year.
“We knew the gas tax was going to drop some, but I think we were all caught by surprise how much it did drop,” said committee chairman Sen. Ernie Harris (R-Prospect.)
Harris sponsored a bill last year that failed to get traction.
“We should have gone on, in my opinion, and done what we had on the table then, and we wouldn't be here today,” said Sen. Gerald Neal (D-Louisville.)
Supporters hope now lawmakers can put politics aside.
“They should come together and get some kind of resolution to this problem,” said Pollett.
The committee did not take a vote. Backers say they still need to fuel more support so idea doesn't again run out of gas.