Ailing Kentucky road fund will need years to return to 2015 levels, officials say
LOUISVILLE, Ky. (WDRB) – Lower gas prices have brought relief to drivers but continued woes to Kentucky’s road fund.
The fund, which relies on motor fuel taxes tied to wholesale prices, is expected to take in $139 million less than the state’s budget for this fiscal year, Russ Romine, Kentucky’s deputy transportation secretary, told lawmakers on Tuesday.
After analyzing last month’s report from a group of independent economists known as the Consensus Forecasting Group, Romine concluded that it won’t be until 2020 at the earliest that the fund will return to 2015 levels. The fund had $1.53 billion during the fiscal year that ended in June.
“The outlook for the road fund is pretty flat,” Romine said at a meeting of the legislature’s interim joint committee on transportation in Louisville.
The shortfalls were anticipated. In June, transportation leaders said the state could have lost as much as $291 million in the coming years if lawmakers had not approved a bill during the 2015 legislative session that essentially keeps the gas tax from fluctuating wildly.
The state anticipates fewer construction projects as a result of declining road fund money, Transportation Secretary Mike Hancock said in an interview after Tuesday’s meeting.
Hancock declined to say which projects could be cut, but he noted that the two-year highway plan approved in 2014 includes 25 to 30 percent more road work than the state can afford. He said bridge replacement and resurfacing existing roads will remain a priority for the state.
“It was obvious from the outset we weren’t going to be able to do all projects,” he said. “We’ve simply been taking the cash at our disposal, stretching it as far as we can, covering as many projects as we can and we’ll continue to do that.”
Hancock also noted that local road construction will be affected under a revenue sharing deal that sets aside about 48 percent of gas tax money for rural and municipal roads. He predicts “a commensurate reduction” in those funds without any action by the legislature.
“I think it’s something that could be a force in the 2016 session,” he said.
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