Bevin cuts $112.5 million from Kentucky Transportation Cabinet t - WDRB 41 Louisville News

Bevin cuts $112.5 million from Kentucky Transportation Cabinet to offset road fund shortfall

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LOUISVILLE, Ky. (WDRB) – Gov. Matt Bevin has ordered a $112.5 million reduction in the Kentucky Transportation Cabinet’s budget for this fiscal year to offset an estimated shortfall in road fund revenues.

The bulk of the cuts – nearly $62 million – are budget-balancing measures required by law and affect a revenue-sharing program that doles out money to counties and cities for smaller road projects. An additional $28.8 million will be slashed from the cabinet’s highways budget.

Bevin's administration outlined the changes in an order issued Monday, saying the move is necessary to “prevent a deficit in the finances of the Commonwealth.”

The governor’s action comes less than a month after the Consensus Forecasting Group, a panel of economists, projected that Kentucky would get $112.5 million less in road fund revenue in the fiscal year that ends in June.

In all, Bevin’s order amounts to a 5.6 percent decrease in the cabinet’s budget.

Kentucky has been bracing for a decline in the road fund, which has been hit hard by lower fuel prices in the state and a former gas tax system that was tied to wholesale prices – without a floor to stop falling gas prices from plummeting.

Transportation Cabinet spokesman Ryan Watts said the state hasn't yet determined how it will enact the cuts to the highways budget. For example, he said some projects in the design and utility relocation phases could be slowed.

Mike Hancock, Bevin’s acting Transportation Secretary, said last September that he expected “a commensurate reduction” in money allotted for rural and municipal roads.

City and county officials will have to decide how to address the loss of $62 million from the revenue-sharing program, Watts said.

Besides highway spending, that program is the largest appropriation in the cabinet. Prior to Bevin’s action, the state planned to spend $505.7 million in fiscal 2016 on county roads, rural roads and projects in larger, municipal areas such as Metro Louisville.

Watts wasn’t able to immediately say how much of that money was set aside for Jefferson County.

Denny Nunnelley, executive director and CEO of the Kentucky Association of Counties, declined to comment in detail until he knows more about the cuts. He said the move is “not a total surprise.”

In particular, Nunnelley said, smaller counties rely on the funds.

They’re important,” he said. “Every dollar’s important.”

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