FRANKFORT, Ky. (WDRB) – It’s a top priority of the powerful Kentucky Chamber of Commerce, Amazon and UPS. It’s backed by elected officials representing the state’s cities and counties, including Louisville Mayor Greg Fischer.
But a proposal to raise the state’s gas tax appears caught in a political game of chicken with less than a week before the deadline for new revenue-generating bills in the Kentucky House.
Rep. Sal Santoro, a Florence Republican who has sponsored prior fuel tax bills, hasn’t yet introduced a version in this year’s legislative session. He said Monday he is waiting for Democratic Gov. Andy Beshear to make the first move.
“In past administrations, the governor has to take the lead. He needs to be the one out front with it and then we will follow,” Santoro said. “The (House) Speaker (David Osborne) is ready to follow. I’m ready to go. But it’s a matter of when the governor wants to start getting out there. He’s our governor. He’s the leader.”
Beshear’s two- and six-year road spending budgets introduced in late January don’t assume a gas tax increase. The House is crafting its own version of those plans without assuming any additional revenue – for now.
Beshear said earlier this month that talks over transportation funding, such as a possible gas tax increase, have been “harmed significantly” by a separate bill that passed the state Senate last Friday. Senate Bill 4 would strip the governor’s unfettered ability to choose a Transportation Cabinet secretary, giving the nominating power to a newly created board.
A Beshear spokeswoman, Crystal Staley, did not directly respond to a question about the status of any discussions on the gas tax. She reiterated the governor's previous remarks and said the Senate bill is a "clear attempt to remove authority from a new governor."
"The bill will lessen accountability, essentially having a $1 billion operation managed by a committee. Moreover, that committee would be made up of persons who have direct financial interests in how the money is spent. We should not determine the authority of a governor based on who wins the election."
The Kentucky Chamber of Commerce, the Kentucky League of Cities and the Kentucky Association of Counties would be represented on a new Kentucky Transportation Board, which would pick nominees for Transportation Secretary and send those finalists to the governor for his or her decision.
The bill has been assigned to the House Transportation Committee, where a hearing hasn’t been scheduled.
“I’ve said from the beginning: I don’t like Senate Bill 4 at all,” said Santoro, a committee member. “I think the governor, he’s the man who selects his secretaries of his cabinets. He needs to do it.”
“I don’t think that the legislature needs to reach over into the executive branch. It’s just a separation of powers,” he said.
A group called the Kentucky Infrastructure Coalition has been leading the push for a higher gas tax, along with changes to the decades-old formula that allots transportation dollars to cities and counties.
Its members include Amazon, UPS, Greater Louisville Inc. and at least 40 other groups, including the three organizations that would nominate citizens for the Kentucky Transportation Board envisioned in Senate Bill 4.
On Wednesday, coalition representatives took their case to Kentucky lawmakers, citing a litany of road needs that will only worsen without new funding.
“We know increasing the gas tax is hard, but you have a very broad coalition backing you and supporting you,” Ashli Watts, president of coalition member the Kentucky Chamber of Commerce, testified before the House budget review subcommittee on transportation.
She told reporters after the meeting that there’s plenty of time for a compromise that involves “getting the leaders together and trying to figure out a solution that works for all of them.”
Drivers in Kentucky pay 26 cents per gallon when they buy fuel, with all but 1.4 cents going to the state road fund. This gas tax revenue is the largest single source of road fund revenue, making up about half of the $1.6 billion annual account.
But the road fund’s growth has been tepid and driven mostly by taxes levied on new and sold cars rather than the gas tax. Further straining the road fund is a stream of dollars diverted to other state agencies.
All told, that amounts to about $119 million to be spent directly from the road fund in the next fiscal year, according to Kentucky Transportation Cabinet estimates, or about 7.5 percent of the road fund.
Santoro said any gas tax bill would be “very similar” to last year’s legislation, which called for adding 10 cents per gallon to the state taxes on gasoline and other fuels in addition to expanding fees on electric vehicles, passenger car registration renewals and specialty license plates.
It would have generated nearly $500 million a year in additional revenue, according to estimates.
Reach reporter Marcus Green at 502-585-0825, mgreen@wdrb.com, on Twitter or on Facebook. Copyright 2020 WDRB Media. All rights reserved.
