An important budget detail related to Road Fund resources was shared by Sen. Chris McDaniel, R-Taylor Mill, in yesterday’s budget conference committee meeting.

McDaniel said the legislature intended to limit the diversion from the Road Fund to the General Fund to support the Kentucky State Police’s budget, which receives a lion’s share of the diverted revenues. He emphasized the adjustment would not result in reduced funding for the law enforcement agency.

The committee discussion indicated the decision will result in an additional $50-60 million remaining in the Road Fund to provide for infrastructure investment and maintenance. Assuming this figure applies only to the current one-year budget being negotiated (which we believe is a safe assumption), that means an additional $100 million will be available in future bienniums for roads and bridges.

On Monday’s Kentucky Tonight, Sen. Damon Thayer, R-Georgetown, and Rep. Chad McCoy, R-Bardstown, suggested there won’t be a gas tax increase this session. Both indicated there’s a good chance there will be an increase in fees and licensing, which would go to the Road Fund.

A presentation early in the session from the state budget director informed the General Assembly that higher revenue estimates and the use of CARES Act funds has resulted in $78.9 million in more Road Fund resources in FY ‘21 and $38 million more in FY ‘22.

While we don’t want to miss the mark with a back-of-the-envelope calculation, it’s clear the General Assembly is poised to increase infrastructure funding by tens of millions of dollars without a tax increase.

If you thought this would be welcome news to the Kentucky Chamber-led coalition advocating for more infrastructure spending, you’d be wrong. Yesterday, the chamber’s CEO, Ashli Watts, sent a letter to all 138 members of the General Assembly stating:

“We want to stress (economic recovery) cannot be achieved without action on key issues that still hang in the balance…Pass the revenue increasing measures in HB 561, including the $0.10 gas tax increase…Simply moving and changing some fees around for one-time money is not a viable or bold solution.”

A couple questions for the Chamber:

1. The increased fees on electrics and hybrids would be permanent. Limiting the transfer of Road Fund dollars to the General Fund is likely a permanent readjustment. Why do you characterize that as “one-time money”?

2. Kentucky has one of the highest overall tax burdens in the country. How, exactly, does raising taxes on working families enhance Kentucky’s economic recovery?