Transportation budget is an unprecedented investment in Kentucky's infrastructure -- accomplished without raising taxes.
The state’s transportation budget (HB241) is moving separately but in tandem with HB1 - the broader executive branch budget. Both bills passed the House of Representatives yesterday with overwhelming bipartisan majorities.
Presenting in front of the House Appropriations & Revenue Committee, Rep. Sal Santoro - the chair of the transportation appropriations subcommittee - said HB 241 “reignited” Kentucky’s infrastructure budget and represented “the beginning of the end of underfunding transportation.”
Santoro is right.
The transportation budget appropriates $6.61 billion for the next biennium. Here are the top line items highlighted in yesterday’s meeting:
$2.16 billion in federal funds, including a commitment of $200 million to meet any matching fund requirements for additional federal grants.
Road fund appropriations totaling $3.42 billion. (Of note, A&R Committee Chairman Jason Petrie pointed out that the sweep of road fund monies to the general fund has been completely eliminated in this proposal.)
A $180 million general fund transfer to the Transportation Cabinet to increase funding for highway and road repairs.
$50 million each year to provide maintenance and construction grants to Kentucky’s cities and counties.
$22.8 million to provide grants to the state’s 57 local and regional airports.
Bottom line: HB 241 is an unprecedented commitment of resources to Kentucky’s infrastructure — all accomplished without raising the state’s gas tax.
For years, a powerful coalition has made the argument to the General Assembly — and to a lesser extent the general public — that raising taxes on Kentucky’s families and motorists was the only path forward to promote infrastructure development.
HB 241 and last year’s budget completely dismantle their argument. Take, for example, the General Assembly’s action to put an end to the road fund sweep.
The 2018-2020 sweep was $222.6 million for the two-year period. Taxpayers expected those dollars (paid while filling up their tanks, through various licensing fees and the motor vehicle usage tax) to be directed towards paying for highways, roads and bridges. Instead, they were appropriated to various state agencies to prop up non-transportation related spending.
Last year’s budget started the process of rededicating those road fund revenues toward their intended purpose. And, if enacted, HB241 will bring to an end the historical mistake of diverting those funds.
More important, if the legislature continues along this path, those rededicated funds become recurring. Therefore, ending the sweep will effectively increase the state’s investment in infrastructure by an additional $1.1 billion over the next decade.
This is a major accomplishment by the General Assembly. Because they held firm against raising the gas tax, legislators are in a position to tell Kentuckians that the Bluegrass State will see record spending on vital transportation services without taking more from their pockets at the gas pump.
What can we expect now?
Unfortunately, there’s never enough for interest groups whose missions depend on the growth of government.
A recent report from the Tax Foundation and touted by the Kentucky Chamber of Commerce recommended an immediate hike in Kentucky’s gas tax while also putting future gas tax increases on automatic pilot.
Image source: Kentucky Chamber of Commerce
At a Chamber forum last month, Senate President Robert Stivers apparently floated the idea of raising the gas tax as part of comprehensive tax reform.
Rank-and-file legislators understand that their neighbors back home see inflation and higher energy prices as key concerns.
Those members have the facts on their side. Kentucky is poised to see historic investments in our infrastructure. Tout that accomplishment and let leadership know raising the gas tax as part of tax reform is a non-starter given the current environment.