Some Kentucky highway projects will be delayed as Road Fund shrinks
Some road projects will be postponed in coming months as the Kentucky Transportation Cabinet wrestles with an estimated $161 million shortfall in the state’s Road Fund during the fiscal year that ends June 30.
Transportation Secretary Jim Gray told a legislative committee Tuesday that bid openings for new road projects in May and June were canceled; mowing along public rights of way is being reduced; and roughly 100 repaving contracts worth $58 million have been suspended until later this year.
The COVID-19 pandemic and subsequent shutdown are making “a severe impact on the Road Fund,” Gray told the Joint Interim Transportation Committee. Tax collections from gas and vehicle sales and registration shriveled as people drove less and bought fewer cars. As a result, the Road Fund in April received 30 percent less than it did the same month a year earlier, Gray said.
Last month, based on starker numbers from an anticipated economic recession, the state’s Consensus Forecasting Group revised its estimate for what the Road Fund will collect this fiscal year, reducing it from $1.55 billion to $1.39 billion.
Because the shortfall is more than 5 percent, Gov. Andy Beshear is expected to call a special session of the legislature — as required by law — so lawmakers can help him write a spending reduction plan. Beshear has told reporters that he wants the special session to be as short and focused as possible, but under the rules, it’s difficult for lawmakers to spend less than five days writing and passing a bill.
The Transportation Cabinet does not want to halt projects under construction, even if that means postponing the start of new projects, Gray said. Current projects include expanding the Mountain Parkway in Eastern Kentucky and widening Interstate 75 from four to six lanes in Rockcastle County.
“We expect that our major projects already underway will continue. That’s important,” Gray said.
Cabinet officials warned lawmakers that even as employers reopen, Road Fund revenue could continue to fall short. For example, auto factories that were shuttered for weeks could lead to inventory shortages for car dealers, which means less money in vehicle sales tax and registration, officials said.
“I’m sure you would agree the quicker we can reopen and get people back to work, the better off we’ll be,” Rep. Ken Upchurch, R-Monticello, told the cabinet officials.
This story was originally published June 2, 2020 at 4:48 PM.
