Politics & Government

Kentucky plans to delay start of new road projects

FRANKFORT Transportation Secretary Greg Thomas said Tuesday the state will slow or delay the starts of new road projects to shore up the ailing Road Fund.

Thomas told the Interim Joint Committee on Transportation that the transportation cabinet has a “Pause-50” plan to restore funding to normal operating levels.

“For the first time in recent history, the cabinet faces a low Road Fund cash balance, which compromises our ability to authorize new state road projects over the next biennium,” said Thomas. “The “Pause-50” approach is designed to slow or delay the starts of new projects so that we can pay current expenditures, recoup lost revenue and rebuild our funding base.”

The transportation cabinet strives to have a balance of at least $100 million at any given time. The last time the cash balance neared zero was in 2004 when it hit $30 million.

The balance, as of Tuesday, was about $352.8 million.

Thomas said the cabinet will implement the “Pause-50” plan by halting the starts of new state-funded projects in all phases, which includes design, right of way/utilities, and construction for the first year of the new two-year budget that starts July 1, and in the second year, aim for a goal of $50 million to allocate on state-funded project starts.

Thomas said the dollar amount could be higher or lower depending on actual expenditures of current projects and the flow of state revenue funding.

In March, Thomas told legislators several factors have contributed to the low cash balance — mainly, overspending with limited funds.

State spending has greatly exceeded revenues since 2014, he said.

Road Fund revenues totaled $4.5 billion over this current two-year budget. Over the same period, expenses totaled $5.035 billion, exceeding revenues by $498 million.

He said that means that the start of new state-funded projects must be delayed in order to meet payment of current expenditures as well as restoring the $100 million cash balance threshold.

Another contributing factor, Thomas said, is the decline of 6.5 cents per gallon in the motor fuels tax in 2015. As a result, Road Fund revenues over this year are anticipated to be $152 million less than FY 2014 revenues.

Despite concerns, the cabinet will proceed and continue work on other projects not financed by state construction funds, he said.

They include ongoing commitments to mega projects including I-69 improvements, the Mountain Parkway expansion project, U.S. 68/KY 80 roadway improvements and the Louisville bridges project.

The Cabinet will proceed on new federally funded projects including the widening of I-75 in Rockcastle County, new I-65 interchange in Bullitt County, and upgrading the William H. Natcher Parkway to interstate standards in order to establish the “I-165” Spur Route between Bowling Green and Owensboro, said Thomas.

He added the resurfacing program will continue to operate.

Jack Brammer: (502) 227-1198, @BGPolitics