The Kentucky legislature approved a measure this week that would reset a minimum for the state’s gas tax at 26 cents per gallon, which will preserve approximately $126 million in the state’s road fund over this biennium, Kentucky Gov. Steve Beshear said.
“Nearly half of the gas tax is passed on to municipal governments and counties, so the floor will preserve funding for local communities for use in road and bridge maintenance,” Beshear said.
Kentucky’s motor fuels tax is adjusted quarterly. At the rate of the current quarter, 26.2 cents per gallon goes into the Kentucky Road Fund. Under the legislation passed this week, it will drop to 26 cents beginning April 1 and remaining at that level through fiscal year 2016, according to Chuck Wolfe, the executive director of the Kentucky Transportation Cabinet’s Office of Public Affairs.
The result for the Kentucky Transportation Cabinet will be a budget shortfall of $32.2 million in the current fiscal year and $132.9 million in fiscal year 2016 for a total shortfall of $165.1 million for the current budget cycle, Wolfe said.
“Without legislative intervention, however, the tax would have dropped to 21.1 cents per gallon on April 1, resulting in shortfalls of $56.4 million this fiscal year and at least $194.2 million in fiscal year 2016 – the latter being a ‘best case’ figure that assumed 10 percent growth for the year, the maximum allowed by law,” Wolfe said in an email.
