UPDATE: Gas tax increase for major road improvements may be on horizon

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UPDATE: THURSDAY, FEB 25TH. LEXINGTON, KY. (ABC 36) – Republican Representative Sal Santoro of Florence filed House Bill 561 Tuesday.

The bill would add 10 cents per gallon to the state’s gas tax to generate money that would help failing roadways-highways and bridges.

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The filing comes as transportation secretary Jim Gray tells lawmakers the cabinet has lost more than 1 billion dollars in revenues due to rapid decline in gas prices since 2015.

“Our revenues fell that year by 150 and over the last six years anywhere from 150 million to 180 million dollars per year” said Gray.

He says Kentucky is falling behind compared to neighboring states which have raised their gas taxes in recent years.

“We’re actually getting behind and we’re getting behind further” added Gray.

President and CEO of the Kentucky Chamber of Commerce Ashli Watts says the chamber is 100 percent backing this bill.

“We have been strong supporters of increasing the gas tax which is something that almost all of our surrounding states have done and almost 40 states in the last couple of years have done, it’s really time we properly invest in our infrastructure in Kentucky.”

She says the bill would also raise some fees on hybrid type vehicles.

“Overall we are very supportive of the bill as it is right now and we look forward to working on it through the legislative process.”

We asked you what you thought about paying an extra 10 cents…many of you said no.

Rob Walters from Irvine wrote: “No they don’t use it for what it is intended for we pay enough taxes.”

Some said maybe…Kathleen Miller wrote: “Depends on whether they’re mindfully spending the gas tax we already pay and bad timing, as gas prices are really going up right now, even without an increase.”

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LEXINGTON, Ky. (WTVQ) – On Tuesday, the final day to file bills during the 2021 session, legislation was filed to improve Kentucky’s infrastructure by increasing funding.

The measure comes as state Transportation Secretary Jim Gray told lawmakers something needs to be done.

House Bill 561, sponsored by Rep. Sal Santoro, would generate money for the state to spend on failing roads and bridges by adding 10 cents per gallon to the state’s gas tax, as well as make changes in other areas such as creation of a multimodal fund.

“We applaud Chairman Santoro for his efforts in championing infrastructure investment for a fourth consecutive session. We strongly urge the General Assembly to pass House Bill 561 to continue our economic recovery and promote safety and better connectivity throughout our Commonwealth,” the Kentucky Chamber of Commerce said in a statement. “Our neighboring states have acted in recent years, and it is imperative to increase our commitment to transportation in 2021 to ensure Kentucky stays competitive.”

Kentucky has been struggling with Road Fund revenues for many years. Transportation Secretary Gray told legislators Wednesday in order for the state to make necessary improvements to safety and make new investments, “we must think about what we want the future to look like and make the appropriate investments.”

Motor fuels tax revenues have been flat since around 2015 when the price of gas dropped by almost $2 a gallon and revenues fell by $150 million that year alone. In the years since, Gray said, Kentucky has seen an annual decline in Road Fund revenues of $150-$180 million meaning since 2014, the Kentucky Transportation Cabinet has lost more than $1 billion because of this rapid decline.

These declines come as highway construction costs have gone up by more than 30 percent in just the last seven years, according to Gray.

For these reasons, Gray said Kentucky will have a very difficult time making improvements to any areas of transportation from roads and bridges to safety without additional investment.

With the funding remaining flat and the state struggles with revenue, he noted Kentucky also lost an additional $60 million because of the pandemic.

The top concern of cabinet, the secretary said, is most of our neighboring states including Illinois, Indiana, Ohio, Virginia, and Tennessee, have raised their motor fuels tax in recent years to prioritize transportation and for some states, gas tax revenue is not the only means of funding transportation as Tennessee also uses part of their state sales tax to fund.

Kentucky is being left behind and puts the state at a competitive disadvantage.

Wrapping up his comments, Gray said without road improvements, “we have made in areas like Bowling Green and with the Mountain Parkway, Kentucky simply wouldn’t have been able to stimulate the kind of investments the state has seen and emphasized the Commonwealth must make changes to be able to improve economic development and safety for the future.”

“We always say we will always do the best we can with what we have and we will always work to live up to that mission. But please remember, as we said when we started out, thinking ahead what are the next five, 10, 15, 20, or 30 years going to be like if we continue to be in a situation where our revenues are flat and costs are increasing?” Gray asked.