By: Keith Kappes
Columnist
Carter County Times
(Reprinted by request from January 2016)
It was in this space in 2015 that we predicted that Kentuckians, especially those of us who live in rural areas, would discover a downside to cheap gasoline.
The average price for a gallon of regular grade gasoline had remained at or below $2 for that period and somehow didn’t go back up during the traveling holidays.
The bad news is that, despite the General Assembly’s intervention last year, the much lower pump prices means that the state gasoline tax has declined significantly.
One of the major fiscal issues facing Gov. Matt Bevin as he prepares his first budget proposal for the upcoming legislative session is what to do about the shortfall in state road fund revenues.
Motorists obviously love the lower fuel prices but city and county officials already are faced with maintaining streets and roads with substantially lower funding this year.
Moreover, the scarcity could be worse in the new fiscal year starting July 1.
Kentucky’s general fund did well in the last fiscal year but the state road fund experienced a major shortfall because its revenue is tied to the price-per-gallon formula.
We understand that county judge-executives and mayors are concerned because the rural and municipal aid allocations include funds that are discretionary at the local level.
In other words, some of the state money must be used for repaving, bridge repairs and other work on roadways but part of that state aid can be used where a county or city determines it needs it the most.
After the blizzards and floods of 2015, we believe the governor and the General Assembly should protect local governments by temporarily making other funding available for streets and county roads.
Because of consumer protection language in the statute concerning the state gasoline tax, state highway officials say it could take five or six years to get the rate back to the level before cheap gasoline.
That’s simply too long to wait.
NOTE: The critical question in 2026 has to be what will be the fallout from the suspension of the state and federal gasoline taxes. Yes, that could bring some relief to high prices at the pump today but will it result in 2027 becoming The Year of The Pothole?
Contact Keith at keithkappes@gmail.com.
