Bipartisan Bill Would Boost Kentucky's Gas Tax By 10 Cents

Feb 27, 2018

Drivers in Kentucky could pay an extra 10 cents per gallon at the pump while owners of hybrid and electric cars might hand over fees up to $150 per year as part of a bipartisan proposal designed to jump-start the state's stagnant road fund.


Kentucky has a backlog of more than $1 billion in road-paving projects and roughly 1,000 bridges that need to be repaired or replaced. And in two years, $700 million in federal money for local public transportation systems will be at risk unless the state can find an extra $100 million to meet funding requirements.

To pay for those things, House bill 609 from Republican Rep. Sal Santoro and Democratic Rep. John Sims would raise the gas tax by 10 cents per gallon. That would generate an extra $300 million per year for roads. About half of that money would go to the road fund, which is controlled by the state legislature. The rest will be given to county and city governments based on a formula.

"Our roads show what needs to be done," Santoro said. "The only way we can fix it is to do something to have more funding."

Most states rely on gas taxes to pay for roads and bridges, and many have struggled to keep up with repairs as demand for gasoline has decreased with the rise of electric cars and more fuel-efficient vehicles. Since 2013, 26 states plus the District of Columbia have raised gas taxes, according to the National Conference of State Legislatures. Last year, seven states did so, including Kentucky neighbors Indiana, West Virginia and Tennessee.

Some states have also started imposing fees on hybrid and electric car owners because they buy less gas, and therefore are contributing less to the tax base. Kentucky's proposal would impose a $50 annual fee for people who own hybrid cars, a $100 annual fee for people who own plug-in hybrid cars and a $150 annual fee for people who own fully electric cars.

"They are using the highway for free," Sims said.

Other fees would go up, too. The cost of registering a vehicle with the county clerk would jump to $22 from $11.50, a fee that has not been changed since 1968.

It would be the first time the legislature has adjusted the gas tax since 2015. Back then, the tax was falling quickly because it was tied to the wholesale price of fuel. As prices plummeted, so did the state's gas tax. State lawmakers intervened by passing a law declaring the portion of the gas tax tied to fuel prices could never fall below 26 cents per gallon.

That was a tough vote for lawmakers at the time. A vote this year could be tougher. The legislature must pass a two-year spending plan that includes recommended 6 percent cuts to most state agencies. And they are trying to pass changes to the state's struggling public pension systems, proposals that have angered public school teachers and other state workers in an election year.

"I just don't know if the people of Kentucky want another $300 million taken out of their pockets in terms of the gas tax," said Republican Sen. Damon Thayer, the Senate majority floor leader who voted against the 2015 gas tax law.

The bill was filed Tuesday, the deadline for new proposals in the state legislature. It is the result of a special bipartisan committee appointed last summer by former House Speaker Jeff Hoover.

"A lot of our members said, 'We just don't want to be in a committee, see a report and put it on a shelf,'" Santoro said. "We didn't do that. We did something."