Senate endorses $3.7 billion road plan; fuel tax freeze awaits consideration

| 3/13/2009

The Kentucky Senate unanimously approved a $3.7 billion road construction plan. An effort to shore up more money for the state by freezing the fuel tax has yet to advance for a vote before the full chamber.

The six-year road building budget now heads back to the House for approval of changes. Intended to jump-start stalled projects, the road and bridge plan would be funded in part through a mixture of state and federal funds.

Those funds include about $420 million in federal stimulus money and about the same amount in state-issued bonds, The Associated Press reported.

The road funding bill – HB330 – had about $18.5 million in projects added to it in the Senate.

In an effort to secure more money for the state, a bill that still is in committee in the Senate would freeze the state’s fuel tax.

House lawmakers voted 82-17 in favor of the bill earlier this month that would prevent the state’s tax on gasoline and diesel from falling by 4 cents per gallon starting April 1. The tax is scheduled to dip from its current rate of 22.5 cents per gallon for gasoline and 19.5 cents per gallon for diesel because a portion of the tax is pegged to the wholesale price of fuel, which has plunged in the past nine months.

Supporters say freezing the tax rate is vital to funding many projects listed in the state’s road construction plan. They say that failure to act would cost the state nearly $130 million a year in revenue.

Opponents say that stepping in to block the automatic drop in the fuel tax is breaking a commitment to voters.

Local governments are backing the bill because nearly half of the tax revenue is routed to cities and counties for local road needs.

The tax bill – HB374 – is in the Senate Rules Committee.

To view other legislative activities of interest for Kentucky in 2009, click here.

– By Keith Goble, state legislative editor

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