Chairman of Senate Transportation Committee optimistic for gas tax stabilization this session

03/11/2015 05:26 PM

FRANKFORT — The chairman of the Senate Transportation Committee is “confident” lawmakers will stabilize the state’s shrinking gas tax revenues before the General Assembly adjourns sine die March 24.

Sen. Ernie Harris concluded his committee’s legislative work on Wednesday without taking up the tax, but he said a proposal to prevent a $250.4 million shortfall in the current Road Fund budget is in the works.

That’s how much the Kentucky Transportation Cabinet expects to lose in gas tax receipts in the current biennial road plan once the average wholesale price of gasoline, on which the gas tax is based, hits its statutory floor of $1.79 per gallon. The gas tax is expected to decline 5.1 cents in April after dropping 4.3 cents in January, largely because of plummeting gas prices.

Harris, whose Senate Bill 29 would set the wholesale gasoline floor at its rate Jan. 1 of $2.35 cents per gallon, said senators are “narrowing down” possible plans as the veto recess begins Thursday. The Senate has some House bills ready to use as a vehicle for the gas tax proposal, he said.

While SB 29 offers one potential solution, the Senate may consider provisions preventing such steep declines in annual wholesale price adjustments in the future, said Harris, R-Prospect. Current law caps wholesale price increases at 10 percent per year but provides no floor for such reductions.

“We are going to deal with the issue,” he told reporters after the Senate Transportation Committee met Wednesday. “… I’ve said from day one that this may be resolved in the last day of session, which is either going to be today or it may be on veto-override days, and it’s too early to tell.”

At this point, talks on the gas tax fix have been informal and confined to the Senate.

House Speaker Greg Stumbo said the House of Representatives already voted on a proposal to raise the gas tax floor in last year’s session.

“I don’t know that if there’s going to be any negotiations on the gas tax,” Stumbo, D-Prestonsburg, told reporters. “I haven’t heard anything official from the Senate. We’re waiting for the Senate to do something on the gas tax.”

The House’s vote on the gas tax last year turned into a campaign issue, and political concerns have prevented some from supporting the provision that could be portrayed as a tax increase.

Harris argued that local governments stand to lose 31 percent of their funding for routine road maintenance on top of a 9 percent reduction at the beginning of the year. The loss “would be devastating to our cities and counties,” he said.

“For some of our members that is a very important issue,” Harris said of political worries tied to the gas tax. “For other members it’s not, but my goal is to get 23 votes (the constitutional majority required for revenue bills) to do something related to the gas tax.

“And we’ll let the members of the Democratic and Republican caucuses vote their conscience, and let’s hope we can get it passed.”


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