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Greater Louisville Inc. The Metro Chamber of Commerce 2019 Chamber of the Year
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Media Center

March 15, 2017 4:24pm

At the Crossroads: A Case for Road Aid Modernization

For the past 69 years, Kentucky has used the “formula of fifths” to determine the appropriation of road funds.  This formula was developed in 1948 when the state’s population was more dispersed.  However, much like the state of technology and modern medicine, our state’s circumstances have greatly evolved over the decades.

What was once a rural state is now a state with growing metro- and micropolitan areas. Since we are still funding roads based on an outdated formula, the areas where the majority of Kentuckians live, work, and drive are receiving the least amount of road funding. Local roads in metropolitan areas account for 39 percent of miles driven in Kentucky, yet only receive 16 percent of the state’s road funds.

The long-standing gap in funding created the poor roads many of us must travel each day.  Almost half of the roads in Louisville are rated in mediocre or poor condition by TRIP, a Washington, D.C. based nonprofit. According to a 2016 Courier-Journal article, maintaining our current substandard road conditions costs Louisville about $15.6 million each year. It is time to reassess how we invest in our roads.

House Bill 292, which was recently heard for discussion only by the House Appropriations and Revenue Committee, would maintain the current road formula for revenue sharing of the fuel tax revenue up to $825 million, which maintains counties’ current funding levels. Amounts exceeding $825 million, would enable urban areas to receive more fair funding to local
governments with higher traffic areas.

For Kentucky to thrive and grow, businesses must have reliable infrastructure.  Infrastructure ensures goods and services can get to where they are going. Kentucky’s borders are within 600 miles of over 65% of the nation’s population and we have some of the finest goods and services to provide to the world.  The current lack of funds for metro roads costs some of the largest employers in our region serious amounts of money. Labor and gas costs increase for businesses when traffic moves slowly, like during lane closures or simply bad conditions.  Online shopping, shopping elsewhere, or not shopping at all becomes more attractive since people’s behaviors are altered to avoid traffic or poor driving conditions.

Well-maintained roads and strong infrastructure are the backbone of a healthy economy, impacting quality of life and competitiveness. Expenses like road maintenance contribute to the need for an occupational tax in many metro areas because when dollars do not come from the state, metro areas must allocate this funding within the local budget.

Taxpayers are now at a real crossroads, so to speak. We need to empower local governments to be better equipped to support their road projects.

As advocates for the Greater Louisville area, we continue to support changing the road aid formula to align with usage.  HB 292 is a positive step forward for our Commonwealth.