Kentucky’s Transportation Network Shows How Old Bridges, Maintenance Backlogs & Lack of New Federal Funding Hurt U.S. Communities
Part One of a Two-Part Series
Kentucky is a logistics hub, southeastern connector and destination commonwealth for people and commerce. Its business community, industry leaders and elected officials have spurred a regional policy dialogue about transportation in light of growing investment needs and aging infrastructure.
“Kentucky is within a day’s drive of two-thirds of the population so when you look at our state from a geographical standpoint, we’re in the center [which includes a network of airports, public transit and roads] of a lot of what is going on. If you’re going from Michigan to Florida, north or south, you’re going to be traveling through Kentucky,” says Kate Shanks, Vice President of Policy Development at the Kentucky Chamber of Commerce. “We have five interstates, we employ about 250,000 people in the manufacturing sector, and we are the third-largest automotive producing state. We are a primary metal state, we have UPS Worldport in Louisville, and we have the new Amazon expansion in northern Kentucky. We have about $500 billion worth of goods moving in and out and through Kentucky annually. The foundation of our economy is our infrastructure.”
Indeed, America is at a crossroads. A snapshot of Kentucky reveals around $2.5 billion is needed to address the outdated Brent Spence Bridge, which moves traffic on Interstates 71 and 75 between Kentucky and Ohio; a $1 billion backlog in maintenance and paving; about $500 million additionally needed yearly to build significant projects; a push to restore 1,000 bridges over the next six years; a possible loss of $120 million in available toll credits partially used for transit as a match for federal money; and the American Society of Civil Engineers (ASCE) Kentucky Section released its 2019 Report Card for Kentucky’s Infrastructure and gave the state a C-, with its roads receiving a grade of D+.
The work that Shanks and other regional transportation proponents, such as M. Chad LaRue, Executive Director of the Kentucky Association of Highway Contractors, Inc. (KAHC), do is critical to the debate over how to fund and rebuild America’s infrastructure.
LaRue, who is also a licensed professional engineer, says he recently met with a state senator who wanted to learn more about a proposed bill that would help raise transportation revenue.
“The senator said, ‘You’re telling me that the Kentucky Transportation Cabinet gets $1.5 billion a year and they are having a crisis? I don’t believe it.’ And so my answer was, ‘I respectfully disagree,’ ” explains LaRue. “I explained that the Kentucky Transportation Cabinet [under the direction of Gov. Matt Bevin] has done what they call the SHIFT model [Strategic Highway Investment Formula for Tomorrow] and they went through and did a quantitative analysis of all the needs in the state. Those needs were based on priorities first evaluated by the cabinet, with additional input from their 12 district offices, and then they went to their local metropolitan planning organizations and area development districts and received input on what the priorities are for those regions and so all of that was given quantitative scores and that’s what built our highway plan. … And what that plan shows right now is that to deliver the needs over the next 10 years, they need almost $500 million a year in new money.”
Through SHIFT, Kentucky is taking into account multiple factors in budgeting for its two-year and six-year (out year) road plans, adds Shanks. The program focuses on goals and measures that encompass improving safety, asset management, addressing congestion and needed expansions. It considers cost-benefit analyses and insight such as whether a project will be a catalyst for new economic development in an area, or if funding is for an existing structure that needs repairs.
Historically, the state has received about $700 million annually from the Federal Highway Administration (FHWA). The entire federal budget request for fiscal year 2019 was $46 billion and, if one considers the cost of projects today, it is not particularly massive. It reflects funding for the safety improvement, surface transportation block grant, congestion management technologies, highway performance and highway freight programs, and comes during a policy and regulatory climate focused on project streamlining and performance targets.
“At both the state and federal levels of government, the heart of the infrastructure debate centers on an aged interstate system and interconnected regional systems that require more revenue to respond to safety, capacity, multimodal and ease-of-mobility needs as well as integrating better technology and performance measures,” says Ed Mortimer, Executive Director of the Americans for Transportation Mobility (ATM) Coalition. “In the United States, the gas tax is how the country raises dedicated transportation infrastructure funds.”
But — despite better fuel efficiency, inflation and a Highway Trust Fund headed toward empty in 2021 without sizable new investment through fresh legislation — the federal gas-tax rate that creates revenue for the nation’s transportation system sits stagnant. It has not been adjusted since 1993, and this is the longest period of it not being raised since Congress created the tax in 1932, according to the Institute on Taxation and Economic Policy (ITEP).
Kentucky’s gas tax dates to 1920. It is tied to the wholesale cost of fuel, which has resulted in a revenue loss of hundreds of millions of dollars annually since 2015 due to a drop in prices.
Now it is at the core of recent debates on how to meet the state’s infrastructure investment needs. Kentucky’s roads, bridges, public transit and the CVG, Blue Grass and Louisville International airports are all part of a transportation matrix that relies on the construction and labor sectors and connectedness, while serving the public good and helping keep local economies functioning and healthy.
During the Kentucky General Assembly’s recent short session, Rep. Sal Santoro (R-Florence) filed House Bill 517 to generate money for the state to spend on failing roads and bridges by adding 10 cents per gallon to the state’s gas tax and other fuels, and expanding fees on electric vehicles and car registration renewals, but it did not advance to conference committees.
LaRue explains that “in Kentucky from 2011 to 2015 [before the gas tax dropped and revenue was lost], the Kentucky Transportation Cabinet averaged letting $1 billion in construction projects a year. In 2016, the transportation cabinet let $735 million. In 2017, they let $640 million, and in 2018, they let $812 million. It averages out to about $729 million dollars. That’s a 27 percent revenue loss from the previous five years over the current three years, so in any business that obviously is going to have a major impact.”
This kind of decline in investment, when compounded in community after community in the United States, is creating demands for newer policies to help grow sustainable infrastructure revenue.
The McKinsey Global Institute previously reported that many leading nations cut back infrastructure spending because of the global financial crisis and have since raised their infrastructure investment but “the United States is yet to match the level of investment that prevailed before the financial crisis.”
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