State may forgo scheduled decrease in gas tax

Kentucky is considering forgoing a decrease in the state’s gasoline usage tax slated for April to help shore up its sagging road fund, legislative leaders and Gov. Steve Beshear‘s office have said this week. 

According to the Herald-Leader and the Courier-Journal, keeping the tax at its current level is part of discussions about the state’s six-year road plan that are ongoing this week. 

State leaders are working on the road plan after a Franklin Circuit judge ruled last year that the plan passed by the legislature was invalid because it was delivered to Beshear after the legislative session ended. 

Rep. Rick Rand, who chairs the House budget committee, told the C-J’s Tom Loftus Wednesday that House and Senate leaders were leaning toward keeping the gas tax at 22.5 cents per gallon, though the issue hasn’t been decided. 

A portion of the tax is tied to the wholesale price of gas which has declined significantly since last year and under an 1980 state law the tax would drop in April without action by the General Assembly. 

From the Herald-Leader – 

Jack Fish, president of the Louisville-based Kentuckians for Better Transportation, said lowering the tax rate would be “disastrous” for the $1.2 billion Road Fund.

Without “stabilizing the gas tax,” he said, the projected $104.7 million shortfall in the state Road Fund this fiscal year, which ends June 30, could jump an additional $128 million.

According to the Herald-Leader’s Jack Brammer, the tax has been raised five times but never lowered.  

Forgoing the tax decrease would come on the heels of last week’s passage of House Bill 144 which doubles the state’s tobacco taxes and makes alcoholic beverage purchases subject to the state’s 6 percent sales tax. 

 

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