House panel passes bill creating funding mechanism for transportation mega projects

A proposal to create local transportation infrastructure authorities to issue bonds and levy tolls for the state’s largest transportation projects moved forward Thursday, though some raised concerns that the legislation was being moved too late in the session.

With just nine working days left in this year’s legislative session, the House Appropriations and Revenue Committee signed off on House Bill 102, which has generated support in the House, the Senate and from Gov. Steve Beshear’s administration.

“The need for these mega projects is not going to go away,” Transportation Cabinet Secretary Joe Prather told the committee Wednesday night. “It’s going to continue to absorb resources if we don’t come to some final solution.”

The legislation would allow for the creation of local transportation infrastructure authorities at the request of local governments to oversee the funding and construction of transportation projects costing at least $500 million.

In western Kentucky, the most prominent project that could be handled by an authority would by the construction of Interstate 69 including a new bridge over the Ohio River at Henderson.

The project closest to benefiting from the authority concept would be the Ohio River bridges project in Louisville that is expected to cost Kentucky at least $2.9 billion and occupies a higher spot in the state’s road plan.

Once created, the seven-member local authority made up of appointees selected by the governor and the local government would craft a plan to build the project, issue bonds to pay for construction and to levy tolls to help repay the bonds and for maintenance.

Bill sponsor Rep. Don Pasley, a Winchester Democrat, explained that the bonds would not be able to be repaid solely by toll revenues. The projects would still require investment of state and federal road dollars, but at a much lower level.The local authority’s plan  would have to be approved by a new statewide transportation infrastructure authority consisting of cabinet officials, representatives of city and county associations and six citizen members appointed by the governor.

The only multi-projects that could be handled by local authorities would be those between Kentucky and Indiana, which excludes the replacement of the Brent Spence Bridge in northern Kentucky where the authority concept has less support.

“We decided that could be an issue for another day and not unreasonably hinder what we’re trying to do,” Prather said.
The proposal comes as the state faces a road fund with a deficit of at least $100 million this fiscal year and a federal highway trust fund that  was recently in danger of becoming insolvent.

Rep. Fred Nesler, a Mayfield Democrat, asked about the impact of the authorities on other, smaller transportation projects, and was told that leaving the funding of these largest projects to the authorities would free up road dollars for other projects to move ahead.

“If we don’t get some way to get these mega projects off our books, … we are not going to have the ability to fund the other projects the way we want to,” State Highway Engineer Mike Hancock told Nesler.

Rep. Jim Wayne, a Louisville Democrat, said while there were many positives to the proposal, he felt it was being pushed too late in the session and legislators had not had enough time to consider the issue.

Although Pasley pre-filed House Bill 102 before the session started, the changes that shift the main responsibility for the project to local authorities were made in an amendment to the bill offered during the committee hearing.

“I am concerned that we’re bringing this bill this late in the session,” Wayne said.

Jody Wassmer, president of the Greater Owensboro Chamber of Commerce, attended the committee meeting, and said after the panel voted 26 to 1 to approve it that he was optimistic about it’s chance, even this late in the session.

“For I-69 to become reality in Kentucky, it’s going to take all the options and all the tools that are possible,” Wassmer said. “This is the Chamber’s number one policy priority this session, so it is good to see it pass committee.”

For more on House Bill 102, read Thursday’s Messenger-Inquirer.

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