Government > Policy Development >Transportation/Infrastructure
Aging highway, bridge, aviation, water, stormwater and wastewater infrastructure in Northern Kentucky will require substantial investment, if the region is to sustain its current rate of economic growth. Not only is funding needed for the maintenance of aging existing infrastructure, but new attention is needed and alternative funding mechanisms will be required to improve public health, water quality, safety and mobility for better service to the urban areas of the Commonwealth.

State Funding Distribution System
As the demographics of Kentucky have changed, the urban and suburban areas of Kentucky have become the economic engines that drive our economy. The continued economic health and vitality of our urban areas is being stifled by congestion. For Kentucky to remain economically healthy, investment in congestion relief in our main urban roadway corridors is a must. While we are mindful of needs across our Commonwealth, strategic investment in our urban roadway system is an investment that benefits all of Kentucky.

Kentucky’s current distribution of regional road funding is driven by formulas. The allocation of county and rural road construction dollars is made using a “Formula of Fifths” that was originally enacted in 1948 and distributes four of the fifths on a basis of rural land area, rural population and rural road mileage with the final fifth being equally distributed among all 120 counties. Only 7.7% of road funds are returned to cities. With this current method of distributing funds, Kentucky’s growing metropolitan areas cannot keep pace with the demands on their infrastructure, which is vital to growing jobs in the Commonwealth. Kentucky’s funding formula should be based on a system that considers the number of vehicles that use its roads and vehicle miles traveled on its roadways instead of placing such a heavy emphasis on rural land area and rural road miles.

Chamber Position:
The Chamber urges the General Assembly to invest in transportation at a level that assures Kentucky remains economically competitive, and to review the current funding and make appropriate changes to allow for this investment and assure continued growth. We pledge to investigate possible solutions and work cooperatively with local and state officials and our congressional delegation regarding this issue.

Seek Funding Solutions for Local/State “Match” for Mega-Projects.
The Northern Kentucky Chamber fully supports a comprehensive regional multi-mode transportation approach in Kentucky’s major urban areas, including supporting the Ohio River Bridges projects in Northern Kentucky (I-71/75), Louisville (I-65, KY 841) and Western Kentucky (I-69), as well as the U.S. 27 to I-75 Connector in Jessamine County and Newtown Pike in Lexington.

In Northern Kentucky in the past decade, cost estimates to expand and re-construct the 6.5 mile Brent Spence Bridge corridor have skyrocketed from $700 million to $3.0 billion. These increases are based upon a larger than anticipated deteriorated corridor, the cost of construction commodities (e.g. concrete, steel, asphalt, etc...) rising at rate ranging from 12% - 20% per year, and extensive utilities relocation and property acquisitions.

Although the general public may believe that these “megaprojects” will be built solely with Federal funds, the fact remains that the construction of these multi-billion dollar projects are built by utilizing a cost-sharing formula. In the 1960’s, 1970’s and 1980’s, the federal government generally bore 90% of the total cost, while state/local government paid for the remaining 10%. In recent years, a more typical cost-sharing formula is 80% federal and 20% state/local government.

To illustrate this concept, current estimates are that the total cost for the Brent Spence Corridor Project will be $3 billion. Of that total, Ohio’s share may be approximately 46 percent or $1.38 billion, and Kentucky’s share may be 54 percent or $1.62 billion. Even if federal-state funding share remains at an 80%/20%, the local/state “match” for Kentucky, at current estimates, will exceed $320 million, at a time when both federal and state highway funding dollars are diminishing, due to fewer vehicle miles being driven.

Chamber Position:
The Chamber seeks assistance from the 2009 Kentucky General Assembly to develop viable statewide funding solutions, in order for the 20% state/local match to be met, allowing these projects to proceed on schedule. Importantly, the issue is much broader than just Northern Kentucky, as megaprojects in need of a state/local match are likely to proliferate beyond our urban bridge projects to include water, sewer and dam projects throughout the Commonwealth. The Chamber urges the General Assembly to take steps now to insure that these matching funds are available when construction begins,likely in 2015.

Public Transit: A Wise Investment
Many employees in Northern Kentucky rely heavily on public transportation to attend work. TANK has experienced a double digit increase in ridership. Although TANK has increased fares and streamlined operations, it has reported a budget shortfall. Northern Kentucky employers have an interest in assuring the continued operation of TANK, recognizing that public transit typically involves public investment. Furthermore, a healthy public transit system is an economic development factor. TANK’s funding depends in part on a payroll tax of .6% of the first $25,000 income in Kenton County and on income-capped payroll taxes in Campbell County. The state has mandated these caps. The Chamber generally prefers and will continue to support caps on payroll taxes as a means of curbing tax increases.

However, appropriate funding of TANK is a priority issue for Northern Kentucky. The Chamber also views a region’s decisions about providing some modest amount of additional funding for its public transit system as an issue of local control. By restoring local discretion, the Fiscal Courts can address caps at a later date based on TANK’s needs and other factors, with accountability to the taxpayers. If an increased cap is proposed by a Fiscal Court at a later date, additional funds should be dedicated exclusively to public transit. In addition, the Chamber will expect the Fiscal Courts to re-institute prior caps and reduce taxes if additional funding becomes unnecessary.

Chamber Position:
The Chamber supports legislation favoring local control which would give the Fiscal Courts, not the state, the authority to decrease or increase the amount of capped income for transit funding. The increased cap, if any, should continue to be limited by statute, but with local flexibility to raise the cap by a reasonable rate not to exceed a pre-determined index (e.g. the C.P.I.).