Road Fund Bulletin Highlights Need for Further Pension Reform – The Bluegrass Institute for Public Policy Solutions


Kentucky Auditor Mike Harmon released a data bulletin this week focusing on Commonwealth Road Fund spending and revenue sources.

The Bluegrass Institute actively opposed any increase in the state’s gasoline tax until an audit could be performed for the Kentucky Transportation Cabinet (KYTC) that would include a report on tax revenues intended for to be used for the road fund, but which would instead be diverted to other areas of government spending and an investigation into the practice of one-stop-shop contracts of the firm which often results in project costs exceeding internal estimates of their own engineers .

While not an audit, the bulletin compiles publicly available data on the use of road funds and illustrates frequent warnings from BIPPS about how rising pension costs are crowding out others. areas of public spending needed such as infrastructure. The bulletin notes that the increase in the costs of pensions and other post-employment benefits (OPEB) exceeds the growth in road fund income and the rate of inflation (see charts of the auditor’s report below) .

According to Auditor’s Bulletin Harmon: “Although the Commonwealth has significantly increased contributions to its various pension plans in recent years, unforeseen economic developments or budgetary challenges could make this commitment more difficult. In addition, the continued increase in pension obligations could further reduce the availability of Highway Fund dollars to be used for such purposes as construction and maintenance of roads and bridges. “

Clearly, pensions and other currently expensive government benefits are not sustainable and more work needs to be done to bring us toward pension plan solvency.

Leave A Reply

Your email address will not be published.