Call to Order and Roll Call
The third meeting of the Budget Review Subcommittee on Transportation of the Interim Joint Committee on Appropriations and Revenue was held on Thursday, September 22, 2011, at 10:00 AM, in Room 131 of the Capitol Annex. Representative Sannie Overly, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Representative Sannie Overly, Co-Chair; Senators Ray Jones and R.J. Palmer; Representatives Hubert Collins, Danny Ford, Jim Gooch, Fred Nesler, John Short, and Jim Stewart.
Guests: Representatives Rocky Adkins and Leslie Combs; Tammy Branham, Executive Director, Office of Budget and Fiscal Management, Transportation Cabinet; Kevin Damron PE, Chief District 12 Engineer, Transportation Cabinet; Russ Romine, Executive Advisor, Office of the Secretary, Transportation Cabinet; and Colonel Mark Needham, BRAC Advisor, Chairman and Executive Director, Kentucky Commission on Military Affairs.
LRC Staff: L. Bart Hardin, Greg Rush, John Snyder, Stewart Willis, Stephanie Craycraft, and Spring Emerson.
Road Fund Update
Tammy Branham, Executive Director, Office of Budget and Fiscal Management, Transportation Cabinet, gave a brief presentation outlining the changes in the Road Fund over the past year.
In response to a question from Representative Collins, Ms. Branham explained that the Motor Fuels Tax amount could change each quarter based on the average wholesale price (AWP). She said it increased to the ceiling in the first quarter of fiscal year 2012, and will be surveyed again in October. In response to a question from Representative Adkins, Ms. Branham clarified that the overall growth in fiscal year 2011 was approximately 11 percent compared to fiscal year 2010 collections. In response to a question from Representative Adkins, Ms. Branham stated the estimated growth percentage would be approximately 10 percent over the current fiscal year which results in an $83.3 million increase in estimated Road Fund Revenue.
In response to a question from Chair Overly regarding the expenditures in the Surplus Expenditure Plan, Ms. Branham replied that the Transportation Cabinet is directed in the Budget Bill to place all additional revenue or lapses into the State Construction Account. In response to a question from Chair Overly regarding the advancement of projects, Ms. Branham responded that she did not have any details regarding the specific projects involved. Mr. Romine added that any additional funds that come in above the estimate would be used by project priority, specifically the SPP projects which have first priority. In response to a request from Chair Overly, Mr. Romine agreed to provide more information to the subcommittee at a later date.
State Bond Funded Road Projects
Kevin Damon PE, Chief District 12 Engineer, Transportation Cabinet, provided a brief overview of state bond funded road projects.
In response to a question from Chair Overly, Mr. Damron said a very refined plan is in place to complete the bond funded projects and it could take approximately two years to do so. Chair Overly stated that some of the projects had pre-construction dollars authorized for design, right-of-ways, and utilities.
Representative Collins congratulated L. Bart Hardin, Deputy Director, Office of Budget Review, on his upcoming retirement from the Legislative Research Commission. Representative Adkins thanked Mr. Hardin for his valuable contribution.
Update on Appalachian Development Highways (APD) Funded Road Projects
Kevin Damron PE, Chief District 12 Engineer, Transportation Cabinet, provided a brief overview of APD Projects.
In response to a question from Chair Overly, Mr. Damron said letting dates are usually set when right-of-ways are authorized.
In response to an inquiry from Chair Overly, Mr. Damron provided a brief explanation of APD funding. Chair Overly stated that it is critical to find the 20 percent in state matching funds so as not to risk losing the federal APD funds. Representative Combs expressed her thanks to all involved in APD funding issues.
In response to a question from Representative Adkins, Mr. Damron said the stretch of highway between US23 to Breaks Interstate Park was approximately 18 miles. He added that with the surfacing through Section 5 at Marrowbone, that would open up an eight- to nine-mile corridor of US460. In response to a question from Representative Adkins, Mr. Damron replied that when Corridors I and R (from Mountain Parkway at Campton to US23) were put into the APD highway system, they were identified as being in the program but not participating. They were presented to the program as necessary corridors to the Appalachian region, but in the mid-1960s, Kentucky did not need Appalachian Regional Commission (ARC) funding to pay for the highways because we already had an alternative funding source for those routes through tolls. He added that the Appalachian Development Highway System is not a cost-to-complete program, but is instead focused on the mileage in the system. The ARC officially considers Corridors I and R to be completed because of the distinction made in the mid-1960s. It would require Congressional action to change that classification.
In response to a question from Chair Overly, Mr. Damron answered there is no federal funding for maintenance.
Update on BRAC Projects
Russ Romine, Executive Advisor, Office of the Secretary, Transportation Cabinet, and Colonel Mark Needham, BRAC Advisor, Chairman and Executive Director, Kentucky Commission on Military Affairs, provided a brief overview of BRAC projects.
In response to a question from Chair Overly, Colonel Needham said the minimum amount the US Department of Defense (DOD) will take a cut on in the next ten years is $350 billion. He said he expects that number to actually be somewhere between $400 billion and $600 billion, and if that happens, the DOD is likely to cut infrastructure, which has been well documented in the news.
In response to a question from Representative Adkins, Mr. Romine said the Cabinet is on target to be at $1 billion in lettings at the end of calendar year 2011, and expects to be at $1 billion in calendar year 2012.
In response to a question from Representative Adkins, Ms. Branham agreed to provide information relating to the amount of bonds that had "rolled off" last fiscal year to the subcommittee at a later date.
Representative Nesler recognized and introduced Civil Engineer Clay Robinson from Paducah, who was in the audience.
Representative Collins commented that after reviewing traffic counts on I-65 between Bowling Green and Elizabethtown, he was surprised with the result. He said that the state of the roadway was not the cause of all the accidents occurring there, but speeding and lack of enforcement played a major role.
Chair Overly recognized and thanked Stephanie Craycraft for her service on the subcommittee, and congratulated her on her upcoming promotion to Assistant Budget Director. Chair Overly also congratulated Greg Rush on his upcoming promotion to Deputy Director in the Office of Budget Review.
There being no further business before the subcommittee, the meeting was adjourned at 11:15 AM.