Call to Order and Roll Call
The second meeting of the Budget Review Subcommittee on Transportation of the Interim Joint Committee on Appropriations and Revenue was held on Monday, November 16, 2015, at 10:30 AM, in Room 131 of the Capitol Annex. Representative Leslie Combs, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Max Wise, Co-Chair; Representative Leslie Combs, Co-Chair; Senators Ernie Harris, and Dennis Parrett; Representatives Hubert Collins, Jim Gooch Jr., Dennis Keene, Russ A. Meyer, Sal Santoro, John Short, and Jim Stewart III.
Guests: Russ Romine, Deputy Secretary, Transportation Cabinet; Richard Dobson, Executive Director, Office of Sales and Excise Taxes, Department of Revenue, Finance and Administration Cabinet.
LRC Staff: Justin Perry, Jeff Schnobrich, and Spring Emerson.
Chair Combs called for a motion to approve the minutes of the last meeting. The motion was made by Senator Wise, seconded by Representative Gooch, and the minutes were approved without objection.
State Funding Update
Mr. Romine provided a brief update of state and federal funding in the Transportation Cabinet.
In response to questions from Representative Collins, Mr. Romine said weight distance tax is the largest factor in the Other category for state funding losses, with some of the other large receipts in the Other category being vehicle licensing and truck registrations. The official revenue estimate is based on December 2013 estimates. For FY 2016, if the $1.43 billion comes to bear, it would be 6.1 percent less than actual receipts for FY 2015. Total estimated receipts for FY 2017 and FY 2018 are essentially flat, with only a slight growth in FY 2018. When the Consensus Forecasting Group meets next month, they will provide an official estimate, upon which the Governor will base his recommended budget.
Federal Funding Update
In response to questions from Representative Collins, Mr. Romine said the trend of other states including taxes on electric vehicles to make up the loss of road funding may become a possibility for Kentucky as well. The number of electric vehicles will increase, which will also impact road funding.
In response to questions from Representative Stewart, Mr. Romine said projects already authorized would be funded. He added that current receipts are back to FY 2012 levels.
Aviation Jet Fuel Tax
Mr. Dobson provided a brief overview of the aviation jet fuel tax and the number of air carriers that reach the annual $1 million per carrier cap on jet fuel tax revenues.
In response to questions from Representative Collins, Mr. Dobson said he could not respond regarding specific air carriers due to confidential tax records. He said some of the carriers had recently certificated and had become involved in taking advantage of the tax credit and would not be shown on the presentation as historical data.
In response to a question from Chair Combs, Mr. Romine said the Transportation Cabinet was able to obtain specific carrier information up until 2009. Mr. Dobson said the Department of Revenue sends a spreadsheet to the Transportation Cabinet on a monthly basis disclosing the taxing information, due to sharing agreements between state agencies.
In response to a question from Representative Collins, Mr. Dobson said the Department of Revenue has the information on the individual carriers and amount of taxes paid, but cannot release the information due to disclosure arrangements.
In response to a question from Senator Harris, Mr. Dobson said the tax that is attributed to jet fuel sales is transferred to the Aviation Development Fund on a monthly basis.
In response to a question from Senator Parrett, Mr. Dobson said the confidentiality of the tax information of air carriers is treated similarly to that of individual tax information.
In response to a question from Chair Combs, Mr. Dobson said one of the carriers listed on the bar graph had just qualified at the end of the fiscal year.
In response to a question from Chair Combs about previously supplied conflicting information, Mr. Dobson said that the information currently being presented was correct.
There being no further business before the subcommittee, the meeting was adjourned at 11:20 AM.