Next year’s session of the Kentucky General Assembly is still four months away, but the conservative political advocacy group Americans for Prosperity-Kentucky is getting a head start with a new digital campaign to oppose any legislation to increase the state’s gas tax.
Despite bipartisan support and backing by chambers of commerce, House Bill 609 failed to receive a vote in this year’s session of the General Assembly, which would have raised the gas tax by 10 cents a gallon and created new fees for hybrid and electric cars.
While supporters of HB 609 argued that it would generate $433 million of revenue each year for state and local governments to make needed improvements to crumbling transportation infrastructure, Americans for Prosperity lobbied against it as an “unfair, unnecessary, regressive tax increase,” suggesting that the state should instead cut wasteful spending and prioritize transportation funds.
In a news release announcing its digital campaign — featuring web ads and an online petition — AFP-KY warned that this legislation would come back in next year’s legislative session, calling it “a band-aid for egregious overspending in a system that desperately needs fundamental reform.”
“Proposing a new gas tax hike will hit drivers right where it hurts the most: their pocketbooks,” stated AFP-KY director Andrew McNeil. “It’s time for legislators in Frankfort address necessary reforms to curtail their excessive spending and start to prioritize projects to fix our roads, bridges, and infrastructure in a fiscally responsible way.”
McNeil declined to disclose to Insider Louisville how much AFP-KY — a key part of the Koch brothers’ political advocacy network — was spending on the ads.
While this conservative group is putting its money behind stopping a gas tax increase, HB 609 found bipartisan backing in the 2018 session and was advocated for by both left-leaning think tanks like the Kentucky Center for Economic Policy, and right-leaning business groups like the Kentucky Chamber of Commerce and Greater Louisville Inc.
In a letter to legislators in March advocating for HB 609, Kentucky Chamber CEO Dave Adkisson noted that Kentucky is heavily dependent on manufacturing and logistics, which makes it critical for the state to address its $1 billion backlog of maintenance and paving and the $490 million needed annually for significant projects.
“As Kentucky struggles to find the funds to make improvements and invest in new projects, surrounding states including Indiana and Tennessee have taken proactive steps to ensure their infrastructure resources keep up with the economic development investment they are experiencing,” wrote Adkisson. “Increasing the gas tax and current fees and creating new fees would generate significant economic impact as Kentucky improves its infrastructure for current and future businesses.”
Most states have raised their gas tax in the past five years, and neighboring states Indiana, Tennessee and West Virginia did so last year.
With the amount of gas tax revenue taking a hit in recent years with the rise in fuel-efficient, hybrid and electrical vehicles, HB 609 also sought to make up for this loss in revenue by imposing annual fees — $50 for hybrid vehicles, $100 for plug-in hybrids and $150 for entirely electric vehicles. The cost of registering any vehicle — which has not been changed since 1968 — would have also nearly doubled to $22.
The Kentucky Center for Economic Policy noted that the legislation would have also dramatically increased the amount of annual revenue going to counties and cities through the Municipal Road Program and County Road Aid Program, including over $7 million for Jefferson County.
Despite bipartisan sponsorship of the bill and local governments also pushing for its passage, the bill did not even receive a vote in committee, which many observers believed was a result of legislators’ reluctance to vote for a tax increase in an election year.
As of Thursday morning, no bills relating to the gas tax have been prefiled for next year’s session of the General Assembly, which kicks off in January.