Governor announces emergency payment to counties to partly offset sudden reduction of truck registration fees

FRANKFORT, Ky. (Nov. 5, 2008) - Gov. Steve Beshear today announced a one-time, emergency payment of $5.2 million to counties to soften a sudden reduction of the revenues with which counties build and maintain local roads and bridges.

The revenues in question are from license fees on commercial vehicles and registrations of commercial trucks engaged in interstate commerce. The reduction had multiple causes, including the weak national economy, which has resulted in fewer commercial truck registrations.

"Our counties depend on these revenues for their roads and bridges," Gov. Beshear said. "Any disruption of revenues has the potential to create a local budget emergency, especially in counties with smaller populations. Recognizing that, my administration is taking action to help our county governments through this one-time use of Rural Secondary Roads emergency funds."

Under Kentucky law, 30 percent of commercial license and truck registration fees are returned to counties for construction, reconstruction and maintenance of local roads and bridges. Disbursements to counties for 2008 totaled $19.8 million, down from $27.4 million in FY 2007.

Each county receives an equal share, which for FY 2008 was $165,157 - a reduction of $63,330 from FY 2007. The emergency payment will be $43,610 per county, offsetting all but $19,720 of the reduction.

Reasons for the reduction:

Correction of a $1.5 million overpayment to counties in FY 2007. The Kentucky Transportation Cabinet mistakenly commingled 2007 commercial truck registration fees, which were subject to revenue sharing, with ad valorem tax receipts, which were not. Failure to separate the funds created an inflated balance in the county distribution holding account. Impact: $24,940 per county.

Incorrect coding of 6,000-pound truck plates. Some county clerks coded such plates as commercial, making the fees subject to revenue sharing. The coding should have applied only to vehicles in actual commercial use. Impact: $18,670 per county.

Passage of legislation in 2006 to abolish commercial registration for trucks from 6,001 to 10,000 pounds. The registration fee for such vehicles dropped to $11.50 from $24. Impact: $1,800 per county.

Decline in commercial truck registrations. Impact: $17,920 per county.