With $4.6 billion or more projected, how will KY spend its infrastructure funds?

U.S. Senate Minority Leader Mitch McConnell joined nearly every Democrat in Washington and Kentucky in celebrating the recent passage of a massive $1.2 trillion bipartisan infrastructure bill.

McConnell notably called it a “godsend” for Kentucky, as his office projected $4.6 billion in funds over the next five years flowing to infrastructure projects. Nationally, about $550 billion of the total bill is new spending.

The American Road and Transportation Builders Association (ARTBA) estimates Kentucky will receive at least $4.58 billion or as much as $5.48 billion in “highway, bridge and transit investment” from the infrastructure package.

Though all the other Republicans in Kentucky’s federal delegation voted against the bill, the money is coming. What to do with it, McConnell noted recently, will be decided in Frankfort, where the Republican-led legislature and Gov. Andy Beshear, a Democrat, seem poised for yet another back-and-forth over what money goes where, and whose ideas for it get elevated.

So far, discussions between leading lawmakers and the Beshear Administration have yet to take place regarding either side’s priorities for the money.

The politics of infrastructure

Republicans have the power of the purse via veto-proof supermajorities in both chambers of the statehouse. Still, Beshear was quick to mention that his executive branch is charged with acting on their policies — a point that he used as a call for unity on use of the infrastructure funds.

“Certainly, you could think the legislature could go it alone on what to do, but then we’ve got to effectuate it,” Beshear said. “All of us sitting down and getting a good idea of where we want to go is important.”

Republican leaders in both the Senate and the House emphasized their control over the funds.

“Everybody’s going to have their priorities,” said House Speaker David Osborne, R-Prospect. “As far as a dispute over who has the authority, there is no dispute over that — and I say that as candidly as possible. The legislature appropriates the dollars.”

Osborne and Senate Majority Floor Leader Damon Thayer, R-Georgetown, also warned against wasting the money.

Thayer added that he likely wouldn’t have voted for the bill were he in Washington, echoing public complaints from U.S. Rep. Andy Barr and other Republican members of Kentucky’s congressional delegation.

“The profligate spending by Congress is something of great concern to me and to my constituents,” Thayer said. “But now that the money is coming, we have to spend it.”

Osborne shared the same concerns about government spending, bringing up the nation’s increasing debt, but called the funds “a once in a generation” opportunity if spent responsibly.

But considering the traditionally bipartisan nature of infrastructure investments, it’s unclear what differences in opinion, if any, the governor and the legislature will have on how the funds get spent.

The governor will get the first opportunity to lay out a budget in advance of the upcoming legislative session, which is set to begin Jan. 4.

When asked about priorities, there wasn’t much difference between what Beshear and the two leaders expressed.

All three mentioned major projects like the Brent Spence Bridge — a notoriously problematic Ohio River crossing which carries about $1 billion in freight across the Kentucky-Ohio border each day. Thayer, whose districts snakes up into Northern Kentucky, said he hopes to see the bridge improved without implementing tolls; Beshear has echoed this desire. Kentucky’s share of the bridge project’s cost is an estimated $1.3 billion.

Brent Spence Bridge is one of three existing “mega projects” identified by the state’s six-year highway plan, an important document which lawmakers and special interest groups have regularly referenced in discussions about prioritizing the funds. Other projects include the ongoing widening of the Mountain Parkway, which runs from Winchester to Salyersville, and the effort to fund an Interstate-69 crossing from Henderson, Ky. to Evansville, Ind.

In early 2020, costs for completing the Mountain Parkway widening, which has been ongoing since the mid-2010s, were estimated at around $350 million. The I-69 bridge at Henderson was projected to cost the state around $914 million in May, 2020, when the six-year plan was enacted.

“We already know that those are priority items that we set forth in an official document, so we can get those out of the way without having to sit around and make up a wishlist,” Osborne said.

The only Kentucky project explicitly identified in the infrastructure bill is the Louie B. Nunn Cumberland Expressway’s designation as a spur of I-65. The designation for that highway, which connects Bowling Green to Somerset, has long been sought after by the state’s congressional delegation and makes it eligible for federal aid.

Chuck Wolfe, spokesman for the Kentucky Transportation Cabinet, said “the bulk” of Kentucky’s allotment would go towards construction and maintenance projects identified in the six-year road plan. Those projects include massive new construction as well as granular improvements, like new guardrail needs identified by each county.

“This is what we know at this point: the bulk of Kentucky’s share of funds from the infrastructure bill — whatever that turns out to be — will continue the cabinet’s normal federal-aid highway construction and maintenance program with projects already in the six-year state highway plan,” Wolfe said.

Beshear, at a news conference on Monday, estimated that more than $600 million will be made available for water and sewer projects in low-interest loans.

ARTBA’s more conservative $4.58 billion estimate for Kentucky includes $2.58 billion from the National Highway Performance Program and $1.25 billion from the more flexible Surface Transportation Block Grant program, some of which could be used to address bridges in need; almost $273 million would come from the Highway Safety Improvement Program. The remaining almost half billion, per the analysis, would go towards transit-related environmental programs, railroad-highway crossings, highway freight and metropolitan planning.

How it’s administered

The rules are not yet set for how the money will flow from the federal government to various projects, according to lawmakers and close observers.

Chad Larue, Executive Director of the Kentucky Association of Highway Contractors, said the six-year plan is the closest anyone has to an indication of how most of Kentucky’s infrastructure funds will be spent. He said state Transportation Secretary Jim Gray told him as much in conversations before the bill was passed.

“When I asked questions to him, his comment was ‘we’ve got a plan that has all the identified needs, plus some additional needs unfunded,’” Larue recalled. “‘We’ll utilize that plan with whatever funding comes along.’”

Within that plan, Larue guessed that it would be a matter of deciding which projects to bump up in their estimated completion timeline, since the six-year plan was written before the influx of infrastructure dollars.

When asked about the impact inflation would have on the proposed projects, Larue estimated that the extra money would outpace even the most aggressive inflation projections by about twice as much.

“I would definitely anticipate that the money would still be a net gain, even five years out with what we’re seeing today,” Larue said.

As for municipalities, Kentucky League of Cities Executive Director J.D. Chaney said a lot is up in the air.

He said it was more likely that cities would apply directly to the federal government for their desired improvements. Reports from Washington indicate that most of the money doled out by U.S. Secretary of Transportation Pete Buttigieg will be decided using complex formulas, but Buttgieg has roughly $120 billion in discretionary spending.

State roads, Chaney said, are more likely to get funding from the bill. Chaney was quick to point out, however, that several cities’ main streets are state roads.

Regardless of what the federal government’s guidance dictates, both Beshear and Republican leaders said they look forward to spending the money.

“Just like a good job, a good road or bridge isn’t red or blue,” Beshear said.