LOUISVILLE, Ky. – Kentucky's tax on the sales of gasoline, diesel and ethanol fuels will drop by 4.3 cents per gallon on New Year's Day.
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Transportation officials said Wednesday the lower tax rate would cost the state Road Fund about $129 million on an annualized basis. State Transportation Secretary Mike Hancock says a revenue loss of that magnitude is "crippling," meaning less money for road and bridge projects.
The Transportation Cabinet says a $129 million revenue loss amounts to about 6 percent of Kentucky's highway program.
The lower tax rate reflects a decline in the calculated average wholesale price of motor fuels. The motor fuels tax is paid by those using highways and bridges. Its components include a variable excise tax and a supplemental user fee of 5 cents per gallon for gas.