County road funding remains a major concern for Kentucky’s local governments, as counties face declining revenue and rapidly increasing costs to maintain the roads and bridges their communities depend on.
KACo Public Policy Manager Kayla Smith highlighted the challenge this week during testimony before the Interim Joint Committee on Transportation, telling lawmakers that counties need a sustainable, predictable source of revenue to keep pace with the growing cost of road maintenance.
Kentucky has nearly 80,000 miles of roads, and counties own and maintain approximately 40,000 miles – half of all road miles in the state. Counties also are responsible for more than 5,000 bridges, or roughly 35% of all bridges in Kentucky.
For counties, the primary source of funding for this responsibility is County Road Aid. Under Kentucky’s revenue-sharing formula, counties receive 18.3% of the state’s motor fuels tax receipts for county roads, with those funds distributed through the Fifths Formula.
But Smith said that County Road Aid has struggled to keep pace with both the needs of counties and the rising cost of road construction.
In fiscal year 2014, County Road Aid totaled $151.7 million. In FY2026, that amount had fallen to $132.6 million, approximately 13% less in actual dollars than counties received 12 years earlier. County Road Aid is projected to decline further to $129 million in FY2027.
“Counties today are receiving over $20 million less in County Road Aid than they did more than 12 years ago,” Smith said.
The purchasing power gap
The decline is even more significant, Smith said, when inflation and rising construction costs are considered.
According to the National Highway Construction Cost Index, highway construction costs have increased by roughly 100% since FY2014.
“County Road Aid would have needed to be more than $300 million in FY2026 just to have the same purchasing power it had in FY2014,” Smith said.
A growing maintenance backlog
The funding gap has consequences for the condition of county roads.
Because counties are also responsible for providing essential services, such as public safety and county jails, many fiscal courts do not have the ability to use their general fund for road maintenance.
“The result is that fewer miles of road can be resurfaced each year while more roads deteriorate into poor or failing condition,” Smith said. “When routine maintenance is deferred, relatively minor repairs can become much more expensive rehabilitation or reconstruction projects.”
Recent state investments have helped counties make progress. The Local Assistance Road Program, the County and City Bridge Improvement Program and a new county road grant program have provided resources for critical projects across the state.
But Smith emphasized that project-based funding does not equate to a dependable revenue stream for counties.
“These investments cannot replace the predictable revenue that counties need to maintain the county road system year after year,” she said.
Growing the pot
Smith told committee members that Kentucky needs to look beyond simply shifting existing road dollars.
“Counties need more funding. The state needs more funding. And Kentucky needs a sustainable way to fund its roads and bridges,” she said.
KACo remains committed to working with the General Assembly on a long-term solution that grows the resources available for roads and bridges and helps counties maintain the infrastructure Kentuckians rely on every day.
- Click here to view KACo's County Road Aid presentation
