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Transportation cabinet reports FY26 road fund shortfall; members warned projects are delayed
Summary
Executive director Sean McKiernan told the committee that FY26 road fund collections were 2.2% below FY25 and motor fuels tax revenues declined by about $45.7 million, prompting reductions to revenue sharing and other balancing steps that could delay local projects.
Sean McKiernan, executive director of the Office of Budget and Fiscal Management in the Transportation Cabinet, presented the FY26 road fund closeout and said the cabinet took specific steps to balance the fund after revenues came in below expectations.
McKiernan said motor fuels tax revenues were the largest source of the variance, noting that "the largest of these deck of the declining revenue sources was motor fuels taxes, which dropped $45,700,000." He told the committee that overall FY26 road fund collections were 2.2% less than FY25 and that total receipts were $41,600,000 lower. McKiernan said motor vehicle usage tax collections were higher than budgeted—about 11.2% over the enacted budget and described an annual amount of roughly $734,200,000 for that account.
To address the shortfall, McKiernan said the cabinet reduced the revenue sharing appropriation by $65,100,000 for FY26, identified unexpended appropriations, used transfers tied to capital projects, and cut roughly $8,000,000 from state construction to balance the fund. Committee members warned that fewer bids have been issued and rural secondary projects, bridges and resurfacing are at risk if revenue trends continue. Chair and members asked for follow‑up analysis on options to shore up long‑term road funding.
