Kentucky’s road fund ended the fiscal year on a high note with millions of dollars more than anticipated. 

Shaun McKiernan, the Transportation Cabinet’s executive director of budget and fiscal management, shared with legislators this week that the state ended the 2024-25 fiscal year with a $61.6 million surplus in the road fund.  

The motor fuels revenue was 3.5% below the state’s estimate.  A drop in the motor fuels tax rate, commonly known as the gas tax, went into effect at the beginning of 2025, which is the main reason the revenue estimate was lower than predicted, McKiernan said.  

However, motor vehicle usage tax revenue performed 11% stronger than predicted due to an increase in the purchase and registration of vehicles.

“The bottom line is the road fund revenue was $38.5 million greater than the enacted estimate,” McKiernan added. 

The 2024-26 biennium budget bill (HB 6 (2024)) directs any road fund surplus to be appropriated to “State Construction Account within the Highways budget.” 

Committee co-chair Sen. Jimmy Higdon, R-Lebanon, said the 7% drop in motor fuels tax revenue will be a “big hit” to the funding allocated for city, county, and rural secondary roads. Deputy Secretary Hancock noted that $2.8 million was not allocated to local governments due to the unexpected decrease in revenue.  

Legislators return to Frankfort in January 2026 for the 60-day budget-writing session.