Kentucky’s no-bid transportation contracts questioned

(The Center Square) – Kentucky Gov. Andy Beshear said Tuesday the state has issued more than $1 billion in transportation construction contracts, a further sign he noted the economy is picking up steam.

Those awards have come as the state’s Transportation Cabinet has provided more than $125 million in emergency and rural funding to help with upkeep on local roads and sidewalks.

“Even in the face of a pandemic, we simply could not allow a lapse in the construction, maintenance and continuous improvement of this critically vital system,” the governor said. “Now our economy is bouncing back, and transportation is a big part of that.”

Among the projects the governor touted was a $34 million road extension project in eastern Kentucky that officials expect will reduce the amount of time it takes to get between Pikeville and Hazard.

The two towns are just 40 miles apart, but residents must drive about 70 miles to get from one to the other. The new road will cut the drive by 45 minutes, or more than half the commute time.

Some, though, have raised questions about the cabinet’s spending. Last week, Jim Waters president and CEO of the Bluegrass Institute of Public Policy Solutions, a free-market think tank, wrote an op-ed piece noting the state awarded more than 60 no-bid contracts through the first four months of the year.

Those sole-source opportunities exceeded state cost estimates by more than $50 million.

Those contracts were also awarded as some lawmakers and business groups urged the legislature to increase the gas tax, which is used to fund road construction and maintenance projects.

“It’s also all a little too cozy considering large politically well-connected road contractors pushing hardest for the gas-tax hike are also the most likely to benefit with even more overpriced bids to follow,” Waters wrote.

Earlier in the day, Cabinet Secretary Jim Gray told members of the legislature’s Interim Joint Committee on Transportation the state ended the 2020 fiscal year with a nearly $60 million shortfall in the transportation budget due to the pandemic.

The initial estimate for the shortfall was $160 million, Gray said. However, the drop in car and air travel still led to a drop in funding of about 10%.

“The pandemic, especially in its early months, had a devastating effect on the Kentucky Road Fund, from which we pay for our highway program,” Gray said in the statement from the governor’s office. “But now our transportation program is gaining strength and momentum, as is our overall economy.”

The secretary told lawmakers that the CARES Act awarded the state $60.5 million in funding to help rural transit programs remain in operation.

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