1. Strategic Highway Investment Formula for Tomorrow
SHIFT Kentucky Ahead
Strategic Highway Investment Formula for Tomorrow

2. More Projects Than Dollars
For many years, Kentucky’s highway plan has overpromised
More than 1,400 projects in the Highway Plan
Only half are even partially funded, mostly with federal dollars
Result: Undermines public confidence because you can’t count on projects in the plan
Kentucky’s Highway Plan has overpromised for many years
Only half of the 1,400 projects are even partially funded
The public doesn’t have confidence in the plan

3. State Projects Vastly Exceed Funding
More than 90 percent of the state-funded projects in the current Highway Plan don’t have state dollars to pay for them
In other words, Kentucky has 10 TIMES as many state-funded highway projects budgeted as dollars available
Overpromising creates expectations that cannot be fulfilled for many years – if at all
Kentucky is overpromising state dollars for projects.
We only have money to pay for 10 percent of the $7.1 Billion of projects promised with state funds in the Highway Plan.
As you can see, the comparison is stark. The promises are far greater than the $690 Million in state dollars we anticipate to be available in this time frame
This includes the $50 Million in the current biennium

4. Loss of Flexibility Means Fewer Projects
Federal funds require state matching dollars
Since 2002, Kentucky has met the state match with earned credits (dollars invested to build our parkway system)
By 2020, earned credits will run out and Kentucky must use state dollars to match federal dollars
Result: The number of state-funded projects will be drastically reduced
The problem of over programming will soon go from bad to worse
To get federal funding, Kentucky must provide a match (typically 80/20 or 90/10)
For 15 years, Kentucky has met the required state match for federal dollars by using earned credits, dollars invested decades ago in the state’s parkway system
Because Kentucky built national highway system roads with state-generated dollars, we earned credits
But in 2020, Kentucky will run out of earned credits
That will require us to use $100 million in state funds annually to meet the federal match
This will drastically reduce the dollars and numbers of state-funded projects

5. Gap Between Promises and Funds to Grow
Without program reforms, the combination of overpromising and the end of earned credits will further widen the gap
Unless we act, 95 percent of state-funded projects in the Highway Plan will not have any state dollars to pay for them
So in the 2018 General Assembly, the end of earned credits will exacerbate the problem of overpromising.
As a result, the gap will widen between what we promise in state-fund projects and what we can deliver with available dollars
Without changes in the system, as much as 95 percent of state projects in the Highway Plan will be unfunded

6. SHIFT Kentucky Ahead Strategic Highway Investment Formula for Tomorrow
The result of the Cabinet’s work is called SHIFT
The Strategic Highway Investment Formula for Tomorrow

7. SHIFT Focuses on Capital Improvements
Projects Included
Projects Outside of SHIFT
Safety Improvements
Rural and Municipal Aid
Road Widening
MPO Dedicated Projects
Reconstruction
Other Federally Dedicated Projects
(safety, bike/ped, congestion, etc.)
New Interchanges
Maintenance Projects
(pavement, bridges, etc.)
New Routes
SHIFT will be used to evaluate and prioritize capital improvement projects
The formula won’t affect Rural and Municipal Aid funds or federally dedicated projects, such as safety, bike/ped and MPO projects
It won’t be used for system preservation projects such as pavement and bridge replacements and repairs

8. Proposed Statewide Funding Formula
Priority
Score
Improve Safety
25%
Reduce Congestion
20%
Fuel Economic Growth
Spend Tax Dollars Wisely
(benefit /cost)
Preserve Infrastructure
(asset management)
15%
TOTAL
100%
We will score projects using two formulas – one for projects of statewide impact, including interstates and projects on main roadways
This formula relies solely on quantitative data, again information such as crashes, project benefit to cost ratios, etc.

9. Proposed Regional Funding Formula
Priority
Score
Improve Safety
20%
Reduce Congestion
10%
Fuel Economic Growth
15%
Spend Tax Dollars Wisely
(benefit/cost)
Preserve Infrastructure
(asset management)
SUBTOTAL
70%
District Priorities (KYTC)
Local Priorities (ADD/MPOs)
TOTAL
100%
The second formula will be used to prioritize the use of regional funding
This formula includes significant qualitative data (the informed opinion of KYTC district staff, and local leaders in ADDs and MPOs)
In this formula, 70 percent of the score relies on quantitative data and 30 percent on qualitative data

10. Developing The Next Highway Plan
KYTC Develops Initial Project List
District, Local Leaders Identify Needed Changes
KYTC Calculates Scores for Statewide, Regional Projects
District, Local Leaders Provide Input on Regional Projects
KYTC Develops Draft Highway Plan for Governor
Governor Finalizes, Presents Plan to General Assembly
General Assembly, Governor Enact Highway Plan
SHIFT provides a collaborative process that involves district and local officials throughout the process
It begins with KYTC developing an initial list based on the current Highway Plan, a baseline if you will
District and local leaders have the opportunity to suggest changes – additions, deletions – and involve citizens in the discussion
With the revised lists, KYTC will use the formulas to score the projects
KYTC will share those results with district and local leaders
They will then have a chance to weigh in on which regional projects should move up in the priority rankings
With this data and revenue estimates, KYTC will develop a draft Highway Plan to present to the Governor
The Governor will finalize the plan and present it to the General Assembly for action

13. Pause 50 Funding Pause 50 has served to stabilize the Road Fund
Transitioning to prioritization model
SHIFT model will be used to guide decisions about spending limited dollars in the 2018 fiscal year
We’re already working to use this data-driven approach to prioritize the very limited dollars from Pause 50 in the current biennium
The result will likely include a combination of different project phases (design, right of way, utilities and construction)
We will have about $50 million in available funding for these new starts in the fiscal year

14. Strategic Highway Investment Formula for Tomorrow
SHIFT Kentucky Ahead
Strategic Highway Investment Formula for Tomorrow