Nebraska's fuel tax rate on the rise?

By Keith Goble, Land Line state legislative editor | 4/9/2015

Despite the objections of Gov. Pete Ricketts, the Nebraska Legislature is nearing passage of a bill to raise the state’s fuel tax rate by 6 cents per gallon over four years. The tax increase is estimated to raise $63.5 million per year by 2019.

The state’s fuel tax now is 25.6 cents per gallon. The tax rate includes a fixed component set at 10.3 cents. The state Department of Roads claims 7.5 cents per gallon of the fixed rate while cities and counties get 2.8 cents.

The Legislature voted 26-10 to give initial approval to a bill to increase the tax rate. Two more votes are necessary before the bill, LB610, can move to the governor’s desk.

Ricketts is opposed to efforts to increase taxes. He said Nebraskans have told him they want tax relief, not tax increases.

“I applaud the senators that did take a stand against increasing the gas tax, and I hope that their colleagues will join them in voting against raising the tax during the next round of debate,” Ricketts said in prepared remarks.

LB610 calls for increasing the fixed rate by 1.5 cents per gallon on Jan. 1, 2016. Additional 1.5-cent increases would kick in each year through January 2019 when the fixed rate reaches 16.3 cents.

Each penny increase is estimated to raise $12.7 million annually for road and bridge work throughout the state.

One-half cent of the annual rate increases would be earmarked for the Department of Roads. The other penny increase each year would be divided between cities and counties for local projects.

If the governor vetoes the bill to increase the state’s total fuel tax to 31.6 cents per gallon, at least 30 of the state’s 49 senators would need to vote to override.

Copyright © OOIDA