Nebraska lawmakers to consider higher fuel taxes for roads

| 1/14/2005

Because funding for state highway repairs and other projects in Nebraska has not kept pace with demand, two proposals related to the cost of fuel have been introduced before lawmakers.

One measure would hike the state’s fuel tax, while another would keep cities from raising it on their own. The efforts to increase highway dollars have been packaged together.

The legislation, introduced by Sen. Tom Baker of Trenton, would increase the state’s fuel tax by as much as 4 cents per gallon, with much of the additional revenue being directed to cities. Tucked into the bills is a provision barring cities from levying occupation or business taxes related to fuel.

Baker’s initiatives could increase revenue to cities and counties across the state by $37.5 million annually, the Lincoln Journal Star reported.

The first of Baker’s two bills – LB252 – would raise the state’s fuel tax by 2 cents per gallon. Revenue from roughly half the increase would go to cities and counties. The remaining portion would go to the state Department of Roads, which estimates it will have $1.3 billion less than it needs to pay for road repairs over the next 20 years.

According to the newspaper, an increase of 1 cent per gallon brings in about $12.5 million annually, roughly one-fifth of the $1.3 billion shortfall when multiplied over 20 years.

The other bill – LB253 – calls for increasing the portion of the state fuel tax dedicated to cities and counties from 2 cents to 4 cents per gallon.

The legislative package has been forwarded to the Revenue Committee.