Nebraska road funding debate continues

| 4/15/2011

Nebraska lawmakers are expected to further discuss a bill next week to address the state’s highway funding shortfall. They will also address changes that could make the bill more palatable to some lawmakers.

The state Department of Roads must cope with a highway funding gap that is estimated to grow to $9.2 billion during the next 20 years. To help address the situation, Sen. Deb Fischer, of Valentine, offered a bill to take a half-cent of the state sales tax each year for the next two decades and earmark it for highway construction.

A projected $125 million a year would be deposited into a newly created State Highway Capital Improvement Fund. The fund would benefit high-priority improvement and reconstruction projects throughout the state.

“I believe now is the time to make a commitment to our citizens that we will continue to provide safe and reliable highways,” Fischer said in a statement.

The bill – LB84 – has received first round approval from lawmakers with a second round of discussion scheduled for next week. Concerns about diverting sales tax revenue away from education and social services could lead to the bill’s demise.

In hopes of passing muster with lawmakers once again Fischer has offered to scale back her plan. An amendment from Fischer calls for devoting one-quarter of a cent of the sales tax for road construction – half of the original proposal.

As a result, revenue routed for roads would be cut in half to about $60 million to $65 million.

Despite the concession from Fischer, the bill continues to have a tough row to hoe. Citing concerns about less money available for education and other purposes, Gov. Dave Heineman said he doesn’t support the effort. Instead, he is calling for lawmakers to revisit the issue down the road.

Fischer said the state cannot wait. She cites fewer dollars available from the fuel tax available for road work.

As written, the switch wouldn’t take effect until 2013. Fischer wants to delay implementation to allow the state to recover from the recession and give the NDOR time to get projects ready.

At least 25 percent of the revenue allotted to the fund would be used for construction of the expressway system and for federally designated high-priority projects. Counties and cities would get 7.5 percent annually for local projects.
“Cities and counties also receive revenue under my bill, which should help with property tax relief. LB84 funds what I believe to be a priority of government without raising taxes or fees,” Fischer stated.

To view other legislative activities of interest for Nebraska, click here.

Editor’s Note: Please share your thoughts with us about the legislation included in this story. Comments may be sent to