Nebraska road funding to get boost

| 5/18/2011

Despite concerns about whether the state could afford it, Nebraska’s governor signed into law Tuesday, May 18, a major roads funding bill that taps a new source of revenue to get work done. The state has relied solely on user fees, such as fuel taxes and vehicle fees.

To help address a road funding gap, which the state has estimated will grow to $9.2 billion during the next 20 years, the new law takes one-quarter of a cent of the 5.5-cent state sales tax each year for two decades and will apply it for highway construction.

Gov. Dave Heineman voiced concern about the bill – LB84 – while it made its way through the statehouse. The governor expressed reservations about diverting sales tax revenue away from education and social services. Citing concerns about the economy, he asked lawmakers to revisit the issue down the road.

Nevertheless, Heineman ultimately went along with lawmakers. The governor’s office declined comment on his signing of the new law.

Sen. Deb Fischer, of Valentine, welcomed the news. She said the time is right for the state to move forward with transportation funding. She cited fewer dollars available from the fuel tax available for roads.

“Roads are a responsibility of government and the Legislature has made the commitment to fund this core governmental duty,” Fischer said in a statement.

The switch will not take effect until 2013. Fischer included the delayed implementation to allow the state to recover from the recession and give the Nebraska Department of Roads time to get projects ready.

A projected $65 million a year – an estimated $1.3 billion over 20 years – is expected to be deposited into a newly created State Highway Capital Improvement Fund. The fund will benefit high-priority improvement and reconstruction projects throughout the state.

A new state highway fund will get 85 percent of the money. The rest of the new revenue will go into a highway allocation fund.

At least 25 percent of the revenue allotted to the state highway fund will be used for construction of the expressway system and for federally designated high-priority projects.

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

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