Proposed fuel-tax increase divides Nebraska lawmakers

By GRANT SCHULTE

Associated Press

LINCOLN, Neb. (AP) - Nebraska lawmakers remained split Tuesday over a proposed fuel-tax increase as they debated the best way to pay for roads and bridges.

The measure would phase in a 6-cent increase over four years, raise the total gas tax to 31.6 cents per gallon and generate an estimated $19 million a year for the aging infrastructure.

Sen. Jim Smith of Papillion said he proposed the bill as a “user fee” because it only applies to motorists when they fill their tanks.

Smith, a conservative business owner who regularly advocates for tax cuts, said the fuel tax is pro-commerce and gives the state a pay-as-you-go option to pay for infrastructure. Smith said he preferred raising the fuel tax to using general-fund dollars, which would make it harder to lower taxes.

“I convinced my constituents that I had conservative principles, that I was a pro-business person,” said Smith, chairman of the Transportation and Telecommunications Committee. “I have to use those principles to make wise policy decisions - and this is a wise policy decision.”

Sen. Paul Schumacher of Columbus chastised lawmakers for bickering over “minuscule” tax cuts and invoked the Eisenhower-era infrastructure projects that led to interstate highways, now a crucial part of the nation’s economy.

“We know that to have a future, we need to invest in the present,” he said.

Other senators questioned the measure’s timing - introduced when gas prices have fallen - and argued the tax hits hardest the motorists who can least afford it.

Sen. Beau McCoy of Omaha said he would rather see the state divert an additional quarter-cent of its existing sales tax revenue into road projects. A similar bill was sponsored by then-state Sen. Deb Fischer of Valentine in 2011.

“I think this (fuel tax increase) has the potential to really affect Nebraska in a way that’s not helpful,” McCoy said.

Smith said that approach wouldn’t generate enough revenue to meet the state’s needs.

Sen. Bill Kintner, also of Papillion, said he viewed the “user fee” approach as the best way to pay for roads and bridges, but opposed it because senators haven’t passed tax cuts to offset the proposed increase.

Nebraska’s gas was the 26th most expensive nationally because of its taxes and fees as of Jan. 1, according to the American Petroleum Institute. Earlier this month, the state’s gas tax fell behind Iowa’s for the first time in decades after a new 32-cent gas tax went into effect there.

Gov. Pete Ricketts opposes the increase. In his weekly newspaper column last week, the Republican governor said he’s conducting a national search for a new roads director who can take a “fresh look” at how the state’s roads are funded. Ricketts suggested looking at public-private partnerships and changing regulations to provide more flexibility.

“While proponents of the gas tax increase have raised important concerns about the state of Nebraska’s roads and bridges, there are alternatives our state should first explore,” Ricketts said. “Raising taxes should never be the first line of defense.”

Smith said he’s confident the new director will find efficiencies in the department, but cities and counties also have a large need.

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