Proposed Nebraska gas-tax increase wins first-round approval

By GRANT SCHULTE

Associated Press

LINCOLN, Neb. (AP) - A proposed gas tax increase won initial approval from Nebraska lawmakers on Wednesday but fell short of the veto-proof majority likely needed to override Gov. Pete Ricketts.

The phased-in tax measure cleared the first of three required votes despite loud opposition from senators who said the state should consider other ways to pay for roads and bridges.

The measure would raise the state’s fuel excise tax by 6 cents per gallon over four years, for a total state tax of 31.6 cents per gallon.

Senators voted 26-10 to advance the bill. Two more votes are required before it advances to Ricketts, a Republican who opposes the increase. If Ricketts vetoes the bill, supporters will need at least 30 senators for an override.

“I am exceptionally disappointed to learn that members of the Legislature voted to advance a hike in Nebraska’s gas tax,” Ricketts said in a statement. “Unfortunately, the Legislature has yet to debate meaningful property tax relief this session. Increasing taxes on hardworking Nebraskans is the wrong direction.”

Ricketts has said he’s conducting a national search for a new roads director who can take a fresh look at how roads are funded and suggest alternatives.

Sen. Jim Smith of Papillion, the bill’s sponsor, said the tax increase is a better option than using general-fund dollars to pay for roads and bridges because other interests compete for that money. Using general-fund money to pay for infrastructure also makes it harder to cut income taxes, he said.

“If you agree with me that we need tax reform, I believe this is a discussion we need to have,” said Smith, the chairman of the Transportation and Telecommunications Committee.

Opponents in the Legislature said the tax increase will disproportionately affect the poor because many spend a larger proportion of their incomes on gas. Conservatives argued the state’s taxes are already driving Nebraska residents out of the state.

Sen. Mike Groene of North Platte said lawmakers need to heed the call of constituents who have repeatedly called for lower property taxes. Groene said any fuel tax increase should coincide with a reduction in property taxes, and he worried about giving extra revenue to the Department of Roads.

Sen. Dave Bloomfield of Hoskins said he was initially undecided on the bill but came to oppose it after considering the potential burden on farmers. Bloomfield said he drives an old pickup that gets roughly 15 miles per gallon, and the efficiency drops to 8 miles per gallon when he hauls trailers.

“I think this gasoline tax puts an unfair burden on those who have that type of vehicle,” he said.

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. Last 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.

Sen. Mark Kolterman of Seward said he initially hesitated to support a tax increase, but feedback from his constituents showed strong support for one.

“If this is the type of bill that keeps me from being re-elected, so be it,” he said.

Last modified onThursday, 02 April 2015 14:41

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