Senators debate road construction bonds

Nebraska would borrow money to hasten road construction under a bill debated by senators March 12.

LB1092, as introduced by Fullerton Sen. Annette Dubas, would have authorized the State Highway Commission to issue up to $400 million in bonds for highway construction projects. A Revenue Committee amendment, adopted 47-0, reduced the amount to $200 million and specified that their interest rate be no greater than 5 percent.

At least 25 percent of the bond proceeds would be dedicated to construction of federally designated, high priority corridors and the expressway system through Chadron, Alliance and Scottsbluff.

Dubas said roads projects over the next 20 years would cost $14.1 billion, according to the most recent needs assessment compiled by the state Department of Roads.

“As these numbers show, Nebraska’s existing funding structure is inadequate for our transportation infrastructure,” she said.

The bonds would be repaid with revenue from the State Highway Capital Improvement Fund, which currently receives .25 percent of the state sales and use tax. LB1092 also would pledge the revenue from all fuel taxes, registration fees and other highway user fees for the purpose of bond repayment.

“Nebraska’s highway system plays a critical role in our citizens’ quality of life and our potential for economic development,” Dubas said. “When you visit with businesses and ask what are they looking for when either planning to expand or locate a new business,” she said, “they are looking for states that place the importance on modern, safe and sound transportation infrastructure.”

Despite the steady funding stream generated by the sales tax, Dubas said, the bonds are necessary to make up for the uncertainty of federal funding and the decline in gas tax revenues that result from today’s more fuel-efficient practices.

Sen. Paul Schumacher of Columbus spoke in favor of the amended bill, calling it a conservative and prudent way to take advantage of historically low interest rates.

“Let’s get some roads built; let’s get some programs accelerated … while the labor force is looking for work,” Schumacher said.

Papillion Sen. Jim Smith disagreed, saying senators should not saddle future legislatures with potential financial difficulty.

“My concern is that with the passage of [LB]1092, if [sales tax] resources were cut in the future … then that legislature would have no choice but to either cut other critical spending or to increase the motor fuel tax,” Smith said.

Omaha Sen. Ernie Chambers filed a motion to bracket the bill until April 17, citing the state Department of Roads’ opposition to the bill at the committee hearing.

“We should not force on an agency what the head of that agency does not want—unless there is a policy that is so important to the Legislature that it will be given as an order,” he said.

The bracket motion failed on a 17-27 vote, as did another Chambers amendment.

The Legislature moved on to another section of the agenda before taking further votes on LB1092. A Chambers amendment is pending.