Transportation infrastructure bank proposed

The state would allocate up to $300 million in cash reserves and gasoline tax revenue over seven years to fund a transportation infrastructure bank under a bill heard by the Appropriations Committee Feb. 16.

LB960, introduced by Sen. Jim Smith of Papillion at the request of Gov. Pete Ricketts, would create an infrastructure bank composed of three programs overseen by the state Department of Roads. The first would accelerate capital improvement projects, including the state’s expressway system and other high-priority roads projects. Another program would provide funds to repair and replace deficient county bridges and the third would finance improvements to the state’s transportation infrastructure that would support new and expanding businesses.

The bill also would authorize the department to hire a construction manager who would advise the department on project scheduling and to enter into contracts in which a single contractor designs and builds a project.

The infrastructure bank would be funded with $150 million from the state’s cash reserve and up to $150 million of state motor fuel tax for seven years, beginning on July 1, 2016. The state would transfer $16 million to the department in fiscal year 2016-17 and $28 million in FY2017-18. Any funds remaining in the bank on June 30, 2033, would be transferred to the road operations fund.

Smith said the department’s current level of funding cannot support significant new construction. Approximately $600 million in expressway projects remain unfunded, he said, and it would cost another $800 million to bring the state’s county bridges up to standard. He said the infrastructure bank would supplement a 2011 appropriation to fund surface transportation and a law passed last year that raised the state’s gasoline tax by 6 cents per gallon.

“It’s a necessary step if we want to pull our state out of the rut our critical transportation infrastructure has fallen into due to many, many years of neglect and inaction,” he said.

Kyle Schneweis, director of the state Department of Roads, spoke in support of the bill. He said the bulk of the funds would be used to finish long-awaited projects like the state’s expressway system, as well as interchanges and railroad overpasses. Using design-build contracts could save two to four years on large, complex projects like those, Schneweis said.

“All the money in the world will not help us deliver projects tomorrow,” he said. “Projects take time to develop, and in the past in Nebraska they’ve taken too long to develop.”

Rick Kuckkahn, Scottsbluff city manager, testified in support of the bill. Speaking on behalf of the city and the League of Nebraska Municipalities, he said completing Nebraska’s expressway system would benefit agriculture and tourism, two of the state’s most important industries. He said a more modern transportation network also would help cities in western Nebraska better compete with Colorado, Wyoming and South Dakota when trying to attract new businesses.

“We have lots of opportunity for more growth and development facilitated by faster completion of our expressway system,” Kuckkahn said.

Dirk Petersen, vice president and general manager of Nucor Steel in Norfolk, also spoke in support of the bill. Speaking on behalf of 4 Lanes 4 Nebraska and the Nebraska Chamber of Commerce, he said completing the state’s expressways would create jobs, add billions of dollars to the state’s gross domestic product and improve public safety.

Petersen said that without the promise of a four-lane highway connecting Norfolk to the interstate system, the city could not recently have attracted a pipe manufacturer that will build a $130 million facility there, creating 200 jobs and generating $20 million in property tax revenue.

“It’s hard to know just how many opportunities and how many jobs Nebraska has lost because we haven’t put the right infrastructure in place,” he said.

Pam Dingman, Lancaster County engineer, testified in a neutral capacity. She said the county’s infrastructure needs are stark—more than 90 of the county’s bridges are more than 50 years old. Projects meant to fund bridge repair already exist and the proposed design-build contracts can be more expensive than traditional contracting methods on smaller projects, she said.

No one testified in opposition to the bill and the committee took no immediate action on it.