The state highway commission could issue up to $400 million in bonds over the next six years to speed completion of Nebraska’s expressway system under a bill discussed on general file May 12.
LB542, as introduced by Fremont Sen. Lynne Walz, would authorize the commission, upon recommendation of the state Department of Transportation, to issue up to $400 million in bonds to accelerate completion of highway construction projects under the Build Nebraska Act. Annual debt service could not exceed $30 million.
The act, passed by the Legislature in 2011, dedicates one-fourth of 1 percent of state sales tax revenue to road projects, including the expressway system, between 2013 and 2033.
Bonds could be issued between July 1, 2021, and June 30, 2027, and would be paid off by June 30, 2040.
Walz said the expressway system — one-third of which remains unfinished more than 30 years after it was approved by the Legislature — is an example of why Nebraska’s traditional pay-as-you-go highway construction model cannot meet the state’s infrastructure needs.
Unless alternative financing methods such as bonding are used to accelerate the project’s completion, she said, its cost will continue to increase due to inflation and rising construction costs.
A pending Revenue Committee amendment would increase the total amount of bonds that could be issued to $450 million.
It also would require that at least 75 percent of the bond proceeds be used for construction of the expressway system and federally designated high-priority corridors. The remaining proceeds would be used to pay for surface transportation projects of the highest priority, as determined by the department.
Sen. Mike Hilgers of Lincoln, speaker of the Legislature, said he would “park” LB542 until next session and retain its priority status. He said lawmakers should wait to consider the proposal in light of a potential federal infrastructure bill that could include significant roads funding for states.
Lawmakers moved to the next item on the agenda without voting on LB542 or the amendment.