State sales and use tax revenue could fund highway bonds

The Transportation and Telecommunications Committee heard testimony Feb. 1 on a resolution that would expand the use of state sales and use tax revenue.

LR3CA, introduced by Valentine Sen. Deb Fischer, would allow state sales and use tax revenue to be applied to the payment of highway bonds. Currently, highway bonds can be repaid only with state revenue that is directly related to highways.

The resolution was introduced in conjunction with LB84, also introduced by Fischer, which is a major highway funding proposal that would include the use of highway bonds.

The bonds would be paid off with state sales tax revenue, Fischer said, and currently the state constitution prohibits such a process. In order for bonding to be included in the bill, the resolution must be passed, she said.

Dacia Kruse, director of public policy and state issues for the Greater Omaha Chamber, testified in support of LR3CA, saying there needs to be a tool to help fund roads in the state.

It would be great if the state could maintain a pay as you go system, Kruse said, but that system is not keeping up with road maintenance needs.

“Responsible bonding is one mechanism that would fix that problem,” she said.

Jackie McCullough, executive director of the American Council of Engineering Companies of Nebraska, also testified in support of the resolution.

There are few user fees to support roads, McCullough said, so bonding is an important part of the solution to help fund road and highway projects.

“The funding of our roadways has diminished and unfortunately the needs have not diminished,” she said.

The committee took no immediate action on the resolution.