Incremental fuel tax increase of 1.5 cents advanced

Following two days of debate, legislators gave first-round approval April 1 to a bill that would increase the fixed fuel tax by 1.5 cents annually for four years.

Currently, the fixed fuel tax appropriated to the state Department of Roads is 7.5 cents on each gallon of gasoline, while cities and counties are allocated 2.8 cents.

LB610, introduced by Papillion Sen. Jim Smith, would increase the tax allocated to the department by one-half cent per gallon annually for four years and cities and counties would see a one-cent increase.

Smith said the state has a backlog of road repairs estimated to cost hundreds of millions of dollars.

“Counties and cities are becoming more and more dependent upon property and wheel taxes to meet their needs,” he said. “We need a pay-as-you-go approach to fixing our ailing roads and bridges.”

Cities and counties would see increases of $4.2 million in FY2015-16, $16.9 million in FY2016-17, $29.6 million in FY2017-18 and $42.3 million in FY2018-19.

The proposed change to the fixed fuel tax would increase revenue to the department by $2.1 million in fiscal year 2015-16, $8.5 million in FY2016-17, $14.8 million in FY2017-18 and $21.2 million in FY2018-19.

Norfolk Sen. Jim Scheer supported the bill. He said that the state’s gas tax has not kept pace with the rise of more fuel-efficient vehicles.

“When we pay for the repair of roads on a per-gallon basis, then we’re not staying current,” Scheer said. “The vehicles still have the same wear and tear on the roads, but we’re taking in less money. If we’re going to continue to charge on a per-gallon basis, we need to address the fact that we’re driving more but buying less gas.”

Saying that tax relief should take priority, Sen. Tommy Garrett of Bellevue opposed the bill.

“We don’t fix our tax situation by increasing another tax,” he said. “We need to stop kicking the can down the road. I know bridges and roads need fixing, but number one on the priority list has to be taxes.”

Senators advanced the bill to select file on a 26-10 vote.