Senators override veto; fuel tax increased

Senators successfully overrode a veto May 14 of a bill that increases 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, increases the tax allocated to the department by one-half cent per gallon annually for four years and to cities and counties by one cent.

The bill passed May 7 on a 26-15 vote, one vote more than the minimum needed for passage. It immediately was vetoed by Gov. Pete Ricketts.

In his veto letter to the Legislature, Ricketts said that LB610 would increase the state’s gas tax by 23 percent, giving Nebraska the 16th highest gas tax rate in the country and surpassing the national average.

He recommended that the state look for more creative and innovative ways to address roads funding issues.

“Last week, I appointed a new director of the department,” Ricketts wrote. “I intentionally selected a forward-thinking leader who will take a fresh approach to our state’s road construction needs. This is an area that is vital to our continued economic growth. I cannot, however, support raising taxes as the first solution to this issue.”

The increase to cities and counties totals $4.2 million for fiscal year 2015-16, $16.9 million for FY2016-17, $29.6 million for FY2017-18 and $42.3 million for FY2018-19.

The increase to the department totals $2.1 million for FY2015-16, $8.5 million for FY2016-17, $14.8 million for FY2017-18 and $21.2 million for FY2018-19.

Smith introduced a motion to override the governor’s veto, saying that waiting is not an effective strategy to address the problem of delayed roads projects.

“I’m excited to work with the new director and hear his innovative ideas; however, it’s unrealistic to expect such gains to make up for the hundreds of millions of dollars needed to catch up [with the backlog of projects],” he said. “It’s also important to remember that the new director will have no jurisdiction over city and county projects. The funding needs are massive and our communities are desperate for our help now.”

Sen. Curt Friesen of Henderson supported the override motion. He said there is a cost to taking no action.

“When we have deficient roads and bridges that wash out in a major storm like the one we just had, we have emergency costs that go above and beyond normal replacement costs,” Friesen said. “We can continue to let our roads and bridges deteriorate and the cost to replace them will just go up [in the future].”

Sen. Beau McCoy of Omaha opposed the motion, saying that good tax policy never includes raising taxes.

“This hits low-income and working Nebraska families harder than anything else. It’s a knee-jerk reaction to the problem and it won’t even solve the problem,” he said.

Senators voted 30-16 to override the governor’s veto. Thirty votes were needed.