Heineman vetoes gas tax boost

The portion of the state budget that would have required a fuel tax increase of about a penny per gallon was vetoed Wednesday by Gov. Dave Heineman. It was the only veto he made in the budget plan passed by the Legislature last week. He signed the rest of the spending bills, along with a bill changing the state school aid formula. The school aid measure, LB988, will mean a smaller increase in growth in state aid for the 2008-09 school to help close an estimated $60 million gap between spending and expected state revenues.

Together, the budget and state aid changes mean state spending for the two-year budget period ending June 30, 2009, will total about $6.8 billion. That amounts to 4.6% average annual growth in state spending. Lawmakers passed a budget requiring an estimated 1.2 cents per gallon increase in the state motor fuel tax on July 1 as a way to maintain current funding for road construction. Heineman expressed appreciation for the Legislature’s willingness to look at the road funding challenges. But he did not agree with their solution.

State Sen. Deb Fischer of Valentine said that if lawmakers don’t override the veto, the governor’s action means that much less money will be available for road maintenance and construction. She said the state road-building budget already faces a crisis. Meanwhile, the governor voiced hope that U.S. Sen. Ben Nelson, D-Neb., and the rest of Nebraska’s congressional delegation, all Republicans, would be able to secure more federal dollars for the state’s road-building efforts.

Nebraska senators advance roads funding bill

A coalition of rural lawmakers won first-round approval Wednesday for legislation (LB846) that would create a new gasoline tax formula based on price rather than the amount sold. When combined with a previously approved budget increase for the Nebraska Department of Roads, the bill would result in an estimated 4.5 cent per gallon increase — 1.2 cents on July 1 and 3.3 cents Jan. 1.

The Roads Department budget would be increased by a little more than $30 million. “We have to have more money for roads — that is the purpose of this bill,” said State Sen. Deb Fischer of Valentine, sponsor of LB846. The new tax — a 5% excise tax on the average wholesale price of gasoline — was proposed to shore up Nebraska’s highway construction funds in the face of declining gasoline tax revenue, uncertain federal aid and skyrocketing costs for materials. Gov. Dave Heineman has said he opposes creating a new tax, preferring to first see whether the federal government will provide additional highway funds. But lawmakers rejected his budget proposal to use $15 million in general funds to tide the Roads Department over for one year. Fischer said Wednesday that she would support overriding the governor’s veto of either gas tax increase.

Lawmakers voted 27-12 to give first-round approval to the measure creating the new tax and 27-10 in favor of a second bill, LB 846A, authorizing the Roads Department to spend the $16 million generated in the first five months the new tax takes effect. Rural lawmakers dominated the group backing the increase.

Nebraska among states balking at road-work earmarks

rrod Haberman of Gering, Neb. has a “Field of Dreams” feeling about the Heartland Expressway in western Nebraska. If they build it, people and prosperity will come, he says. So Haberman, director of the Panhandle Area Development District, cheered when Nebraska lawmakers won a $21.5 million earmark for the expressway in a big 2005 federal highway bill. Nebraska Department of Roads officials aren’t so sure. “A road, in and of itself, is not going to build the economy for them,” says Roads Director John Craig.

The department is letting the earmarked money sit in the federal treasury, along with another $20 million for an eastern Nebraska expressway and several million dollars for an I-80 interchange near Kearney. Nationally, some other state roads departments aren’t using millions of dollars Congress earmarked for road and bridge projects in the five-year highway bill, says the American Association of State Highway and Transportation Officials. Why? States must kick in 20% matching funds, which some roads officials say they don’t have and don’t want to spend because they view Congress’ pet projects as “low priority” on their rankings of road-building needs.

In many cases, they say, the earmarked money covers only a fraction of a project’s total cost. These road wars over earmarks, inserted by lawmakers into bills to steer federal money to their states, are intensifying concerns about a looming highway-funding crisis. Soaring construction costs, limited state budgets, increased traffic and decaying roads are pushing federal and state officials to seek new ways of financing road work nationwide. And in Nebraska, roads officials increasingly have become skeptical of federal earmarks.

Congress’ fondness for earmarking highway bills undermines confidence in decisions made at the federal and state level, says a new report by the congressionally chartered National Surface Transportation Policy and Revenue Study Commission. Other roads departments in the Midwest, for the most part, aren’t throwing up roadblocks on earmarks. But Craig says widening 136 miles of the Heartland Expressway to four lanes from South Dakota to Scottsbluff would cost $272 million. So far, about 65 miles of the expressway has been built in Nebraska.

State Sen. LeRoy Louden of Ellsworth said much of the expressway could be built for far less initially as a “super two,” where a third passing lane would be added only on hills, and later expanded into a four-lane border-to-border roadway.

Nebraska-based U.P. praised for fuel-saving effort

A regional effort at publicizing ways to prevent pollution and reduce waste is recognizing Union Pacific Corp.’s fuel conservation training and rewards program for locomotive engineers. Looking at how trains operated, the railroad determined that the locomotive engineer was the main driver in saving or burning fuel.

In 2004, Union Pacific began a pilot program in North Platte, Neb., rewarding engineers with up to $100 in monthly fuel cards to gas up their own automobiles if they kept their diesel fuel usage below average for their territory. The Fuel Masters program has spread to 130 other crew locations across Union Pacific’s 23-state region, railroad officials said.

The effort has saved millions of gallons of diesel fuel, Union Pacific officials said. As Union Pacific has proven, going green can save a lot of money,” said Paul McMeekin, a graduate assistant at UNO’s College of Business, which is involved in the awareness program. The Pollution Prevention Regional Information Center (P2RIC) is operated by the Nebraska Business Development Center at UNO.

The center is working to improve the way businesses and agencies in Iowa, Kansas, Missouri and Nebraska share environmentally sound programs.

State Sen. Janssen plans to recharge U.S. 30

Nebraska Sen. Ray Janssen wants to get a local highway project back on course. On Thursday morning, Janssen, who represents all of Dodge County, along with State Sen. Joel Johnson of Kearney and Speaker Mike Flood of Norfolk, announced a plan to get work moving again on the U.S. Highway 30 expressway project to expand the highway to four lanes from Fremont to Schuyler, where it already has been expanded west.

The planned Nebraska expressway system would give all of the state’s larger communities a four-lane connection to the national interstate system and connect many of the larger communities with four-lane roadways. Janssen said it would cost about $73 million to finish the Fremont-to-Schuyler expansion of U.S. 30. Janssen said the biggest reason for the slowed — all but halted — highway projects is the slowing economy has reduced the state’s highway project funds. “We’re proposing that we use the $75 million the governor wants to use for property tax relief,” Janssen said. “We want to use that.”

Johnson has proposed a bill that would do just that: LB1139. “There’s time to get this through during this session,” Janssen said. Gov. Dave Heineman said he doesn’t like the idea. “I won’t support stealing from the property tax relief,” the governor said. “We need to look at the long-term challenges of highway funding.” Janssen said he isn’t sure if there is enough support in the Legislature to override a governor’s veto.

State senators push for completion of expressway system

Lawmakers from across Nebraska are pushing for the state to finish off an expressway system that has been in the works for two decades. Led by Sen. Mike flood of Norfolk, they held a news conference Thursday asking that the state complete links in the four-lane system designed to connect midsize cities with Interstate 80.

Unfinished links include U.S. 275 between Omaha and Norfolk; U.S. 81 between Columbus and York; U.S. 75 between Bellevue and Nebraska City; U.S. 30 between Schuyler and Fremont; U.S. 77 between Wahoo and Fremont; Nebraska 2 near Lincoln; and Nebraska 71 from I-80 to north of Kimball. Under one bill (LB771) from Sen. Tim Gay, $50 million from the state’s reserve fund would be used to help complete the roads.

Nebraska roads’ funding bill advances

A bill that could lead to an increase in Nebraska’s fuel tax will be debated by the full Legislature this session. The Revenue Committee on Wednesday voted 6-1 to send the bill (LB846) to the full Legislature. Sen. Deb Fischer of Valentine, chairman of the Transportation and Telecommunications Committee, introduced the gas tax change as a way to make more money available for road construction and to tie a portion of the state’s gas tax to the rising price of fuel. Based on current fuel prices, the change would add about 3 cents to the state’s 23-cent-per-gallon fuel tax, according to estimates. The fixed per-gallon portion of the state’s gas tax would be reduced by 8 cents, lowering it from 12.5 cents to 4.5 cents.

In exchange, there would be a new tax based on the wholesale price of fuel. The tax would be set twice a year, based on a formula taxing fuel at 5% of the wholesale price of fuel. The excise portion of the tax would rise as the price of fuel goes up. It is expected to add about 3.3 cents per gallon to the fuel tax next year and 4.2 cents in 2011. It would also bring in an estimated additional $38 million for roads during the first 12 months.

Senators have been looking for ways to increase funding of road construction and maintenance because of the rising cost of construction material and a predicted drop in federal funding for roads.

Ethanol a boon to Nebraska’s rural economy

Ethanol production is creating thousands of jobs to sustain rural communities in Iowa and Nebraska, economists in both states reported this week.  A typical 100 million gallon refinery in Nebraska creates 113 jobs and adds $1.3 million a year in retail sales for the trade area, based on studies by Donis Petersan, a senior economist with Nebraska Public Power District.  In late 2007, NPPD estimated that the ethanol industry had added 700 permanent jobs in Nebraska with average salaries of $49,000. In addition, about 1,500 jobs were created in related industries and increased economic activity.

Funding crisis severely restricts Nebraska highway construction

After two decades and $1.2 billion spent, Nebraska’s ambitious 600-mile plan for four-lane expressways linking cities of 15,000 or more to Interstate 80 remains unfinished.  Galloping construction costs, falling gasoline tax revenue and expected reductions in federal highway aid have made road construction one of the top issues facing state lawmakers during the 2008 session.  Nebraska lawmakers have introduced several bills to get more money to the Department of Roads, including fuel tax increases, a new excise tax on the wholesale price of gasoline and even a shift of motor vehicle taxes from schools. 

The expressway system is about two-thirds completed. The remaining seven segments of the 1988 plan, plus four additional expressway proposals developed later, will be evaluated and undertaken as needed, based on safety, pavement condition and traffic counts.   It will be at least 2014 before construction is even considered on most of the projects. The estimated cost to complete the expressways is nearly $1.3 billion. 

Legislative Speaker Mike Flood of Norfolk has gathered 11 co-sponsors — all have expressway segments in their districts — for his bill requiring state officials to consider the economic development impact of the expressway system.  With road funding now at a crossroads, roads officials have been directed to make preserving the state’s existing 10,000 miles of roadways and bridges top priority.  System preservation alone will cost the state an estimated $170 million per year.

Nebraska auto registration bill given more time

A state senator who wants to allow Nebraskans to license and register their new cars at the dealerships where they buy them was given more time Tuesday to work on the proposal.  Some members of the Legislature’s Transportation Committee wanted to kill LB709, introduced by Sen. Rich Pahls of Omaha. 

Then Pahls spoke to Sen. Deb Fischer of Valentine, the committee chairwoman, giving her the results of an online survey on The World-Herald’s Web site.  The unscientific poll showed nearly three-fourths of the respondents in favor of the Pahls plan.  After learning of the numbers, Fischer said she would continue discussing the idea with Pahls. 

In a public hearing Monday, several county officials, including a lobbyist for Sarpy County, testified that the measure would be too difficult to do in Nebraska.  Proponents said none of those problems is insurmountable. The program would be voluntary.  Dealers would not issue car titles — that would continue to be a function of the county clerk.