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Nebraska inches closer to gas tax hike

By Nancy Hicks
Lincoln Journal Star

LINCOLN – Nebraska's fuel tax will creep up, 0.1 cents per gallon to help pay for the city buses and rural handivan programs under a measure that received second-round approval this week.

The average Nebraska driver, on the road for about 12,000 miles a year, will pay an extra 60 cents a year, according to Steve Maraman, controller for the Department of Roads.

The measure, part of the budget package, is a new way to fund the state's share of public transportation. It is also part of Omaha Sen. Lowen Kruse's plan (LB1144) to establish a process for assessing public transportation needs.

Currently the $1.5 million spent on public transportation - small subsidies for Lincoln and Omaha bus services and grants to the 61 rural handivan programs - comes from three areas: income taxes, sales taxes and the fuel tax.

Under the Kruse proposal, all the state funding for public transportation will come from the variable fuel tax. The current $1.5 million budget would require an increase of that tax of about 0.1 cents.

The new funding process will allow the Legislature to make decisions on public transportation funding separately from the massive road construction budget, according to Kruse.

Future funding likely will be based on a study of public transportation that will establish citizen needs across the state and allow the Lincoln and Omaha bus systems to talk about their future.

SRI Consulting Group Inc. of Minneapolis will conduct the yearlong study that will include several public meetings and random telephone surveys of 12,000 Nebraskans, according to Ellis Tompkins, rail and public transportation engineer for the Roads Department.

"We are heading into problems with the public transit system, and it's time to talk about the whole thing," Kruse said. The new planning process "could set policies that will help the elderly and handicapped citizens for decades to come," he said.

Though the road-building industry traditionally opposes any changes in the fuel tax system, that lobby is not opposing the measure. Philosophically, the proposal makes sense because at the federal level the fuel tax is tied to public transit funding, said Terry King, executive director of the Nebraska Chapter of the Associated General Contractors of America.

In addition, the new system is structured so that it doesn't use any money earmarked for road construction or maintenance.

The state's fuel tax is split, with a 12.5-cents-per-gallon fixed tax and a 12.3-cents-per-gallon variable tax. The fixed tax remains the same year after year, unless changed by state law. The variable tax fluctuates and is used to make sure the Roads Department collects enough money for the road-building budget set by the Legislature.

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