Nebraska Lawmakers Approve Steep Gas Tax Hike Over Governor’s Veto

Published June 9, 2015

Nebraska lawmakers overrode Gov. Pete Ricketts’ (R) veto of a proposed gasoline tax hike, increasing the state’s gas tax from $0.256 per gallon to $0.316, a 23.4 percent increase. Once the tax hike is fully phased in, Nebraskans will pay more than $0.51 in state and federal taxes on each gallon of gasoline purchased. 

Nebraska Taxpayers for Freedom President Douglas Kagan says the state should reduce wasteful transportation spending before hiking taxes.

“The governor is in the process of appointing a new head of the Department of Roads, here in Nebraska, to then allow him to find a way and make suggestions for financing the repair of our bridges and roads,” he said. “Our Department of Roads has one of the highest overhead and labor costs. Instead of raising the gas tax, the Roads Department should outsource and privatize some of the construction.

“In Nebraska, some of the road construction has been less than satisfactory, and they’ve had to go back and do work over again,” Kagan said. “This is why we would like a lot of the work outsourced.”

Sending Taxpayers ‘Reeling’

Kagan says the new taxes will squeeze Nebraskans’ wallets at the gas pump

“All those taxes will now go into effect, and we are reeling because of it,” he said.

Portland State University Professor of Urban Studies and Planning Anthony Rufolo says congressional mismanagement of the National Highway Trust Fund (NHTF) is hurting states’ ability to finance road construction through traditional means such as gas taxes.

More than 50 percent of Nebraska’s money for road construction comes from NHTF funds. 

“At the federal level, the Trust Fund has basically gone bankrupt,” he said. “Congress’s budgeting far exceeds revenue. States now have to proceed far more carefully in getting their own revenue.”

Draining the Fund

Rufalo says federal diversion of NHTF money away from road construction is the cause of federal transportation funding woes.

“The big drain on the Highway Trust Fund is the money that goes to public transit,” he said. “It has ceased being based on a user charge and has funded projects that have nothing to do with maintaining and building our roads,” Rufolo said.

“We have moved from what used to be a pay-as-you-go system, where the money coming in funded construction for this year, to a finance system where more and more of the revenue is being bonded out, and that means that you get to build some things in the near term but more and more of your revenue in the future is dedicated to paying the interest and principal on these bonds that you’ve issued.,” he said.

Jen Kuznicki ([email protected]) writes from Hawks, Michigan.

Internet Info:

Robert Poole, “Ten Reasons Why Per-Mile Tolling Is a Better Highway User Fee than Fuel Taxes,” Reason Foundation: