FUEL VETO OVERRIDE

Dear Claude,

Thank you for the email regarding LB 846. Glad to hear you have returned from your travels.

This is not an issue I take lightly. I understand that the gas tax affects every one of our citizens. However, as chair of the Transportation & Telecommunications Committee, I was charged by my colleagues last session with finding a solution to our roads funding problem. This problem is bordering on a crisis. We are estimated to be $330 million per year short of meeting our needs over the next twenty years. Next year the Department of Roads will have no money for new construction except for the widening of I-80 between Lincoln and Omaha and a Missouri River bridge project in Omaha. The rest of the state is left with nothing. This is not just a serious problem in Nebraska; every state is facing a funding crisis and no help is forthcoming from the federal government. We began to work on the problem a year ago and have been studying what other states are doing and the various options available to us.

What we found out was that Nebraska is very unique in how we fund our roads. Our highway revenue comes almost entirely from three user fees: the gas tax, sales tax on motor vehicles, and motor vehicle registration fees. That is very rare among the states because a lot of them use their general funds (competition with every other state program for the dollars), they bond and have racked up huge amounts of debt, they use toll roads, or they sell off parts of their roads to private entities -- in addition to having a gas tax. We don't do that here, and Nebraska is 25th in gas tax rankings. I wanted to make sure any new solution fit our current system because it is the fairest way possible to fund our roads. With the gas tax, those who use the roads pay for the roads. That includes out of state residents and commercial truck traffic that pass through our state.

If we don't increase the gas tax revenue, counties will have to increase property taxes to maintain their roads, or let maintenence suffer, because a portion of that gas tax goes to local governments. Counties receive 23 1/3% of our current state gas tax in order to help maintain their many miles of county roads and bridges. A county increase for road maintenence due to a decline in state revenue will affect property taxes that go to support schools and other local political subdivisions in your county. I opposed LB 988, Senator Raikes' school finance bill, because of cuts in funding, not just this year but in future years, to the school districts in our area and the corresponding increases we will see in property taxes just to sustain our schools. If we do not step up with revenue for roads, I believe we could see an increase in property taxes for county road maintenence. LB 846 keeps the state's long standing policy in place of funding our roads through user fees.

If we don't increase the fuel tax, we will certainly see competition for those property tax dollars at the local level and competition for General Funds at the state level for maintaining and constructing roads. That cuts into our funding for education and other state responsibilities. We must take a broader look at the fuel tax and realize that if we don't increase user fees to pay for roads, other priorities in our state, like education and care for the severely disabled, will suffer. In short, we don't need highway funding to compete for existing dollars with schools, public safety, Medicaid, the universities, and public corrections.

The gas tax was lowered 4 cents on January 1st but that was not passed on at the pump. The gas tax is currently 23 cents and has not changed since January 1st, and yet we have seen wild fluctuations in the price at the pump. I would propose to you that the gas tax is not responsible for the price increases in gas that we have experienced over the past 3 months. I drive about 35,000 miles a year, which means that if the "A" bill to LB 846 would pass, I could possibly pay about $60.00 more a year in gas taxes. I cannot say I am happy about this, but I would rather support this proposal than have my property taxes increased or take sales and income tax revenue from the General Fund and possibly have to cut state aid to schools or raise sales and income taxes in order to pay for roads.

Roads are expensive to build and maintain, but I think we all realize their vital importance, especially in our rural areas. Even though it was a difficult bill for me to introduce, LB 846 was the best solution I found, and I felt it was the right thing to do in the wake of our widening funding shortfall. Government is responsible for public safety and infrastructure, and I take that responsiblility seriously. It would have been much easier to advocate bonding (and let somebody else worry about how to pay off those bonds in the future) or try to raid the general fund or put off the decision by suggesting another highway funding study, but I was sent down here by my constituents to make the tough decisions.

Thank you for taking the time to contact me on this important issue.

Sincerely,

Deb Fischer

Senator, District 43