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Gas tax increase in Nebraska bucks trend(Omaha World-Herald (NE) (KRT) Via Acquire Media NewsEdge) Jun. 23--LINCOLN -- At a time when some public officials have called for suspending gas taxes to give motorists a break on high gasoline prices, Nebraska is among a handful of states raising gas taxes this year. Nebraska will add 3 cents of tax per gallon July 1. The new Nebraska rate of 26.9 cents will rank 20th in the nation; the national average for state gas taxes is 25.6 cents. Motorists on average pay 44 cents per gallon in taxes when factoring in the federal gas tax. Iowa also will see a gas tax increase, from 20.7 cents per gallon to 21 cents per gallon July 1, but that hike is an automatic adjustment designed to encourage ethanol use, not to generate more highway dollars, said Dena Gray-Fisher, a spokeswoman for the Iowa Department of Transportation. Nebraska's gas tax is higher than those levied by its neighbors, some of which have not raised fuel taxes for nearly two decades. Motorists fueling up in Lincoln last week seemed resigned to the tax increase. "Sure, it bothers me, but everything else is going up. I don't know why gas (taxes) would be any different," said John Knight, who was fueling a delivery truck for a manufacturing company that employs him. Knight said he is somewhat consoled that gas tax dollars are used for road construction. "At least that's doing something (with the money)," he said. "You've got to work on roads." To some, it may seem foolhardy to raise gas taxes when consumers already are upset about high gas prices. Indeed, Nebraska is on a short list of states that have decided to raise their fuel tax so far this year. The others are Iowa, Minnesota, Indiana, Kentucky, Georgia, Maine and Washington, said Teresa Dondlinger Trissell, senior tax counsel for the American Petroleum Institute. Despite all the talk of suspending gas taxes, no states have done so this year. "State legislators recognize (it would) do more harm than good," said Nicholas Farber, a research analyst with the National Conference of State Legislatures in Denver. "By reducing the amount of money coming into the state, they're reducing the amount of money available to repair roads and reducing the number of jobs for people who repair roads." As fuel prices go up, fuel consumption goes down and with it, the revenue that states use for highway maintenance. But efforts to raise gas tax rates to compensate further depresses consumption and draws hostility from taxpayers already straining to pay higher gas costs. "The biggest misconception we come across in Colorado is that people think that because gas prices go up, our revenue goes up," said Heather Copp, chief financial officer for the Colorado Department of Transportation. Colorado's gas tax has been set at 22 cents per gallon since 1991. All 50 states earmark an excise tax on gasoline for road construction. Most are based on the number of gallons sold. In Nebraska, gasoline taxes provide about 40 percent of state road construction spending. About 20 percent comes from other state sources. The remainder is from federal highway aid, generated by the federal tax of 18.4 cents per gallon and distributed by formula among the states. However, the federal government faces a $3.3 billion deficit in the highway trust fund and could cut aid by 34 percent. John Horsley, executive director of the American Association of State Highway and Transportation Officials, recently said nearly 380,000 jobs -- from factory workers who make construction materials to engineers and architects -- could be lost if Congress does not maintain federal highway funding. Minnesota, where 13 people were killed in an Interstate bridge collapse last August, enacted a gas tax increase this year over the governor's veto. The tax will rise by 8.5 cents over five years, with a 2-cent increase having already taken effect. Some of Nebraska's neighboring states are struggling to find ways to boost road construction funding. Wyoming, with a 14-cent gas tax that is the second-lowest in the nation, "is very resistant to increasing gas taxes," said Sharon Gostovich, a spokeswoman for the Wyoming Department of Transpiration. "A proposal to raise the tax 10 cents over three years, considered earlier this year, not only failed, but it failed seriously." In Kansas, the fuel tax was last increased, to 24 cents, during a budget crunch in 2002, said Transportation Department spokesman Steve Swartz. New funding sources will be under consideration next year. "We're starting to get more concerned all the time," Swartz said. "But it's a politically difficult time to raise the gas tax." South Dakota's 22-cent per gallon rate has been in place since 1999. Kevin Tveidt, deputy secretary of the state's Department of Transportation, said South Dakota has begun to consider either raising gas taxes or finding other ways to increase road dollars. "South Dakota has gone into preservation mode," he said. "We're trying to preserve the highways and bridges we have now." --Contact the writer: 402-473-9581, [email protected] To see more of the Omaha World-Herald, or to subscribe to the newspaper, go to http://www.omaha.com. Copyright (c) 2008, Omaha World-Herald, Neb. Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |