Veto of budget's fuel tax could be bad news for further hikes
Posted: Thursday, April 03, 2008
LINCOLN, Neb. (AP) -- Gov. Dave Heineman vetoed a funding increase for the state Department of Roads that could have raised the fuel tax by about 1 cent per gallon.
"Now is not the time to increase the gas tax," Heineman said, noting that gas and diesel prices are hitting record highs while the cost of food and health care soar.
The line-item veto in the state budget doesn't bode well for a plan by the Legislature that could hike the fuel tax by an additional 3.3 cents per gallon. The bill (LB846) won second-round approval Tuesday, but didn't get enough votes to override a possible veto.
Heineman would not say Wednesday whether he would veto the bill. He said he still holds out cautious hope that the federal government will come through with money for roads.
"The issue's not going to go away. I understand that," Heineman said.
But Sen. Deb Fischer of Valentine said the federal money's not coming, and the state needs to act in a "crisis" situation.
Supporters of both fuel tax proposals say the increase is needed to help build and maintain roads.
Fischer said she expects Heineman will likely veto a spending measure attached to the bill that changes how fuel is taxed. The measure sets how much the Legislature will appropriate for roads and is what would cause the fuel tax to increase.
But Fischer said she hopes Heineman will leave the main bill intact. It changes how fuel is taxed, and was proposed because revenue under the current fuel tax is expected to remain flat and hasn't kept up with inflation.
The bill would enact a new 5 percent tax on the wholesale price of fuel, collected when the fuel is sold to retail stations.
Currently, there is a per-gallon tax that is only based on how much fuel is sold, not the price. The bill would maintain the fixed portion of the tax but reduce it by 8 cents per gallon.
The bill would not change what is known as the variable portion of the current per-gallon tax. It fluctuates to ensure the state collects no more, and no less, for roads than what has been budgeted.
Despite the decrease in the fixed tax proposed in the bill, the wholesale tax would create a larger overall revenue stream for the state.
Sen. Philip Erdman of Bayard had suggested taking money from the general fund instead of raising the fuel tax. But he won little support for his amendment Tuesday, which was defeated.
"The members of the Legislature have voted four times to raise the gas tax," Erdman said. "I hope they have the votes (to override a veto) for the sake of Nebraska roads."
The veto was the only change the governor made to the state budget.
The state is in the middle of a two-year budget cycle, so lawmakers didn't mold a new budget this session. Instead they approved changes to the existing budget.
The total, two-year budget is about $6.8 billion.
On the Net:
Nebraska Legislature: http://www.nebraskalegislature.gov
"Now is not the time to increase the gas tax," Heineman said, noting that gas and diesel prices are hitting record highs while the cost of food and health care soar.
The line-item veto in the state budget doesn't bode well for a plan by the Legislature that could hike the fuel tax by an additional 3.3 cents per gallon. The bill (LB846) won second-round approval Tuesday, but didn't get enough votes to override a possible veto.
Heineman would not say Wednesday whether he would veto the bill. He said he still holds out cautious hope that the federal government will come through with money for roads.
"The issue's not going to go away. I understand that," Heineman said.
But Sen. Deb Fischer of Valentine said the federal money's not coming, and the state needs to act in a "crisis" situation.
Supporters of both fuel tax proposals say the increase is needed to help build and maintain roads.
Fischer said she expects Heineman will likely veto a spending measure attached to the bill that changes how fuel is taxed. The measure sets how much the Legislature will appropriate for roads and is what would cause the fuel tax to increase.
But Fischer said she hopes Heineman will leave the main bill intact. It changes how fuel is taxed, and was proposed because revenue under the current fuel tax is expected to remain flat and hasn't kept up with inflation.
The bill would enact a new 5 percent tax on the wholesale price of fuel, collected when the fuel is sold to retail stations.
Currently, there is a per-gallon tax that is only based on how much fuel is sold, not the price. The bill would maintain the fixed portion of the tax but reduce it by 8 cents per gallon.
The bill would not change what is known as the variable portion of the current per-gallon tax. It fluctuates to ensure the state collects no more, and no less, for roads than what has been budgeted.
Despite the decrease in the fixed tax proposed in the bill, the wholesale tax would create a larger overall revenue stream for the state.
Sen. Philip Erdman of Bayard had suggested taking money from the general fund instead of raising the fuel tax. But he won little support for his amendment Tuesday, which was defeated.
"The members of the Legislature have voted four times to raise the gas tax," Erdman said. "I hope they have the votes (to override a veto) for the sake of Nebraska roads."
The veto was the only change the governor made to the state budget.
The state is in the middle of a two-year budget cycle, so lawmakers didn't mold a new budget this session. Instead they approved changes to the existing budget.
The total, two-year budget is about $6.8 billion.
On the Net:
Nebraska Legislature: http://www.nebraskalegislature.gov
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