Nebraska gas tax will rise 1.6 cents a gallon at start of next year

Nebraska gas tax will rise 1.6 cents a gallon at start of next year
World-Herald News Service

LINCOLN — Nebraska drivers will pay the highest gas tax in the state’s history in the new year.

Nebraska Department of Revenue officials announced Friday that the motor fuel tax is set to rise 1.6 cents per gallon, up to 29.6 cents, on Jan. 1. The new rate will be in effect until June 30.

Tax Commissioner Tony Fulton said most of the increase can be traced to legislation passed in 2015. The rest is determined using a formula based on wholesale gasoline prices and the state road budget.

“A lot of this is on cruise control,” Fulton said. “It’s the appropriation that sets it.”

Legislative Bill 610, passed despite a veto by Gov. Pete Ricketts in 2015, phased in a gas tax increase of 6 cents per gallon.

Backers pushed for the increase to help address a backlog of road repairs that ran into the hundreds of millions of dollars. Two cents of the increase was directed to the state, while cities got two cents and counties the remaining two.

The bill provided for a 1.5-cent hike each year for four years. The coming year marks the last of the increases.

After the tax hikes were approved, Ricketts pushed for a law directing the proceeds into a $450 million highway construction program. The program includes expressway construction, county bridge repair and transportation-related economic development projects.

Nebraska’s lowest gas tax in recent years was 22.8 cents, which was in effect in spring 1998 and again in the first half of 1999.

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