January 07, 2016 4:00 pm •
Paving the way for another big boost in spending on Nebraska roads, Gov. Pete Ricketts and key lawmakers unveiled plans to pull up to $150 million from the state’s rainy-day fund to pay for highway construction and related work.
The move would establish a “transportation infrastructure bank,” a state fund to provide up-front money for major highway projects that might otherwise take years longer to complete.
“We need to grow Nebraska, and of course our infrastructure is vital to that,” Ricketts said during a Thursday news conference at the Capitol.
State Sen. Jim Smith of Papillion, chairman of the Legislature’s Transportation and Telecommunications Committee, will formally propose the changes next Thursday following the governor’s annual State of the State address.
Most of the money would go toward major projects like finishing Nebraska’s expressway system, but some would be set aside to help local governments with bridge work and updates that help attract and support new or expanding businesses.
The $150 million transfer from the state’s cash reserve would be phased in over time as projects become ready.
Some in the Legislature quickly raised concern about the price tag.
“This is flat-out an irresponsible proposal” given the state’s financial situation, said Appropriations Committee Chairman Heath Mello of Omaha.
Money from the state’s $728 million cash reserve might already be needed this year to plug a $110 million budget shortfall, pay for a $26 million prison expansion and cover other unexpected costs.
Mello said he supports the general concept of an infrastructure bank to boost roads funding, but opposes “earmarking” the cash reserve to do so and will fight to have the bill heard by his committee instead of Smith’s Transportation Committee.
Meanwhile the deal brings Ricketts into the fold with roads boosters a year after he came out against raising the state’s gas tax by 6 cents per gallon. That effort, championed by Smith and passed over the governor’s veto in 2015, is expected to boost roads funding by $76 million a year once fully implemented.
Lawmakers also carved out a quarter-cent of the state sales tax in 2011 to provide about $70 million a year for highway improvements.
Omaha Sen. Bob Krist on Wednesday proposed eliminating that law, the Build Nebraska Act. He questioned its necessity given the gas tax increase and the new infrastructure bank proposal — especially since Ricketts opposed the gas tax hike to begin with.
“The administration didn’t want any money to build roads,” Krist said.
Smith said the money was and is needed “above and beyond” what the state was already spending on roads. An infrastructure bank would give road builders an advance on the Build Nebraska Act and gas tax revenue, allowing projects to begin sooner, he said.
“I’m very, very excited about it,” said Dirk Petersen, vice president and general manager at Nucor Steel in Norfolk.
His community is pressing hard for a four-lane expressway to connect Norfolk with Omaha, and Petersen thanked Ricketts for working with lawmakers and others on a proposal that could hasten the project.
“That’s what leaders do,” he said.
Sen. John Stinner of Gering, whose legislative district includes portions of the still-incomplete Heartland Expressway, said he was “tickled with the governor” for supporting the proposal.
Stinner sits on the Appropriations Committee and acknowledged $150 million would be a “heavy lift.” But, he said, “We’re going to tee it up and see what happens. … I think things positively could be done.”
Smith’s legislation will also propose changes to how the Nebraska Department of Roads interacts with contractors. Those too are intended to speed road and bridge work, state Roads Director Kyle Schneweis said during Thursday’s news conference.
One change would let the Roads Department to bid projects all at once for design and construction, rather than seeking bids on construction only after engineering work is complete.
Another change would allow the state to hire private construction managers to help with preliminary design and project oversight.
Forty-seven states can currently use one or both of those “tools” for transportation-related projects, Schneweis said.
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