NEBRASKA LEGISLATURE

LINCOLN — Business, industry and agriculture groups lined up Tuesday to support the governor's plan to create a new fund for state highway construction and county bridge repair.

The Legislature's Appropriations Committee heard three hours of testimony for a bill that would create a transportation infrastructure bank. Legislative Bill 960 also would allow roads officials to use new contracting methods intended to save money and shave several years off the timeline for major construction projects.

Gov. Pete Ricketts ran into significant opposition during recent legislative hearings on his property tax proposals. But his major roads bill — which could ultimately spend up to $300 million on transportation projects — has the strong backing of Omaha Mayor Jean Stothert, the Nebraska Chamber of Commerce and Industry, the Nebraska Farm Bureau and groups representing local governments, contractors, construction firms and design engineers.

Some lawmakers on the committee raised questions about the potential economic returns of more roads spending. And one person who testified suggested that a $150 million transfer from the cash reserve fund to capitalize the infrastructure bank could leave the state more vulnerable to an economic recession.

But supporters said starting an infrastructure bank would be a worthy way to spend some of the roughly $730 million in the state's rainy day fund.

As the cash reserve money is spent on roads projects, the bill requires the infrastructure bank to be replenished with gas-tax revenue and federal funds to complete additional projects. The fund would expire in 2033.

The goals of the fund would be to complete the state's four-lane expressway system, provide matching grants so counties can repair deficient bridges and target transportation enhancements for economic development.

"Please help us jump-start the economy," said Doug Leafgreen of Gering, a member of the Nebraska Highway Commission.

Communities including Scottsbluff, York and Norfolk have been waiting decades for the completion of expressways that would connect their towns to Interstate 80. Such transportation corridors are critical for attracting new industry, and they have been demonstrated to reduce the number of fatal crashes, said Dirk Peterson, vice president and general manager of Nucor Steel in Norfolk.

"We have failed the citizens of this state by failing to finish the expressway system," he said. "We have failed to protect and promote public safety."

But Tiffany Joekel, policy director at Open Sky Policy Institute, a Lincoln-based think tank, raised concern about the cash reserve transfer.

The Legislative Fiscal Office recommends maintaining a cash reserve balance equal to 16 percent of annual net revenue, which would be roughly $746 million, Joekel said.

If committee members approve cash reserve transfers contained in their preliminary budget, along with the transfers requested by the governor for roads and new prison beds, the balance in the fund would fall to less than 11 percent of net revenue.

Sen. Heath Mello of Omaha, the committee chairman, also has expressed misgivings about using so much of the cash reserve. He has said he would be more comfortable with a transfer of $50 million or less. Contact the writer: 402-473-9587, joe.duggan@owh.com

"We have failed the citizens of this state by failing to finish the expressway system. We have failed to protect and promote public safety."

Dirk Peterson, Nucor Steel vice president and general manager

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