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McCook Gazette

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Editorial

Pay-as-you-go system for roads should be retained

Thursday, March 13, 2014

"Neither a borrower nor a lender be; For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry."

It was good advice when Polonius gave it to his son, Laertes, in William Shakespeare's "Hamlet" and it's still good advice for the Legislature today.

Opponents filibustered a bill that would allow the state to borrow up to $200 million for roads projects at a 5 percent interest rate, but lawmakers are expected to take up the issue again next week.

We've always admired the way financing of highways works in the State of Nebraska. Drive more, buy more gasoline, pay more taxes to repair the highways you wear out while burning the gasoline.

Hybrid, electric and more efficient conventional cars have eroded that tax base, but the basic idea is still valid.

Nebraska has always been forced to adopt a balanced state budget, and borrowing money for any purpose, roads included, undermines the state's financial integrity as well.

Proponents, including chambers of commerce, cities, counties and construction companies, point to historically low interest rates and the delays in many needed roads projects as reasons to allow the bonds to be issued.

Construction costs are likely to grow faster than the 5 percent (maximum) per year the state would pay in interest, cities and counties already use bonds to pay for roads, and the state did so as well, back in 1968 when federal funds were delayed.

It's worthy of note that the Nebraska Department of Roads is against the bill, saying there aren't enough projects ready to go, even if the money were available.

"You're going to borrow money you don't need, so you can pay 2 percent interest on it," Sen. Ernie Chambers of Omaha observed.

Sen. Tom Hansen of North Platte worries the bill, LB1092, would open the door to more irresponsible borrowing, by simply altering the limits in the bill. Senators replacing term-limited colleagues in the future might not understand the reasoning behind the bill.

The roads system was already altered three years ago, when Nebraska began diverting $60 million to $70 million a year in sales tax revenue into roads projects, in response to that tax-base erosion mentioned above.

Nebraska's capitol building, one of the nation's most remarkable, was built on a pay-as-you-go basis, taking from 1922 to 1932 to complete.

The system has served the state well over the years, and should not be abandoned today.

Let's hope the pay-as-you-go camp prevails.

Comments
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  • Buyers of hybrid and electric cars should pay an extra tax when bought and the money to go to roads.

    -- Posted by dennis on Thu, Mar 13, 2014, at 6:39 PM

  • I should be hard here on Dennis - but I have to let it go. Why bother a government man about his perchance for letting no one escape the governments grasp.

    -- Posted by bob s on Fri, Mar 14, 2014, at 10:17 PM

  • Bob s just saying if you drive on a road or use a road to get your food delivered then you should help pay for the road

    -- Posted by dennis on Sat, Mar 15, 2014, at 2:07 PM

  • If you are going to charge an extra tax for "green" vehicles, you are going to take away the incentive of the purchase of such.

    -- Posted by quick13 on Sat, Mar 15, 2014, at 3:53 PM

  • If they do not help for pay for the roads they drive on, how does the state pay for the roads?

    -- Posted by dennis on Sat, Mar 15, 2014, at 5:50 PM

  • If less fuel is being used then you up the fuel tax....and upgrade the requirements for the construction of roads. Our road construction minimums are lower than they could be thus our roads need more maintenance than other states/entities. For example when they were putting the new paving on red willow dam I inquired about having my driveway paved by the same contractors while they were in the area. The foreman told me that they would if they had time and that it would be a lot better than the highway paving because the Bureau of Reclamation had a much higher standard than the state. I can't imagine that it would cost much more.

    -- Posted by quick13 on Sat, Mar 15, 2014, at 10:35 PM

  • Except electric cars and hybrids would use less or no fuel and still drive on the roads....unless the fuel tax was just raised on electric and hybrids.

    -- Posted by dennis on Sun, Mar 16, 2014, at 1:43 PM

  • That is a good point Dennis, but we need to remember that the entry price for electrics and hybrids are a good deal more than a standard car. Using your logic, a person who drives a moped should pay extra because he is not using as much fuel as Hummer.

    -- Posted by quick13 on Mon, Mar 17, 2014, at 9:53 PM

  • Hybrids already pay for the roads with the fuel tax. A 2013 Chevy Silverado Hybrid gets 20 mpg in town and 23 mpg on the highway. I don't think people should be punished for increased fuel efficiency. My car gets 25 mpg in town and 29 mpg on the highway but nobody is proposing a tax on my car. Every car is using less fuel and they will continue to use less fuel as technology in fuel efficiency increases. If your worry is reduced fuel sales, tunnel vision on hybrids and electric vehicles won't help the problem.

    -- Posted by Aaron Kircher on Tue, Mar 18, 2014, at 3:49 PM

  • Lets not pick on Dennis. Clearly the solution to highway funding is to use the tax code to pit motorists against each other.

    -- Posted by shallal on Tue, Mar 18, 2014, at 8:37 PM

  • What do all vehicles on the road have in common? Tires. Perhaps to keep the playing field level, the tax on tires increases. The more tires you have on your vehicle, the more wear you cause to the road. The more tires you have on the vehicle the more you pay for that said wear. I'd complain as much as the next guy but the bottom line is this, where does the loan payback come from? I'm going to step out on a limb and guess taxes, it just as well be justified. The thing is, some of the most tire'ed vehicles on the road are 18 wheelers and many are passing through, their tire taxes wouldn't be paying for Nebraska roads, BUT, not many of them are hybrids so for them, its fuel taxes.

    -- Posted by Nick Mercy on Wed, Mar 19, 2014, at 8:58 PM
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