State senators on Monday afternoon gave first-round approval to the three main bills that tinker with the state’s $6.86 billion two-year general fund budget.

Senators made no changes in the plan brought to them by the Legislature’s Appropriations Committee though they did discuss several issues, including a proposal that will increase the gas tax by a likely 1.2 cents per gallon.

Bayard Sen. Phil Erdman’s proposal to eliminate the possibility of a gas tax hike failed on a 20-28 vote.

The Appropriations Committee added $14.5 million to the Department of Roads budget to make up for increased salary and health insurance costs. The addition in funding will likely mean a small increase in the state’s fuel tax next fiscal year because the fuel tax is tied to the budgeted amount.

But Sens. Tom White and Gwen Howard, both from Omaha, said the tax increase, on top of escalating gas prices, would be punitive to lower-income Nebraskans.  

“It’s the gasoline; it’s the mortgage; it’s the milk,” said Howard about rising prices for average families. “I am very, very concerned about what this bill will do to working persons,” she said.

“OPEC and us have our hands in the pockets” of consumers, White said.

But Appropriations Committee members pointed out that the potential tax hike will not add much to fuel costs.

The likely increase — a 1.2-cent per gallon hike — would cost the average driver (20,000 miles a year at 20 miles per gallon) about $12, said Sen. John Wightman of Lexington, an Appropriations Committee member.  

Lincoln Sen. Danielle Nantkes, an Appropriations Committee member, urged senators to look beyond the next election, when their vote on the gas tax issue could be used by their opponents. “We are here to make tough decisions,” she said.

Appropriations Committee members have pointed out that the roads department is facing double-digit increases in the cost of road construction material at the same time that the federal government is likely reducing federal aid to states.

The fuel tax issue will return later this week when senators debate a bill (LB846) that changes the way the state computes the fuel tax, tying a portion of the tax to the sale price of gasoline.

The biggest change in the state’s budget plan is additional state aid to schools that senators didn’t anticipate when they passed the biennial budget last spring. Senators are expected to tackle the state aid issue today.

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