LINCOLN — Gov. Pete Ricketts urged state lawmakers Thursday to green-light a $150 million proposal that he said would help Nebraska's expressway system cross the finish line sooner.
A forthcoming bill sponsored by State Sen. Jim Smith of Papillion will propose transferring $150 million from the state's $728 million rainy-day fund to create a "transportation infrastructure bank." The transfer would help accelerate completion of the state's 600mile expressway system while providing matching funds for counties looking to repair and replace deficient bridges.
"We need to grow Nebraska, and, of course, our infrastructure is vital to that," the governor said during a Thursday press conference at the State Capitol.
The bill also will propose an "economic opportunity program" to finance transportation improvements that attract or expand businesses. But the bulk of the funds would be devoted to completing the 167 miles of unfinished expressway.
Sen. Heath Mello of Omaha waved the caution flag Thursday when he expressed concern about the level of funding for the proposal. Though Mello said he supports the concept of an infrastructure bank, he said committing $150 million of the cash reserve is too much at a time when the state faces a budget shortfall of at least $110 million and a potential $26 million prison expansion.
"I think throwing out a proposal like this right now, without knowing what may or may not happen with the state's fiscal picture, is just irresponsible," said Mello, chairman of the Appropriations Committee.
Ricketts said Thursday that he believes the cash reserve is too high, suggesting that $500 million is a better figure for the fund.
Smith's bill will propose transferring up to $150 million from the cash reserve from this year through 2023. Over the same time frame, the Nebraska Department of Roads would replenish the infrastructure bank from sources that include an increase in the gas tax approved by the Legislature last year.
The 6-cent-a-gallon increase, to be phased in over four years, is expected to eventually generate $75 million annually. Smith sponsored the gas tax increase, which passed over the governor's veto. Ricketts still opposes the increase, but he said Thursday that he doesn't want to "refight battles."
Under the state's current timeline for road construction, funding for the unfinished miles of expressway would not be available until 2024, said Kyle Schneweis, director of the Roads Department. An infrastructure bank would allow work to start on some projects as soon as 2020 and allow completion of the expressways by 2033, the same year the bank would expire.
If a balance remains in the infrastructure bank in 2033, the Roads Department would decide whether to spend the funds on other projects, according to the Governor's Office.
"This proposal will save us time, it will save us money and it's going to help us better support the economy in the state," Schneweis said.
Smith's bill also would authorize the Roads Department to use what's called a "design-build" process, which allows the design engineer and contractor to be selected simultaneously. The state currently uses a "design-bid-build" process in which the designers and builders can be separate contractors.
The traditional process takes seven to 12 years to complete a roads project. The design-build process can save two to four years by comparison, Schneweis said.
The bill also would propose a pilot project to provide matching funding to assist counties in repairing a backlog of deficient rural bridges.
Variations of infrastructure banks are used by more than 30 states. But Ricketts said the version that he supports would not depart from the state's pay-as-you-go tradition when it comes to funding roads.
The state got a $70 million a-year infusion of funds for expressways and other highway improvements beginning three years ago with passage of the Build Nebraska Act. Earlier this week Sen. Bob Krist of Omaha introduced a bill to repeal the Build Nebraska Act, saying the earmark is no longer needed with the gas-tax increase.
Ricketts and Smith said they disagree with Krist on that point.
"It's not one or the other, and I will be making that case very strongly," Smith said.
The infrastructure bank bill will come before the Transportation and Telecommunications Committee, of which Smith is the chairman.
"This is truly a collaborative effort between the legislative and executive branches on a solution to expressway construction," Smith said.
Josh Moenning, executive director of 4 Lanes 4 Nebraska, a Norfolk-based coalition pushing for statewide infrastructure development, applauded the proposal. He called infrastructure banks and design-build procedures "necessary first steps to modernizing Nebraska's transportation policies."
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