Higher blend gas pumps

LINCOLN — Another side effect of the coronavirus will start showing up at Nebraska gas pumps next week.

Starting July 1, the state motor fuels tax is slated to hit an all-time record of 33.2 cents per gallon. That’s up 3.9 cents per gallon from the current level, according to an announcement from the Nebraska Department of Revenue. The new rate will be in effect until Dec. 31.

Vicki Kramer, a spokeswoman for the Nebraska Department of Transportation, said the rate increase is needed to offset the coronavirus-driven loss of revenues for the state’s road-building fund.

The State Highway Trust Fund gets money from three sources: gas taxes paid at the pump, sales taxes paid on motor vehicles and a portion of each motor vehicle registration.

All three have taken a hit since the global pandemic reached Nebraska.

Gas tax revenues, the largest of the three, dropped by 23% as Gov. Pete Ricketts imposed travel restrictions and pushed for people to stay home to curb the spread of the virus.

As a result, traffic counts on Nebraska’s streets and highways plummeted.

“People just aren’t getting on the road the way they usually do,” Kramer said.

Traffic dropped by double-digit percentages between March 15 and June 13, according to Transportation Department officials. At its lowest, during the week of April 12-18, traffic was down 35% from average levels in 2016 through 2018.

Last week, as social distancing restrictions eased, traffic was off by only 8% across the state.

Meanwhile, sales tax revenues from motor vehicles dropped 20% and motor vehicle registration monies were down 42%.

Kramer attributed most of the decline to the closure of county offices and the governor’s executive order giving people more time to register their vehicles.

The declines meant that the state was not collecting enough money to meet the road-building and maintenance budget previously approved by the Legislature.

That triggered a state law that raises or lowers part of the gas tax, called the variable tax, to keep revenues in balance with the roads budget. Adjustments are made every six months. This time, the variable tax increased 4.6 cents a gallon.

“It’s unusual, but it’s also just a trigger,” Kramer said. “This is an important component to project reliability and provides greater certainty for (the department’s) one-year and five-year construction program.”

The total gas tax also includes a fixed tax, set by state lawmakers at 16.3 cents per gallon, and a wholesale tax, determined by the price of fuel.

The wholesale tax dropped to 9.5 cents per gallon, down from 10.2 cents currently.

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