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NDOT asks for higher highway cash appropriation, warns state match needed to use federal funds
Summary
Nebraska Department of Transportation Director Vicky Kramer urged the Appropriations Committee to approve higher highway cash fund appropriation levels to meet federal match requirements and to consider modest pay adjustments to retain CDL workers.
Vicky Kramer, director of the Nebraska Department of Transportation, asked the Appropriations Committee to approve the governor's recommended highway cash fund appropriation to allow NDOT to obligate federal highway funds and to fund personnel costs that help retain CDL-holding maintenance workers.
Kramer said the department requests a highway cash fund appropriation level of $543.9 million for FY2026 (and a similar level for FY2027 in the governor's recommendation). She said that level, and an additional requested increase of $37.7 million for FY2026 and $39.5 million for FY2027, are needed to provide the required state match to fully use increased federal funds from the Infrastructure Investment and Jobs Act (IIJA). "Without this increase, NDOT will be unable to provide state matching funds to fully take advantage of our allocated formula federal funds," Kramer said.
The director explained the highway cash fund mechanism and the use of a variable motor fuels tax rate that can be adjusted twice yearly to ensure the fund supports multi‑year projects. Committee members asked how the proposed appropriation would translate to consumer costs; Kramer said the gas tax change equates to a 0.5¢ per gallon increase in the base rate and estimated an average motorist driving 12,000 miles per year would pay roughly $3 more annually under the requested rate.
Kramer also asked for personnel-related fund adjustments: an NDOT-specific pay-salary-line (PSL) increase to provide a special wage differential for CDL-holding employees and to improve retention, with related highway cash fund adjustments of about $4.674 million in FY2026 and $4.907 million in FY2027.
Committee members raised questions about variable rate calculations and timing; Kramer said the requested appropriation would stabilize state match ahead of the next federal transportation reauthorization anticipated in late 2026.
Ending: The committee took testimony and asked follow-up questions; no formal appropriation vote occurred at the hearing.
