Roadblock: DC standoff over road funding worries local leaders

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If Congress doesn't agree soon on new funding for transportation construction, federal dollars that help pay for expensive road projects in Minnesota and other states could run dry in a matter of weeks, the Associated Press reports.

Democrats and Republicans are at odds over how to replenish the federal Highway Trust Fund before Aug. 29, when its cash reserves will fall below what's required by law.

Minnesota's transportation leaders have been told that if Congress doesn't reach a deal soon, the federal government will slow down its reimbursement of state and local highway expenses.

Local governments typically pay the costs of road construction upfront and are reimbursed by the feds within a week or two.

Local projects that would be immediately affected, according to the League of Minnesota Cities, are in Duluth, Cloquet, and East Grand Forks. Eight counties might see reimbursement delays, and an unspecified number of state projects could be stopped, according to the league.

MnDOT Commissioner Charlie Zelle has reportedly put together several scenarios if the trust fund goes broke. One option would be to focus only on maintenance projects and delay any new construction, the Star Tribune reports.

Between 300 and 400 highway projects are scheduled in Minnesota each year. This year's projects cost about $3.1 billion, and the federal government is covering about 30 percent of that, according to the Star Tribune.

The U.S. House approved a bill Tuesday that would put another $11 billion into the highway fund by raiding several small programs, MPR News reports. And even that would only keep the fund solvent for about 10 months.

The Senate is considering a similar approach and President Obama says he backs the House bill.

The reason the highway trust fund has been running a deficit is pretty simple: It gets its money from the gasoline tax, and those revenues have been declining in recent years.

That's mainly because the tax rates – currently at 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel fuel – haven't gone up in 20 years, while the costs of construction have increased by 60 percent, according to the Washington Post.

Democrats and Republicans can barely agree on the details of the stopgap measure, and they have even deeper divisions over how to address transportation funding in the long term.

Most politicians are shying away from the idea of raising the gasoline tax, even though experts say that's the most logical solution.

Other ideas that have been suggested include charging people by the mile when they drive, or collecting a "royalty tax" on expanded oil drilling either offshore or on federal lands, according to the Star Tribune.

MnDOT has conducted several studies of the mileage tax in recent years to test its reliability, but the results were somewhat disappointing, the Star Tribune reported.

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