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Will Congress find the dough to fund the nation's highways?

Posted by: Tim Harlow Updated: July 15, 2014 - 1:31 PM

All eyes are on Washington this week where a crucial vote on how to fund the nation's highways could take place as early as today.

But it may only be a stopgap measure that might not solve the problem. Congress is proposing to keep the fund solvent for eight more months with $10 billion that would come from a variety of sources.

For months, U.S. Transportation Secretary Anthony Foxx has warned Congress that the fund used to reimburse states for highway construction projects will go broke by Aug. 29. Without new money, the Highway Trust Fund will become insolvent and the department will not be able to reimburse states for construction projects.

Just days ago, Foxx said the U.S. Department of Transportation would begin a cash management plan starting Aug. 1. Under the plan, the department will reimburse states for infrastructure work based on the cash available in the account. He said the Federal Highway Administration will no longer make “same-day” payments to reimburse states, and funds will be distributed twice a month in proportion to each state's federal formula apportionment for the fiscal year. The fiscal year ends Sept. 30.

In a letter to state departments of transportation, Foxx wrote that "there is still time for Congress to act on a long-term solution.  Our transportation infrastructure is too essential to suffer continued neglect, and I hope that Congress will avert this crisis before it is too late.  I urge you to stand with me in calling on Congress to ensure the solvency of the Highway Trust Fund while committing itself to a sound, bipartisan, and long-term solution that will ensure the stability of the surface transportation system of our nation for the next several years."

MnDOT is slated to get $18 billion over the next 20 years for road projects, but a report issued late last year by the Transportation Finance Advisory Committee said that the agency will need $30 billion to keep pace with population growth and aging infrastructure.

Minnesota has the fifth-largest highway system in the nation with nearly 140,000 miles of roads. More than half of those miles and 12 percent of the state’s bridges are considered obsolete or deficient, according to a July 1 report from the National Economic Council and the President's Council of Economic Advisers.

Federal dollars make up 30 percent of the state’s transportation budget.

The Highway Fund depends on revenue from the national gas tax of 18.4 cents per gallon, last increased in 1993. The Congressional Budget Office said that without new money dedicated to transportation, all money collected from the gas tax starting this fall will be needed to cover the federal share of projects already promised to states and transit agencies. There would be no money for new projects, the office said.

The department's Mass Transit Account isn't doing much better. Projections show that account will have $440 million at the end of the fiscal year in September. It began the fiscal year with $2.5 billion and was bolstered with a $ billion transfer of funds from the General Account.

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