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Federal Cash Critical for Minnesota's Transportation System

August 12, 2009 By Conrad deFiebre, Transportation Fellow
Federal funding is "a critical issue" for Minnesota's transportation network, according to the state Department of Transportation. MnDOT notes that $463 million in federal aid agreements made up one-third of total state Trunk Highway Fund revenues in fiscal 2009, and another $133 million flowed from Uncle Sam to Minnesota's local roads and bridges last year.

This is why Minnesotans should pay close attention to the battle brewing in Washington over reauthorizing federal surface transportation funding scheduled to expire on Sept. 30. Minnesota Congressman James Oberstar wants a reformed $500 billion program in place by then. The Obama administration wants to delay 18 months while extending funding at current levels, barely half of Oberstar's revenue target.

Oberstar, chairman of the U.S. House Transportation and Infrastructure Committee, is gathering a powerful coalition of business, construction, manufacturing, trucking and labor allies and promising: "The administration's either going to come along, or we're going to roll over them."

This kind of tough talk signals an intriguing showdown between fellow progressives, but the economic stakes are much more important than any political drama. And don't downplay the chances for Oberstar, the longest-serving member of Congress in Minnesota history and a wily veteran of Beltway budget disputes.

He made a detailed case for his side of the argument in several public forums in Minnesota last week as the House started its August recess. He promised a House floor vote on his bill before the end of September.

At 775 pages and counting, Oberstar's legislation remains a work in progress. But, along with increased funding that is vital to U.S. prosperity, it features a broad reorganization of current federal transportation efforts, which repeated studies have found to be disjointed and woefully lacking in the vision and flexibility needed to address 21st century mobility challenges.

Oberstar would replace all 108 U.S. Department of Transportation funding silos - "strait jackets," he called them - with four broad programs focusing on economically critical projects, highway safety and reduction of urban congestion and air pollution. He said it would deliver road, bridge, rail, airport and waterway projects much faster than current red tape allows, with a leg up for nationally significant improvements identified by the National Academy of Sciences.

"This is a truly new start for transportation," Oberstar said. "You can't ask people to pay more for what isn't working now."

Of course, it's the paying more that's the hard part of the debate. Americans have gotten used to paying progressively less in real terms as the 18.4-cents-per-gallon federal fuel tax has lost nearly half of its buying power since it was last raised in 1993. And you get what you pay for: a congested, deteriorating transportation system and a structurally weak federal highway fund that requires repeated multi-billion-dollar infusions of non-user funds to stay solvent.

Oberstar said revenue solutions could include:

  • Indexing the gas tax for inflation in highway construction costs (also a Minnesota 2020 proposal).
  • $60 billion in federal borrowing to be repaid by a nickel increase in the gas tax, which would take effect only after two consecutive quarters of U.S. economic growth.
  • Converting the per-gallon gas tax to a percentage of the price at the pump (similar to the federal airline ticket tax).
  • A 0.02 percent fee on oil futures contracts, which Oberstar said would raise more than $30 billion a year and "would be mostly paid by OPEC and other countries that sell us fuel."
So far, Oberstar said, the Obama White House has "run for cover" from all these ideas. But he said consensus from influential business groups such as the U.S. Chamber of Commerce and the American Trucking Association, which both have called for a higher gas tax, could loosen the administration's resistance. "I've told these groups that they have to lead, because the White House isn't," Oberstar said. "If they come together, then the problem is solved."

The alternative, he said, is unacceptable delay, probably more like four years than the year and half proposed by the White House. "I know how Washington works," Oberstar said. "Inertia is the enemy of progress. This is real economic stimulus, and we can't wait to transform the way we do transportation in America."

Years of delay in enacting the current federal transportation program was one of the reasons for the long holdup in reconstruction of the Interstate 35W-Crosstown Commons, state officials say. The bill was not only late, but also, no thanks to budget cutting by the Bush White House, $90 billion short of needs identified by U.S. DOT and congressional conservatives, Oberstar said.

Will President Obama repeat the mistakes of his predecessor in the transportation arena? We can hope that Oberstar and his powerful allies show the current White House occupant the way forward to a timely new deal for mobility in both Minnesota and the entire country.

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