Minnesota officials await final word on transportation funding

road closed sign

“We’ve got to get a highway bill,” Cravaack said. “We’ve got to get long-term projections. We’ve got to get people back to work, we’ve got to get our bridges and our roads.”

Solving the Trust Fund problem

The increasing difficulty of paying for the Highway Trust Fund is central to the concerns over the funding for the nation’s infrastructure projects, most of which comes from the fund.

An 18.3 percent federal gasoline tax makes up about two-thirds of the trust fund’s roughly $40 billion in revenue each year, but with Americans driving less amid rising fuel prices increases, and with fuel efficiency standards increasing, the tax has become a less robust source of revenue than it has in the past. The Congressional Budget Office expects the fund to go broke sometime in 2013, and the government has already had to come up with several billion in non-gas tax funding for the trust fund every year, including using stimulus money and transfers from the general fund.

Congress has not increased the gas tax since 1993, and there is little political will to do so this session. Instead, the Senate has proposed closing tax loopholes and moving around other federal tax revenues to pay for the trust fund, while House Republicans are attempting to expand oil drilling, including in the Arctic National Wildlife Refuge, to increase revenue. The plan has, not surprisingly, angered Democrats, and even some Republicans.

Cravaack, meanwhile, postulated that the government could use royalties from oil companies to pay for the trust fund. Walz, for one, said he wasn’t upset by the drilling plan, but he said lawmakers had considered a litany of other revenue plans, including adding a surcharge to transitions on Wall Street, before landing on more oil.

“There was a lot of soul-searching and honest member-to-member work over the years, that we didn’t have things like ANWR because it simply didn’t make enough of the difference for the environmental threat that was there,” Walz said. “It’s the problem we’ve had all year of putting these ideologically unpalatable bills forward … not with any intent of moving it.”

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Comments (2)

  1. Submitted by Jon Kingstad on 02/18/2012 - 07:58 pm.

    Royalties from oil

    Chip Cravaack has no problem with diverting “royalties” from sales of oil on government land to the trust fund. What does he think these”royalties” are? “Royalties” are nothing more than a fancy term for “monopoly profit.” It’s the same term used for license fees to other monopoly (patent and copyright) holders. There is no economic reason for them.They are collected because the law says the holder can charge and collect them at whatever the market will bear.

    I suspect that the royalties the US Government receives from its oil leases is a nontrivial amount of money. Anyway, no one in Congress has suggested that the Government waive all royalties if the buyers pass the savings on to consumers.

    If the Government can charge and collect billions if not trillions in royalties from the sale of oil, what would be the difference if it increased the royalties and also required all other leaseholders to increase theirs and, at the same time tax said amount as a “carbon tax.” This to fund the subsidization of renewable energy development.

    I’m very disappointed to see that Tim Walz is not troubled by drilling in ANWR. He fails to see that ANWR is not only a pristine environment but a symbol. During the 19th century, there were millions if not billions of passenger pigeons in this country. As an apparently limitless and renewable natural resource, they were hunted and killed to extinction. At what point would Tim Walz have been “troubled” by the extermination of the passenger pigeon? When there were 1,000 left in existence? !0,000? We have one ANWR left which is virtually the only remaining wilderness in North America. Allowing drilling, however, “environmentally friendly” it may be, (and we sure can believe oil companies on this can’t we?) means the end of wilderness in North America.

  2. Submitted by Paul Udstrand on 02/20/2012 - 08:27 am.

    Oil royalties?

    This is why the Republicans are unfit to govern. They’re looking at replacing $100 billion dollars and Crevaack thinks they can do it with oil and gas royalties? Right now the Feds collect a little less than $10 billion a year in royalties. How much oil and gas does Crevaack think we have? The USGS just revised downward the estimate of natural gas reserves. Even if we increased production by 20% (which is wildly optimistic) that would only bring in an extra $2 billion a year. So where’s the other $98 billion gonna come from Chip? This is how we end up with massive deficits whenever the Republican take over the books.

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