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CORRECTED - US states slow road projects due to funding gap

Wed Sep 3, 2008 6:28pm EDT

(Corrects date in paragraph three to show government fiscal year ends Sept. 30)

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WASHINGTON, Sept 3 (Reuters) - U.S. states have slowed road construction projects, initially budgeted at more than $41 billion for 2009, in response to a shortfall in federal gasoline tax receipts that help fund them, a senior congressional lawmaker said on Wednesday.

Rep. John Mica, the top Republican on the House of Representatives Transportation Committee, said in an interview that the problem should create new urgency in Congress to close the estimated funding gap of at least $4 billion when it returns next week from its August recess.

"We've got to make that commitment sometime between now and when the fiscal year expires (Sept. 30) or it could be dire consequences," Mica told Reuters in a telephone interview from Minneapolis where Republicans are holding their presidential nominating convention.

Mica and other lawmakers earlier in the day joined Minnesota state officials on a tour of the rebuilt I-35W bridge, which collapsed in August 2007.

Federal transportation safety officials suspect a design flaw caused the bridge failure that killed 13 people and focused national attention on addressing aging U.S. infrastructure.

With motorists driving less and abandoning inefficient vehicles due to high gas prices, lawmakers with sway over transportation and public works matters in Congress attempted without success this summer to augment the federal trust fund that holds revenue from gas taxes for road projects.

Some now believe a remedy could come in any second economic stimulus package since road construction projects create jobs and radiate other economic benefits, which also could pay election-year dividends to all candidates.

Mica said, however, that the quickest way to get projects back on line may be to attach the money to must-pass spending legislation within the next month.

There is little to no appetite in Congress to raise fuel taxes in a sluggish economy to cover the shortfall, especially in an election year. The U.S. gasoline tax has remained at 18.4 cents per gallon since the early 1990s. (Reporting by John Crawley; editing by Carol Bishopric)



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