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Oberstar: Gas tax hike yields federal money

ST. PAUL - A state gasoline tax increase for transportation means Minnesota could reap more federal dollars for road and bridge projects, a key congressman said.

U.S. Rep. Jim Oberstar, chairman of the House Transportation and Infrastructure Committee, said Friday that his home state could pull in an additional $160 million in federal money over a five-year period based on the nickel-per-gallon increase that will take effect this year.

Minnesota's gas tax -- currently 20 cents but set to increase to 28.5 cents in coming years -- has leveraged $680 million in federal funds under current federal law.

Oberstar, a Chisholm Democrat, applauded the DFL-controlled Legislature's recent override of a Gov. Tim Pawlenty transportation veto. He said road construction costs continue to grow and increased highway use is putting more pressure on the state's transportation infrastructure.

"Their decision to invest in the state's future will create a baseline for growth, productivity, mobility and advance the state of the economy of the state of Minnesota," said Oberstar, who met with lawmakers at the state Capitol.

Pawlenty and other Republican opponents of the transportation package put into law said Minnesotans cannot afford the tax increases. Oberstar said more money is needed to make transportation improvements that will allow Minnesota to remain competitive in a global economy.

"If you don't invest, you have no future," he said.

Bob McFarlin, acting state transportation commissioner, said he wants to meet with Oberstar to discuss how the new state transportation spending plan could affect the amount of federal money Minnesota receives.

"If those opportunities exist ... we certainly want to tap into those," McFarlin said of leveraging more federal funds.

Senate Transportation Chairman Steve Murphy, DFL-Red Wing, said lawmakers have known that by raising the state gas tax, "that draws in more federal match."

A national commission recently recommended a 25- to 40-cent-per-gallon increase in the federal gas tax to improve transportation infrastructure. Oberstar said his committee is just beginning to prepare for next year's congressional debate over new transportation legislation, but he would not rule out proposing a gas tax hike similar to what that commission recommended.

"I don't see any reason not to, but I'm not committing to any particular dollar amount at this time until we build a case for the investment that's needed and relate the investment requirement to funding sources," he said.

That could include a variety of funding options but must include an increase in the gas tax, Oberstar said, calling it the "cornerstone" revenue source for highway and bridge construction.