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Gas tax impasse hampers summer road repair

You may be seeing a lot less road construction on the highway this summer.

After years of underfunding sent the federal Highway Trust Fund careening toward insolvency, state transportation officials are already postponing repair projects just as the critical summer construction season gets underway.

From Delaware to Oregon, state transportation officials have warned they may have to cancel projects outright until they are convinced that Congress will make good on its share of highway funding.

And unless Congress acts soon, "we could start bouncing checks for roadwork before our kids go back to school," warned Transportation Secretary Anthony Foxx in a blog post this week.

On Wednesday, two senators stepped up with a proposal to boost gasoline and diesel taxes to help replenish the fund.

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The federal gas tax—last raised in 1993—has been steadily losing purchasing power because it's not indexed to inflation. Declining fuel consumption has also reduced tax receipts and left the federal fund for road repair and construction running on empty.

Congress has been patching the fund with transfers from general revenues since 2008.

Now, the imminent insolvency has revived a long-running political battle over how to fund the repair and expansion of the nation's crumbling highways and bridges.

Without additional funding, the highway portion of the fund is likely to dip below the $4 billion funding level as soon as July, according to DOT's latest projections.

Federal, state and local spending on road building and maintenance currently tops $90 billion a year, according to the American Society of Civil Engineers. But it take nearly twice that level of spending to significantly improve conditions and performance, according to Federal Highway Administration estimates.

To help boost funding, Connecticut Democrat Chris Murphy and Tennessee Republican Bob Corker have proposed raising federal gasoline and diesel taxes by 6 cents a year for the next two years. The current tax on gas is 18.4 cents per gallon and the diesel tax is 24.4 cents per gallon.

"For too long, Congress has shied away from taking serious action to update our country's aging infrastructure," Murphy said in a statement. "We're currently facing a transportation crisis that will only get worse if we don't take bold action."

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But with midterm elections looming this November, the proposal faces a steep uphill battle. A tax increase on gasoline is among the most visible to voters which is a big reason the tax hasn't been raised in more than 20 years.

House Republicans have proposed filling the road funding gap with Postal Service savings from cutting Saturday mail delivery, a move that would keep the highway trust fund afloat for another year. Senate Democratic leaders oppose the plan.

Despite the political perils of raising the tax, some 15 state legislatures have voted to raise their state gas tax to fund highway projects, according to the American Road & Transportation Builders Association. (On the list are Arkansas, Indiana, Kansas, Maine, Michigan, Minnesota, North Dakota, Ohio, Pennsylvania, Rhode Island, South Dakota, Utah, Vermont, Washington and Wyoming.)

Though motorists are loathe to pay more at the pump, the underfunding of road repair is already costing them more in the form of higher repair bills, according to a report by TRIP, a transportation research and lobbying group.

Chronic underfunding has reduced about a third of America's major roads to "poor" or "mediocre" condition, according to TRIP. Driving on those crumbling roads is expensive; TRIP estimates it costs U.S. motorists some $80 billion a year in repairs and added operating costs, or about $377 per driver.

Those costs include wear and tear, more frequent maintenance and higher fuel consumption. Conditions vary widely. In Los Angeles, bad roads cost drivers more than $800 a year, for example.

Members of the Boston Public Works Department fill potholes.
Scott Eelis | Bloomberg | Getty Images
Members of the Boston Public Works Department fill potholes.

Cutbacks in federal funding of road repair will also cost the construction industry thousands of high-paying jobs.

More than 14 million Americans—rightly 1 in 10 workers—builds, operates or maintains the roads, bridges, airports, railways and other infrastructure, according to the a recent analysis by the Brookings Metropolitan Policy Program. That workforce, which spans 95 occupations and 42 industries, is paid better than average, the study found.

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Workers in lower-paid infrastructure occupations earn 30 percent more than other sectors. And although some 12 percent hold a bachelor's degree or higher, workers generally need less education to qualify for these jobs, according to the report.

By CNBC's John Schoen. Follow him on Twitter @johnwschoen or email him.