If the fuel tax were increased by one-half cent by August, it would yield about $250 million in fiscal 1960. The official budget estimates projected a decline in the receipts from excise taxes on automobiles, parts, et cetera. It now looks as though receipts from these taxes will exceed receipts in fiscal 1960. The Treasury was apparently wrong by over $200 million on this point. If the growth only in these excises, which the Treasury was not expecting and has not planned to spend, could be credited to the highway trust fund, this alone would add an additional $190 million in fiscal 1960 and, combined with a one-half cent fuel tax increase, would yield a trust fund surplus of $151 million in fiscal 1960. According to the expenditure estimates of the Secretary, the fund, using this plan, would be solvent by $230 million in fiscal 1961, $900 million in fiscal 1962, and $2.275 million in fiscal 1963. Mr. Chairman, we appreciate the opportunity to appear before you to present these suggestions. However, we wish to reiterate that any method to finance the highway program on schedule is in the national interest. Any method which allows the stopping, slowing, or stretching out of the expanded highway program will not, in our opinion, be in the national interest. Thank you very much. The CHAIRMAN. Thank you very much, Mr. Koch, for bringing to us the views of the National Crushed Limestone Institute. The Chair observes our colleague from Mississippi, the Honorable James Whitten, is present. Would you like to present Mr. Harrison? Mr. WHITTEN. I appreciate very much your extending to me that courtesy. Mr. Harrison is here on behalf of the Mississippi Travelers Association. He has a long and outstanding career in Mississippi and is a real American. I welcome him to your committee. I am sure what he has to say will be of importance to the committee. The CHAIRMAN. Mr. Harrison, we appreciate your coming to the committee in the company of Mr. Whitten. All of us recognize him to be one of our most valuable Members of the House. You are recognized, Mr. Harrison. STATEMENT OF J. M. HARRISON, PAST PRESIDENT, MISSISSIPPI TRAVELERS ASSOCIATION, JACKSON, MISS. Mr. J. M. HARRISON. My name is J. M. Harrison, of Winona, Miss. I am appearing here at the request of the president of the Mississippi Travelers Association, Mr. Doug Grantham, of Greenwood, Miss., to present the views of our association regarding Federal highway legislation. Our association sponsored the first completed highway in our State highways system. That highway is now known as U.S. Highway 80. We helped finance the first survey of this road and in appreciation the 1954 legislature named the highway the Mississippi Travelers Highway. We appreciate this opportunity to make this statement, and realizing the importance of your time, gentlemen, it will be brief. Attached as part of our statement: Exhibit A, resolution adopted at our last State convention; exhibit B, news release issued by president of MTA. Our principal purpose in making this statement is to urge you gentlemen and the other Members of Congress to give this or any other highway legislation serious study, not only on a national basis, but as to how it will affect your State. On July 16, the Mississippi newspapers carried a news item that the State of Mississippi had sold $5 million worth of gasoline revenue bonds for highway purposes. These bonds were issued to match Federal aid because our State tax did not produce enough money. Our bonded debt for highways is increasing at the rate of well over a million dollars a year. For example, if we pay off $4 million, we issue $5 million at a higher rate of interest. In Mississippi we pay 7 cents State gasoline tax, 3 cents Federal gasoline tax, 3 percent State sales tax, and one-half percent city sales. tax where levied. We would especially like to point out that the sales tax is on the price of the product and the tax, tax on tax, therefore the sales tax averages 1 cent per gallon. Mississippi's total gasoline tax is 11 cents per gallon which is over 50 percent of the average retail price of gasoline. From our study we find that the Federal gasoline tax came into being on a temporary basis, and yet it remained, was increased, made permanent, and dedicated for highway purposes in 1956. Once a tax is imposed, it is seldom reduced or repealed. So there should be no talk of a temporary tax. There is a provision in the Federal Highway Act which penalizes States for using State automotive taxes for nonhighway purposes. This is a string tied on the aid money. In our State automotive taxes go for highway purposes, yet with our own highway tax receipts we are having difficulty matching Federal aid. In spite of this we will continue. In short, we do not think the Federal taxes should be increased when the Federal and State taxes are so high. Our association is in favor of applying all receipts from present Federal automotive taxes to the national highway program. What our association is afraid of is that the cost of this program will defeat the purpose for which this legislation was passed in 1956. It was our understanding that it was a pay-as-you-go program. In just 3 short years it is in trouble. More money at this time will just give you a breathing spell until the next Congress, which will have the same problem if the standards are not revised and the program stretched out over a few more years. This, we believe, would reduce the cost of the program considerably. Highway building is continuous and will not stop at the end of 13 or 16 years. The price tag for this program in 1956 was $27.6 billion. In just 3 years it has jumped $12.4 billion. That is an increase of over $4 billion a year. What will the price tag be in the next 2 or 3 years? This alarms us, and we can see the storm signals now. One major storm signal is posed by the question, Where is our State going to get the necessary money to maintain still another highway system? Very few of the present highways will be used in the Interstate System. So we will have a new system to maintain. People will operate their businesses and live on the present roads and they must also be maintained. High gasoline taxes which equal 50 percent sales tax on retail price of the product are helping to create an unprecedented demand for small cars. Foreign car ownership in our area is increasing rapidly, and could spell trouble, another storm signal, because it cuts into the consumption of gasoline and reduces tag fees. These are prime sources of road revenue in our State. It might be well for some of the wealthy industrial States to give some consideration to the problem created by the increasing purchase by consumers of small foreign cars, which does not help our own automobile manufacturers, steel companies, rubber companies, parts manufacturers, or labor. Motor transportation is a considerable item in the cost of living, especially in communities served exclusively by motor transportation. Increasing the gasoline tax will add fuel to the fires of inflation because it will be added to the cost of doing business. From magazine advertising and other information the Interstate System helps industrial and other developments in the area which it serves, therefore there are other beneficiaries than highway users. On the other hand, the many people who may never actually use or seldom use the interstate facilities, yet are already paying for the construction of these roads, should not be forced to pay additional gasoline or automotive taxes. In Mississippi, we must look at any proposal, private or governmental, from a long-range point of view. We must pick out a landmark before going into the forest, if we expect to come out. We cannot afford the luxury of wandering aimlessly around in the wilderness. We do not have the time or the money to waste, because we are not a rich State. But let us not look at Mississippi as standing alone on the North American Continent. There are now 49, and another in the offing out in the Pacific. Is it not possible that we share the same burdens, the same problems of lack of wealth? That being true, we are forced to admit that the whole is not better off than any of its parts, which means that the Nation might not have unlimited wealth to throw around like a drunken spender. Our State credit and the combined credits of the several is actually the Federal Treasury. It is only what we can afford, as citizens, which supports the Treasury, and when, as citizens, we are asked to contribute beyond our means we are no longer a solvent nation. Gentlemen, we do ask that this committee and the Congress consider setting a landmark by which this Nation can be guided to safety. Do not ask its citizens to subscribe to a policy or practice which you would not advise a private businessman to do, if you wanted to see him prosper. And, you must remember, gentlemen, that the Nation is only as well off as its individual citizens. The CHAIRMAN. Mr. Harrison, do you desire these exhibits to be included in the record? Mr. J. M. HARRISON. I do. The CHAIRMAN. Without objection the exhibits will be included as part of your statement. (The exhibits follow:) EXHIBIT A MISSISSIPPI TRAVELERS ASSOCIATION, JACKSON, MISS.-RESOLUTION No. 2 Whereas the Federal-State highway program is of importance to the welfare, defense and economy of our Nation; and Whereas Federal automotive excise taxes yielded $3,589 million for the fiscal year ending June 30, 1958, $1,510 million, or 42.1 percent, was diverted to the general fund and disbursed for nonhighway purposes: Therefore, be it Resolved, That the Mississippi Travelers Association, through its directors and membership gathered in annual convention at West Point, Miss., June 26, 1959, are opposed to the diversion of highway user funds, any increase in Federal automotive excise taxes, including the proposed increase of 12 cents per gallon Federal tax on gasoline, but we urge Congress to dedicate all highway users taxes to the highway trust fund, which will finance the present Federal highway program; and be it further Resolved, That we oppose any program which proposes contracts and disbursements beyond actual (or estimated) fiscal receipts based on existing and fixed revenue sources; be it further Resolved, That Congress reconsider the highway program to reduce the cost of the Interstate Highway System within reason, and stretch the program out because highway building is a continuous function of Government; and now, therefore, be it Resolved, That the Mississippi Travelers Association take this means of urging our State's representatives in both Houses of the U.S. Congress to take a strong stand against any increase in the Federal gasoline tax, and in favor of applying all receipts from present Federal automotive taxes to the national highway program. Adopted June 26, 1959. EXHIBIT B MISSISSIPPI TRAVELERS ASSOCIATION OPPOSES INCREASE IN GASOLINE TAX Doug Grantham, of Greenwood, president of the Mississippi Travelers Association, in commenting on the resolution passed by the association on June 26 said, "The U.S. Senate last night left the highway problem unsolved by rejecting President Eisenhower's proposal to increase the Federal gasoline tax 11⁄2 cents per gallon, and they also refused to earmark the Federal automotive excise taxes for highway use." He further commented, "Although gasoline is basic to modern transportation and to the Nation's economy as a whole, it is now being taxed more heavily even than products which are generally regarded as luxuries. It follows that the gasoline tax increases the cost of virtually every commodity all along the line-from the point of manufacturing and production to the ultimate point of consumption. The effect of the tax is most noticeable in the case of commodities whic hare moved primarily by trucks. This includes milk, eggs, butter, cotton, feed grains, fresh vegetables, and other farm products, the great bulk of which are transported to market solely by trucks. The trucking industry, of course, cannot afford to absorb the additional burden imposed by the gasoline tax, and insofar as possible, it brings along the tax as a part of the cost of the transportation services. Likewise, the cost of all products is increased where gasoline is used in their transportation. The end result is that the cost of the gasoline tax finds its way into the ultimate price of the products to consumers thereby raising the overall cost of living. "The Mississippi Travelers Association is, and always has been, in favor of good highways. But as far as the association is concerned, there is no justification for the increase in the Federal gasoline tax, or any other special tax on highway users. Last year the highway users paid over $3.6 billion in Federal gasoline and automotive taxes and of this, only $2.1 billion found its way into the Federal highways trust fund. The remaining $1.5 billion was paid into the Federal Treasury for use other than highways. If the highway users taxes that are diverted to use other than highways were used for highway purposes, there would be no financing problem. The Mississippi taxes on gasoline now is 11 cents per gallon which is equivalent to over 50 percent of the average retail price of the gasoline. With such a heavy burden on the motorist, it seems that the diverted taxes should be used for highway purposes and the request for any tax increase withdrawn." The CHAIRMAN. Any questions of Mr. Harrison? If not, Mr. Harrison, we thank you, sir, for your statement and your words of advice. Mr. J. M. HARRISON. Thank you, Mr. Chairman. The CHAIRMAN. We certainly agree with much that you had to say. That concludes the calendar; that concludes the hearings on this subject. (The chairman had placed in the record the following telegram received from the Governor of the State of Virginia. The Honorable Burr P. Harrison placed in the record, along with his comments, a copy of senate joint resolution No. 4 of the Senate of the State of Virginia concerning the allocations of Virginia's highway revenues. The telegram and the comments of the Honorable Burr P. Harrison follow): RICHMOND, VA., July 28, 1959. Hon. WILBUR D. MILLS, For the record I wish to register my opposition to the proposed increase in the Federal gasoline tax. When the Federal Highway Act was passed it was contemplated that the trust fund would have to be supplemented by general revenue for some years and later reimbursed. The Federal Government now collects annually road-use taxes which do not go to the highway trust fund considerably in excess of a billion dollars. This source of revenue should now be used to supplement income to the highway trust fund, thus obviating any necessity for an increase in the Federal gasoline tax. J. LINDSAY ALMOND, Jr., Mr. HARRISON. Mr. Chairman, I ask at this point in the record to insert a copy of a resolution adopted unanimously a few months ago by the Senate of Virginia, the House of Delegates unanimously concurring. It will be noted from the resolution that in lieu of the position taken by the Governor of the Commonwealth in his telegram to the chairman, it was the unanimous opinion of both houses of the Virginia General Assembly that the construction of the interstate highway program should be extended for a period of 7 years and that such action is essential to enable Virginia to continue to maintain its own 50,000-mile primary and secondary road system. I was interested to note that on the day the Governor telegraphed the chairman asking for money out of general funds to continue the interstate program, the people of Rockingham County, Va., in my district, were notified that there are no funds for other than maintenance work on their farm-to-market roads. (The resolution follows:) SENATE JOINT RESOLUTION No. 4 CONCERNING THE ALLOCATION OF VIRGINIA'S HIGHWAY REVENUES Whereas citizens of Virginia for many years have been taxing themselves to provide a statewide system of primary and secondary roads and to assist municipalities in the construction and maintenance of certain streets therein, which efforts have produced a system of highways which is the envy of many States; and Whereas Virginia's 50,000 miles of road mileage is greater than that maintained by any other State, with one exception; and Whereas the 40,000 miles of county roads and 10,000 miles of primary highways are of vital importance to every segment of the State's economy, and to every community within the State; and Whereas there is danger that the proposed system of Federal highways may be pushed too fast at the expense of Virginia's other roads: Now, therefore, be it Resolved by the Senate of Virginia, the House of Delegates concurring, That the general assembly is deeply concerned about the impact of the Federal interstate program on Virginia's own road system, particularly the farm-to-market roads; and |