SALT LAKE CITY, UTAH, July 2, 1959. Hon. WILBUR D. MILLS, Chairman, Ways and Means Committee, We wish to go on record as petitioning the Congress to provide the funds necessary for carrying forward the highway construction program inasmuch as the highway construction industry, engineers, and planners are geared to carry the program forward. We understand unless special appropriation is made, shortages in the highway trust fund will prevent regular appropriations for fiscal years ending July 1, 1961, and July 1, 1962. We feel appropriations should be obtained from the general fund and not from additional taxes upon highway users. GUS P. BACKMAN, Secretary, Salt Lake City Chamber of Commerce. STATEMENT OF FRED H. SEXAUER, CHAIRMAN, NEW YORK STATE HIGHWAY USERS CONFERENCE, INC. Gentlemen, my name is Fred H. Sexauer. I am chairman of the New York State Highway Users Conference, Inc., a conference of organizations that represent the automotive trades, commercial buses, commercial travelers, distributors, farm organizations, petroleum organizations, and truck organizations. Among the purposes of our conference is that to promote sound public policies of highway use, development, safety, taxation, finance, and administration. The adoption of the program and policies of the conference require the ratification by all of the members. In other words, the program and policies of the conference are the result of the unanimous consent of its members. As basic principles of highway financing, the New York State Highway Users Conference maintains that: A. All revenues derived from motor vehicles should be used for highway purposes only and ear tagged for such purposes. B. In accomplishing this objective, current revenues derived from motor vehicles should be dealt with under a plan which will progressively bring to an end, within a reasonable time, any use of them for other than highway purposes. C. An impartial determination should be made as to the equitable sharing of highway costs by highway users and other beneficiaries of expenditures for streets, roads, and highways. NOTE. The term "highway purposes" as set forth in point A above is intended to include the cost of administering laws, providing for the collection of highway user taxes and fees, statutory refunds and adjustments provided therein, payment of highway obligations, cost of construction, reconstruction, snow removal, maintenance and repair of public highways and bridges, and expense of State enforcement of traffic laws. Under the terms of the Federal-Aid Highway and Highway Revenue Acts of 1956, the entire proceeds of the 3-cent-per-gallon Federal tax on motor fuels, together with certain specified percentages of the proceeds of various other Federal automotive excise taxes, are earmarked for the Federal highway trust fund established to finance the expanded highway program. The New York State Highway Users Conference urges: That there be no increase in present rates of the Federal automotive excise taxes (including the Federal tax on motor fuels) levied upon highway users and earmarked, in whole or in part, for the Federal highway trust fund. In accordance with the policies adopted by the New York State Highway Users Conference, Inc., I urge the honorable members of this committee to reject any proposal that includes an increase in the Federal gasoline tax. I thank you for your courtesy in granting me the opportunity to make this presentation. STATEMENT OF JAMES N. KEEFE, CHAIRMAN, MASSACHUSETTS HIGHWAY USERS CONFERENCE The Massachusetts Highway Users Conference respectfully requests that it be recorded as very strongly opposed to any further increase in existing rates of the Federal tax on motor fuels or any of the other Federal automotive excise taxes. The conference has taken this position, by unanimous vote of 24 statewide affiliated organizations representing virtually all segments of highway transportation and many thousands of owners and operators of motor vehicles of all types registered in Massachusetts. The official policy of the Massachusetts Highway Users Conference on this issue, as contained in its current printed program, is quoted as follows: "This Federal-Aid Highway Act of 1956 provides that the entire proceeds of the 3-cent-per-gallon Federal tax on motor fuels, as well as certain specific percentages of the proceeds of various other Federal automotive excise taxes, shall go into the Federal highway trust fund. "As a consequence, highway users at present are not only being required to pay for the entire cost of the expanded highway program, but are also contributing billions of dollars besides to the general fund via other levies on motor vehicles and parts which are not dedicated to the highway trust fund. "The Massachusetts Highway Users Conference therefore strongly recommends: "(1) That there should be no increases in existing rates of Federal automotive excise taxes levied upon highway users and dedicated, in whole or in part, to the Federal highway trust fund. "(2) That upon completion of the expanded Federal-State highway program, as provided in the Federal-Aid Highway Acts of 1956 and 1958, all Federal automotive excise taxes, plus the Federal highway use tax (on vehicles of more than 26,000 pounds) be forthwith repealed." In this connection, we think it well to point out that the Nation's highway users in addition to paying all of the $2 billion-a-year-plus in special taxes dedicated to the highway trust fund, as well as the $1.5 billion more per year in other automotive taxes still going into the general revenues are also paying all the other kinds of taxes, both general and speecial, that all other citizens must pay to all levels of government. And we respectfully call attention to the fact that the Congress, seemingly recognizing the inequity of this situation, specifically provided, in section 210 of the Federal Highway Act of 1956, for a study to gather "information on the basis of which it may determine what taxes should be imposed by the United States, and in what amounts, in order to assure, insofar as practicable, an equitable distribution of the tax burden among the various classes of persons using the Federal-aid highways or otherwise deriving benefits from such highways." [Italic added.] The third progress report of this highway cost allocation study has been submitted to the Congress by the Secretary of Commerce and finds that "there exists a formidable array of direct and indirect benefits [again, italic added] resulting from Federal-aid highway improvements, in addition to benefits resulting from actual use of such highways *** What seems significant is that there are real and extensive beneficiary groups other than highway users as such, that reap the advantages of highway improvement; and that the total magnitude of these benefits is great." Because of the importance of the facts already developed by this study, and their essentiality to a fair determination by Congress of "an equitable distribution of the tax burden (of federally aided highways) among the various classes" of beneficiaries, we maintain that any further increase in Federal taxes on highway users should at least await the final report scheduled to be submitted on January 3, 1961. It is clear that any prior action would nullify, to a measurable degree, the results of this much-needed and long-awaited study. And while on the subject of the benefits derived from highways, we cannot overlook the fact that highways are vital to the defense of the country, as well as its economy; that it is for these reasons, among others, that Congress has always recognized the obliagtion of the Federal Government to contribute toward the cost of highways out of the general revenues. As to the defense aspect, it was Congress itself which designated the Interstate System as the "National System of Interstate and Defense Highways." Surely, in a matter of such magnitude and concern to the whole country as the pattern to be laid down for future financing of the Federal-aid highway program, Congress will be in no mood to act hastily or before it has obtained and had time to ponder carefully all essential data bearing upon the situation, including the final report of the highway cost allocation study. The present dilemma, though serious, does not, after all, constitute a crisis of such proportions as to preclude a satisfactory, temporary solution for the next year and a half, without increased taxes, pending submittal of the results of this study and the drafting of appropriate long-range plans of financing. Workable alternatives include the suspension of the Byrd amendment to the Federal-Aid Highway Act of 1956 and appropriations from general revenues. This could be done in the form "repayable advances," as authorized in the 1956 act itself, or in the form of short-term bonds chargeable against future receipts of the Federal highway trust fund. Hon. WILBUR D. MILLS, ALABAMA HIGHWAY USERS CONFERENCE, Chairman, House Ways and Means Committee, DEAR CONGRESSMAN MILLS: As chairman of the Alabama Highway Users Conference composed of some 28 highway user organizations throughout the State of Alabama, I respectfully express our organization's complete opposition to any Federal gasoline tax increases as proposed by H.R. 7963 and H.R. 7939. This organization has recently gone on record as being opposed to any increase in highway user taxes. We feel that other means of financing should be considered until such time as the highway financing study is completed. Thank you for your consideration of our viewpoint on this most important matter. Sincerely, J. ERNEST LAMBERT, Chairman, Alabama Highway Users Conference. STATEMENT PRESENTED BY HARRY J. COOL, SENIOR VICE PRESIDENT OF THE GEORGE HALL CORP. My name is Harry J. Cool. I am senior vice president of the George Hall Corp. which operates as a wholesale distributor of Standard Oil of California products throughout eight counties of northern New York, located in the Onondaga, St. Lawrence and Champlain Valleys. I am also president of the Empire State Petroleum Association, Inc., the only association of independent jobbers and distributors in the State of New York, representing that segment of the petroleum industry for the past 20 years. I am appearing before your committee in a dual capacity inasmuch as I am representing not only my company and its subsidiaries but I am also expressing the policy of our State association, the membership of which is composed of the majority of all jobbers and distributors in the State. Proposals to increase the present 3-cent Federal tax on gasoline are presently before your committee. Increases from 2 to 12 cents have been recommended. We have been told that an increase is necessary if the 41,000-mile interstate highway program is to continue without interruption. This year New York State increased its own gasoline tax to 6 cents. When we add to this the present Federal levy and think in terms of increasing this by an additional cent and a half, it seems to me we shall have come far along the road of pricing our product out of the market. I am not here to make an impassioned plea for the motorists, even though I am one myself, for I am certain you gentlemen have already heard from a number of highway-user groups throughout the country, who, I am sure, have had no hesitancy registering their opposition to a tax increase. However, may I state my firm belief that any increase in the Federal tax will adversely affect the economy of our State as well as that of the Nation. When the Highway Act of 1956 was passed, the estimate of its total cost over a 10-year period was approximately $27 billion. For a variety of reasons, we are told this original cost estimate has skyrocketed to a point where $40 billion or perhaps even $50 billion are held to be necessary to complete the program on schedule. It is indisputable that last year a billion and a half dollars from the total of $3.6 billion received from highway-user taxes were diverted to the general fund rather than being earmarked for the highway trust fund. I contend that if this money, which consists primarily of Federal excise taxes on new automobiles, parts, accessories, etc. were to be specifically earmarked for highways, an additional Federal levy might not be necessary. If it developed that these additional funds were insufficient, why wouldn't it be possible to change the timetable on the program? There is no great life-and-death urgency about rushing this superhighway to completion. Construction schedules can and should be adjusted to match the rate at which the funds are provided to pay for them. In conclusion, may I say that we oppose any increase in the Federal gasoline tax and recommend that a termination of diversion of highway-users taxes, which I mentioned earlier, and a stretchout of our highway program will prove to be a solution to our fiscal problems. May I thank you, Mr. Chairman and members of the committee, for the opportunity to present this statement. ALBUQUERQUE, N. MEX., July 2, 1959. Congressman WILBUR D. MILLS, Chairman, House Ways and Means Committee, Please insert into hearing record on proposed gasoline tax increase reiterated opposition of 26 member groups comprising the New Mexico Highway Users Conference. M. H. ROMNEY, Chairman, New Mexico Highway Users Conference. NEW HAMPSHIRE HIGHWAY USERS CONFERENCE, Manchester, N.H., July 15, 1959. Hon. WILBUR D. MILLS, Chairman, House Ways and Means Committee, DEAR CONGRESSMAN MILLS: In behalf of the affiliated organizations of the New Hampshire Highway Users Conference, and at their request, I am writing to you at this time to ask that the conference be recorded, at the public hearings your committee will conduct starting July 22, as firmly opposed to any and all proposals to increase the rate of the Federal tax on motor fuels. Respectfully yours, NATHAN A. TIRRELL, Chairman, New Hampshire Highway Users Conference. STATEMENT OF JAMES C. PARK, EXECUTIVE SECRETARY, ARKANSAS OIL DEALERS ASSOCIATION This written statement is made on behalf of the Arkansas Oil Dealers Association, which represents the petroleum industry in its governmental and public relations affairs in Arkansas, opposing further increasing the Federal gasoline tax, including comment and suggestions for alleviating the financial dilemma the Federal Government finds itself in and also including some Arkansas highway information. We wish to make it clear that we are not opposed to reasonable highway users taxes to build roads and we endorse the theory of pay-as-you-go for both State and Federal road spending. Highways are essential to the economic welfare and national defense of our Nation and, therefore, must be regarded as a continuing public responsibility. Adequate highways benefit every community and every citizen; therefore, the cost should not be considered an exclusive responsibility of the individual motorist. They should be viewed in proper relationship with other vital public tax-supported services. Our association has always advocated that sound engineering, sound financial practices, and sound management are essential elements of a good and adequate highway program. These practices eliminate bottlenecks, both physical and financial, give motorists more roads for the tax money—and most of all, help to keep tax rates within reason. We simply call attention to the grave danger of overspending anticipated high tax revenues and not receiving full value in roads for our tax dollars. Somewhere down the line, the States (at least the highway officials in Arkansas) were led to believe that the Federal Government would not run out of money to give the States for a highway program. And, of course, the present shortage in the Federal highway trust fund could have been avoided if sound procedures had been followed. In the first place, Congress should not have transferred almost $2 billion of apportionments made under previous Federal highway acts to the trust fund when it was created back in 1956. These apportionments were a proper charge against the general fund of the Treasury and were so intended to be when they were first authorized by Congress. Secondly, the Federal highway trust fund was, in our opinion, unfairly charged with supplemental highway apportionments of $1.2 billion under the 1958 Highway Act. These apportionments were intended primarily to provide jobs and to help stop the general business recession. Therefore, we submit, they, too, should be met out of the general revenues of the Treasury. The Arkansas Legislature was asked this year to increase the State gasoline tax from 6 to 72 cents per gallon in order for the Arkansas Highway Department to match anticipated future Federal funds. This bill was introduced in the senate for the highway department and on a rollcall vote there were 32 votes against with 1 vote for the bill. Yet, despite this, the Arkansas Highway Department later decided it could get along without the additional tax and proceeded to let more and bigger contracts than ever before. It now has larger monthly cash balances, which shows good fiscal practices. It, nevertheless, geared itself for the anticipated big Federal granted by securing passage of appropriation bills that almost stagger the imagination. We submit, for the record only, the following table of appropriations, actual and anticipated income and expenditures of the Arkansas Highway Department for the fiscal years 1957 through 1961: 1 1956-57 and 1957-58 are actual figures. Other years are Arkansas Highway Department estimates. As you can see from the tabulation above, we are now spending a tremendous amount of money on our State highways, and we will be spending double that amount by 1961 if we carry out the projected schedule. It seems that the question right now is the soundness of taking any more money out of the economy for roads, keeping in mind that the taxpayers have to pay for all these functions of the Government. We feel the time has come to put a ceiling on taxes so that instead of hurting the motorists, we will be helping them. No doubt Congress has similar figures from the other States. We merely call the committee's attention to this in order that it might give proper study to the actual needs as compared to the requests of the entire roadbuilding setup. We wish to point out here an on-the-spot observation-as far as Arkansas is concerned, there should be adequate funds to finance the interstate program as well as the regular Federal-aid highways within the scheduled time period without any additional highway users taxes for the Federal or State level. To further justify our contentions, the total final estimated cost of constructing the 525 miles of the Interstate System in Arkansas was $401,267,000. Total funds available through fiscal 1960 are $109,092,983, or 27.1 percent of the total program. From here on, we should see 7.7 percent of the program completed |