be too low), and if it is assumed that traffic will grow only about 4 percent per year thereafter (which may be less than is needed for a high employment economy during these years), he believes revenues should exceed these official projections very nicely.

Should this committee decide that only the $501 million referred to earlier should be returned to the trust fund and if the fund's income in fiscal 1960 approximates $2,190 million, as Dr. Newcomb believes it will, it would leave $3,214 million available for expenditure. The Secretary of Commerce estimates outlays at $3 billion. This would leave a balance of about $212 million on hand June 30, 1960. Income in fiscal 1961 should approximate $2.27 billion. This would provide nearly $2.5 billion in cash. The official estimates of costs run just over $2.71 million, which would cause the fund to show a slight deficit of $229 million in fiscal 1961. Revenues should nicely exceed costs in fiscal 1962 and 1963, creating a balance of $746 million by July 1963.

Should this committee decide that the $501 million not be returned and left in the general fund, and should expenditures in fiscal 1960 equal the estimates presented by the Secretary on the assumption that allocations to the States would be forthcoming by July 1, then the total funds available might run short by $289 million. A shortage of this amount might occur, however, whether funds are allocated or not, as allocations available in July do not result in contracts for sometime and actual claims against the trust fund are not made on the average for about 18 months.

When the highway trust fund was established it included a declaration of policy which I would like to quote at this time:

(b) DECLARATION OF POLICY.-It is hereby declared to be the policy of the Congress that if it hereafter appears

(1) that the total receipts of the trust fund (exclusive of advances under subsection (d)) will be less than the total expenditures from such fund (exclusive of repayments of such advances); or

(2) that the distribution of the tax burden among the various classes of persons using the Federal-aid highways, or otherwise deriving benefits from such highways is not equitable.

The Congress shall enact legislation in order to bring about a balance of total receipts and total expenditures, or such equitable distribution, as the case may be.

If this committee decides against returning the $501 million I strongly recommend that you adopt the following solution. Increase the motor fuel (gasoline and diesel) tax one-half cent per gallon and credit the unallowed for growth in vehicle excises to the trust fund. This is shown as plan II in enclosure (b). (The enclosure referred to follows:)

1

Highway trust fund prospects, probable revenues, and outlays by fiscal years [In millions of dollars]

PLAN I. RETURN OF $501,000,000 TO TRUST FUND

Highway trust fund prospects, probable revenues,1 and outlays by fiscal years—

Continued

[In millions of dollars]

PLAN II. INCREASE FEDERAL MOTOR FUEL TAX BY 2 CENT AND CREDIT SURPLUS EXCISES TO TRUST FUND

PLAN III. INCREASE FEDERAL MOTOR FUEL TAX 1⁄2 CENT ONLY

PLAN IV.-CREDITING SURPLUS VEHICLE EXCISE TAXES TO TRUST FUND ONLY

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