STATEMENT TO COMMITTEE HEARING IN WASHINGTON, D.C., JULY 22, 1959, ON FINANCING THE HIGHWAY CONSTRUCTION FUND Hon. WILBUR D. MILLS, CITIZENS' NORTHWAY COMMITTEE, Chairman, Ways and Means Committee, House Office Building, Washington, D.C. DEAR MR. MILLS: The present furor about lack of funds for the interstate and defense highway program leads to the question whether present expenditures and future plans for construction are reasonable, or whether these have been diverted to purposes other than those originally planned. If events in New York State are typical of the administration of the highway program, hundreds of millions of dollars are being spent to duplicate facilities in locations unsuitable for defense purposes and not connecting industrial centers. Specifically, Interstate FAI 502 would duplicate facilities already provided by U.S. Route 9 for tourists. Plans for FAI 502 also shun the industrially attractive Champlain Valley, and are not in accord with the Bureau of Public Roads report "Highway Needs for Industrial Defense" which states the highway program should contribute to the "development of one of the most important assets in deterring aggression-industrial capacity." Attempts to get the Federal Bureau of Public Roads to intercede have shown them to be fully dependent on the New York State Department of Public Works for information, and the NYSDPW brushes aside the Champlain route. The facts show the alinement selected by the NYSDPW does not best meet the lawful purposes of the Interstate and Defense Highway System. In support of their plan to duplicate the existing tourist highway with an additional tourist highway, this department contends that the route they selected through the Adirondacks is less costly; that the traffic count through the mountains is heavier; and that the Champlain Valley route would siphon tourists into Vermont. We would like to comment briefly on each of these points. Regarding cost; the NYSDPW has made nothing more than a superficial surFederal gasoline tax. Believing that the trust fund originally set up is adequate built on this alinement to interstate standards for a cost difference of 10 percent; $114 million for their mountain route versus $125 million for the Champlain Valley route. About half of the cost difference is for structures over the more numerous highways and railroad crossings in the more populous valley. Length, and costs of land acquisition estimated for the two routes are acknowledged by the NYSDPW to be essentially equal. In view of the DPW's meager investigations, it seems incredible that they would place such importance on a 10 percent difference in preliminary estimates, particularly since one section near Glens Falls was recently contracted for at approximately 60 percent of the final estimate after survey and design were completed. Regarding traffic counts, the NYSDPW draws the absurd conclusion from traffic counts, that the Northway, FAI 502, should parallel modernized U.S. route 9 through the Adirondacks because drivers prefer it to obsolete State Route 22 in the Champlain Valley. This valley has no road comparable in quality to U.S. 9 through the Adirondacks, therefore traffic from Albany to Montreal has no choice and will go via U.S. Route 9. Thus, the traffic count comparison offered by the New York State DPW as favoring the mountain route offers no reasonable basis for a decision on location of the Northway. Regarding siphoning tourists into Vermont, the claim by the NYSDPW that tourists may escape to Vermont via the Champlain Valley route reveals the DPW's true reason for selecting the Adirondack route. The lawful purpose of FAI 502 is to connect New York State capital district with the Strategic Air Command at Plattsburgh and the Canadian border on a route that will best serve the people of the United States. As a practical matter, construction has proceeded to an extent that diversion of this highway through Vermont would be extravagant and add needless mileage. The Champlain Valley route for FAI 502 is superior to the Adirondack route on nearly every count. Three major advantages are: First, as a defense highway, the Champlain Valley Northway in conjunction with U.S. Route 9 would provide two separate major routes connecting Albany, the Strategic Air Command at Plattsburgh, and Montreal. However, the proposed Adirondack Northway would parallel U.S. Route 9 so closely that the two would in effect be only one route. Second, U.S. Weather Bureau records show the valley has definitely milder winter weather, with less snow and ice. This milder climate means safer, more dependable travel with less maintenance. Third, and most important, the Champlain Valley route will encourage industrial development of the valley. Some defense industries are already located there, including papermills and a large iron ore processing plant. However, the New York State Department of Commerce has pointed out that— “*** While the New York shore of Lake Champlain has many positive attractions for industry, one of its major drawbacks is remoteness from prime markets. Most of the industries interested in this region are light industries. They depend primarily on truck transportation to reach their markets. Lack of a high-speed highway servicing the shore area has kept several such industries from locating in the Champlain shore area. Most of the industries with which we have worked have located in other areas that provide quick and economic access to major metropolitan regions to the south." We believe that no additional road taxes should be levied on the citizens of the United States without closer safeguards on location of the highways in order to insure that original objectives for this multibillion dollar expenditure will be met, and that money is not wasted on parallel roads having limited seasonal use. HONORABLE SIR: The proposed increase in Federal gasoline tax will impose further burdens upon the service station operators in New York City. Federal and State taxes in New York State are now 9 cents per gallon, or almost 36 percent of the wholesale price to the dealer. Since March 1, when the New York State tax was increased 2 cents per gallon, service station dealers in our city reported an imediate drop in business of approximately 10 percent. This represents a very substantial loss to us small businessmen. How great an additional loss in business can we look for if the Federal tax is again increased? We have as yet had no relief from losses which we suffer each year on the 3 cents in Federal gasoline tax we now pay, which arises through taxes uncollectible because of shrinkage, handling, evaporation, and bad debts. This will also be further aggravated should the tax be increased. We ask that our association be placed on record as opposed to any further increase in the Federal gasoline tax. Most respectfully yours, BENJAMIN SCHLEIER, President. GEORGIA ASSOCIATION OF PETROLEUM RETAILERS, INC., Chairman WILBUR D. MILLS, Committee on Ways and Means, House of Representatives, Washington, D.C. Decatur, Ga., July 14, 1959. DEAR MR. MILLS: GAPR request that its protest on behalf of its 3,600 paid members of Georgia be officially recorded in the hearing scheduled for July 22 relative to any proposed increase in gasoline taxes. In accordance with letters from this association to all Georgia Members of the House of Representatives we request that the facts contained in a copy attached also be recorded in the minutes of the hearing on this subject. Respectfully, MILTON F. ALLEN, Executive Secretary. GEORGIA ASSOCIATION OF PETROLEUM RETAILERS, INC., Hon. ERWIN MITCHELL, DEAR SIR: This association urges immediate use of your influence to oppose any compromise contemplated by the House Ways and Means Committee that would result in an increase in taxation on gasoline. This association speaking for its 3,600 members in Georgia vigorously oppose any additional Federal tax hike on gasoline. Respectfully, Congressman WILBUR D. MILLS, House Office Building, Washington, D.C.: H. FRANK BERRY, President. PROVIDENCE, R.I., July 27, 1959. The Oil Dealers Association of Rhode Island, Inc., representing retail fuel oil dealers in Rhode Island, wish to be recorded as opposing any increase in the Federal gasoline tax. We respectfully request you to oppose any proposed increase in a tax which combined with the State tax now totals nearly 50 percent of the retail price of the product. WALTER J. HERNANDEZ, President, The Oil Dealers Association of Rhode Island, Inc. NEW JERSEY GASOLINE RETAILER'S ASSOCIATION Mr. WILBUR D. MILLS, AND ALLIED TRADES, INC., Chairman, House Ways and Means Committee, Washington, D.C. DEAR MR. MILLS: My name is John Dressler. I am executive secretary of the New Jersey Gasoline Retailer's Association with headquarters at Marlboro, N.J. I want to record with this committee the opposition of the New Jersey Gasoline Retailer's Association to any additional taxes on gasoline. The motorist in the State of New Jersey is now paying approximately a 45 percent sales tax when he purchases gasoline. This percentage is determined by the fact that regular gasoline, which is by far the largest seller, is now posted at an average of 26 cents per gallon and the State and Federal taxes equal 8 cents per gallon. When all the taxes imposed on the motorist are added together, they represent a burden far in excess of any other taxpaying group, and it is our belief that any further taxation on this commodity will cause it to be priced out of the motorist's reach. This overtaxation of a single commodity such as gasoline is destructive and demoralizing to an industry that has served the motorist well. While the cost of living has risen considerably in the past 10 years, the actual price of gasoline to the motorist has gone down but the constant increase of taxes leads the motorist to believe that the gasoline retailer is making high profits. We sincerely hope that your committee will not permit the increase in gasoline taxes as presently proposed. The following telegrams have been sent to all Congressmen from the State of New Jersey. Very truly yours, JOHN DRESSLER, (The following letter was received and forwarded for inclusion in record by both Hon. Hubert H. Humphrey, Senator from the State of Minnesota, and Hon. Fred Marshall, Congressman from Minnesota :) KOPPLIN OIL CO., Litchfield, Minn., July 17, 1959. I understand that hearings will soon be held in the Ways and Means Committee on the subject of providing financing of the Federal highway program. The reasons that we oppose any increase in gasoline tax are many, and I feel sure that you have heard them all, so I will not impose on you by enumerating them further. I wish you would oppose any increase in tax as gasoline now carries over 60 percent of the cost of the product. From what I have read on the subject it appears that, in spite of widespread objections, there may be some increase. If that is inevitable, we wish you would support the inclusion of the provisions of the Harrison bill (H.R. 101), which would change the level of imposing the gasoline tax from the time of sale by the manufacturer to the time of sale by the wholesale distributor, in any final financing bill. Thanking you for your consideration of this request, and with best personal regards, I am, Yours truly, E. H. KOPPLIN. (The following communication for inclusion in the record was received by Hon. Glenn Cunningham, Congressman from the Second District of Nebraska, and Hon. Donald F. McGinley, Congressman from the Fourth District of Nebraska :) NEBRASKA PETROLEUM MARKETERS, INC., Lincoln, Nebr., July 15, 1959. The enclosed article is an editorial which will appear in the July issue of the Nebraska Oil Jobber, the official publication of the Nebraska Petroleum Marketers, Inc. It supplies much food for thought concerning financing of the Interstate Highway System and it is with that thought in mind that the article is being sent to you. I would also like to point out that Nebraska has $61 million as of May 31, 1959, in Federal highway moneys that is unobligated and unprogramed. This is by no means a situation unique to Nebraska. All other States are in the same category, as no State has ever matched all its Federal-aid allotments. Since the 1956 Highway Act anticipated a shortage of funds in 1960, and thus provided for this shortage by permitting a repayable advance from the general fund, it is beyond the comprehension of this writer how the same legislative body could now use this same argument to add additional inflationary taxes onto an already overtaxed commodity, just because it is easy to sell to the consuming public. I am, today, representing the nearly 1,000 oil jobbers in Nebraska who, through no fault of their own, must pay in advance to their suppliers, who are in direct competition with them, the Federal gasoline tax of 3 cents per gallon. These same suppliers have, in turn, 90 days to pay the U.S. Treasury. Consequently, a 1-cent increase on top of the already 3-cent Federal gasoline tax would mean you are imposing on this small businessman a 33%-percent increase in capital outlay of Federal tax he must pay to run his business, in direct competition with the giant oil companies who not only have the use of his money for 90 days but will not be hit by this increase of capital outlay. I ask you, Is this good legislation? We intend to publish a copy of this letter in the next issue of the Nebraska Oil Jobber along with comments to your replies thereto. Very truly yours, GEORGE L. WATTERS, Secretary. There has been a lot of political, fiscal and publicity hocus-pocus out of Washington about the shortage of money to keep the interstate highway construction going ahead at full steam. The Washington bureaucrats rent the air with loud wails about the highway trust fund being depleted, but nary a one will refrain from bellyaching long enough to give the public the facts. The highway trust fund was created by Congress in 1956. Federal taxes on gasoline, diesel motor fuel, tires, tubes, retread rubber, trucks, buses, trailers, and the truck-use tax were poured into the fund from which expenditures were to be made for Federal-aid highway construction and for no other purposes. From the effective date of the law to June 30, 1958, more than $3%1⁄2 billion was dumped into the fund. Wouldn't it be lovely if the Washington bureaucrats would tell the suffering taxpayers where the $3 billion went? For instance, how many millions or hundreds of millions-went to consulting engineering firms and for reimbursing public utilities for moving their wires, poles, or pipes from highway rights-of-way which they have been using rent free for years on end. What are the reasons for the deficit in the highway trust fund? For some strange reason the causes have not been fully revealed to the public. Since June 30, 1956, millions in tax dollars have been poured into the fund daily. The first charge against the fund amounted to nearly $2 billion. This mere trifle was set aside to meet the demands from the various States on their unmatched and unobligated Federal-aid highway funds dating, in some cases, as far back as 1916. This charge was a pure and simple move to relieve the general fund of an obligation of this amount. The Congress not only permitted this budget-juggling move, it suggested it. The 1956 Highway Act was drafted and enacted into law with the clear knowledge that the receipts of the highway trust fund would be insufficient to meet expenditures during the early years of the authorized highway building program. The House committee report stated that this condition would exist in the period 1960-68 and that repayable advances would have to be obtained from the general fund. The highway trust fund was not designed with the idea of being able to support the intended program on a pay-as-you-go basis. The law specifically provides that the fund may borrow from the general fund to insure the keeping of the highway building program on the intended schedule. And to guarantee that the general fund would be reimbursed for all such borrowings the excise taxes were imposed for a period of 3 years after the program was completed. Congress anticipated the current deficit in the highway trust fund and made provisions for short-term borrowing from the general fund. Why then does the administration demand an increase in the Federal gas tax instead of following the law? And why don't Members of Congress read at least some of the laws they have passed? The answer is simple. It's easier to hang more gas tax on the meek, docile, and gutless owners of motor vehicles. HOUSE OF REPRESENTATIVES, Mr. WILBUR D. MILLS, Chairman, House Ways and Means Committee, DEAR CHAIRMAN MILLS: The attached communication from R. H. Tallman, of the Tallman Oil Co., Fargo, N. Dak., arrived in my office this morning, and I am sending it on to you with the request that you bring Mr. Tallman's views on the Federal gasoline tax to the attention of the members of your committee when considering relevant legislation. Mr. Tallman has requested that his letter be made a part of the hearings, and I hope that it will be possible for you to include his communication in your committee record. With kindest regards, I am DON L. SHORT. TALLMAN OIL CO., Hon. DON SHORT, Fargo, N. Dak.-Moorhead, Minn., July 23, 1959. Representative from North Dakota, House Office Building, Washington, D.C. DEAR DON: I am writing to you at this time to express my views on the subject of increasing the Federal gasoline tax. I am opposed to the increasing of this tax for several reasons, and among them the following: 1. The taxing of gasoline and diesel fuel has long been a taxing power of the States. The Federal Government with the present 3-cents-per-gallon tax has already infringed too much on this source of revenue. 2. I am advised that of the total gasoline and diesel tax now collected, plus the excise tax on automobiles and on tires, that only 58 percent of this total revenue is now channeled into the highway program. It's obvious that if the balance of this tax revenue or even a part of it was channeled into roadbuilding, no increase in fuel taxes would be necessary. |