bids of $6,800,000 worth of construction. Only a year or so ago we were working under pressure to get funds obligated that were authorized by Congress to help turn the recession then of concern throughout the country. We met this challenge and achieved the goal. Now we are faced with shutting down about five times as much work as was started during that emergency period. There can be no question about the resulting economic effects. There can be little wonder that many feel we don't know where we are headed in the highway program. We have felt it necessary in the light of this development to inform the contractors of the above projects that they may proceed with the full understanding that it may be necessary for the road commission to order to halt in their construction at any time. We have also found it necessary to practically discontinue all right-of-way procurement in order to obligate as little of the available funding as possible. The attached sheet, "Estimated Financial Position as of September 30, 1959," indicates a financial position that is most untenable. As of September 30, we will have obligations in the form of construction contracts and our own personnel for operations and maintenance amounting to some $24 million. To liquidate this obligation we will have only $4 million of our own State money. Thus, if we have no indication of what Congress intends to do within the next 10 days or 2 weeks we must of necessity close down virtually all construction of roads in the State. The attached list shows the projects that will be affected. Several of the contractors have expressed confidence that Congress is well aware of the position in which all these matters place our road building program and feel sure that some remedial legislation will be enacted. On the basis of this faith, they have suggested to us that we go ahead with normal planning, designing, advertising, and awarding of contracts. Our responsibility to the citizens of the State, however, precludes the possibility of adopting this suggestion since any small chance of failure on the part of Congress to act favorably would essentially bring us to a bankrupt situation, completely unable to meet our contractual obligations. The Bureau of Public Roads is not party to any of these contracts for construction and the obligations to pay them rests solely with the State road commission. To be sure the Bureau of Public Roads officials are sympathetic, but they of course are bound by the acts of Congress. Sympathy does little to pay off contractual obligations. However, as a demonstration of our faith in both the validity of the highway program and congressional responsibility toward it, our planning and design departments are continuing on schedule in the preparation of plans to be ready for advertising the minute funds are available. As already pointed out, the aspect of all this jockeying back and forth on funding that concerns the road commission immediately is that it all comes during the time of year when the weather is most advantageous for construction and we would normally be accelerating rather than halting the awarding of contracts. It cannot help but be a breeder of bad publicity and poor public relations for all agencies associated with the highway program. There is one other item we must bring to your attention. Mr. Johnson refers to it in his letter (copy attached) as the "Contract Authority-Reimbursement Assurance" provision. The language in the 1960 road appropriation act as interpreted by Mr. Tallamy would mean that approval of our contracts by the Bureau of Public Roads would not necessarily mean that money was set aside to meet our vouchers as has been the case since the beginning of our joint functions many years ago. This would obligate the road commission for all of its available moneys with nothing available for quite some time to handle maintenance and budgeted functions of the commission. We feel very strongly that a reappraisal must be made of this facet of the legislation. There is no apparent reason discernible to us why the previous method of handling this matter cannot be continued to the mutual benefit of the Bureau of Public Roads, the road commission, and thus to the public in general. The very fine job you are doing in our behalf is very much appreciated. ELMO R. MORGAN, Director of Highways. EFFECT UPON THE STATE ROAD COMMISSION OF UTAH AND THE FEDERAL AID INTERSTATE PROGRAM IF INTERFUNDING IS SUSPENDED FOR FISCAL YEAR 1959-60 The planning and programing department of the State road commission has indicated that anticipated Federal funds available for construction and engineering on interstate projects from July 1959 to June 1960 are $24,500,000. If these funds are suspended to any degree, the calculations of the total effect on our operations would be based on the following considerations: (a) One man can design $400,000 on interstate projects in 1 year-60 percent for roadway design, 40 percent for structural design. (b) The construction department anticipate the use of 150+ men on survey crews for proposed and planned interstate construction. Based on the foregoing assumptions a 25-percent reduction in funding would result in an approximate layoff in the 3 departments (highway design, structural design, highway construction) of 52 men. A 50-percent reduction in funds would mean a layoff of 106 men. A 100-percent reduction of funds would mean a layoff of 211 men. In addition to the primary effect on these three departments the commission would also suffer a secondary reduction in operating personnel over the total commission of a number difficult to estimate (total employment as of March 1, is 1,428). As indicated by the attached sheets of "A Tentative Financial Guide for Completion of the Interstate System in Utah," these portions of 1-15 that will serve to put in operation the sections of highway already under construction; i.e., 14th North to 1st South in Salt Lake and 16th North to 16th South in Orem, will be directly affected. This will leave an investment of $7,815,000 the first project, and $4,500,000 second project, sitting idle and unusable until the resumption of funding permits the construction of the connecting link to 24th South in Salt Lake and the connecting links to Provo and Lehi in Utah County. Other considerations involve the fact that nearly all contractors engaged in roadbuilding operations have anticipated this volume of construction and have correspondingly increased their staffs and have made equipment purchases of prime earthmovers, gravel crushers, and paving machines; all of which would cause a tremendous financial burden if funding were reduced, temporarily suspended, or discontinued. List of projects that will be affected by funding suspension List of projects that will be affected by funding suspension-Continued State Road 80 North to Alpine.. East American Fork to junction, to west State road 146_ 18, 821 Urban: 13th south to Simpson Ave. on 7th east SLC, subtotal__ 188, 484 2,262, 225 214, 039 29, 908 6, 835 378, 100 142, 590 4th South Main to 9th East, Salt Lake City-. 9, 677 Crescent Junction to Valley City to Moab--- 22, 683 62, 929 194, 355 75, 061 61, 013 Sunnyside Junction to Emery County line.. 53, 899 45, 028 17, 461 OFFICE MEMORANDUM, STATE ROAD COMMISSION OF UTAH To: Elmo R. Morgan, Director of Highways. JULY 21, 1959. Fund available Sept. 30, 1959, if we continue as planned at present: Cash balance as of July 1, 1959- Revenue from Bureau of Public Roads, July 1, 1959, to Sept. 30, 1959 Additional revenue (other than Federal). Estimated gas money, July through September_. Total revenue.. Estimated expenditures, July 1, 1959, to Sept. 30, 1959: Federal construction_.. State construction_. Budget_. Noncontract items_ $378, 253 19, 856, 360 140, 000 4,851, 874 25, 226, 487 17,445, 255 1, 414, 091 2,232, 950 238, 972 21, 331, 268 Total expenditures__ Cash position, Sept. 30, 1959__-. 3, 895, 219 LIST OF PROJECTS THAT WILL BE AFFECTED BY FUNDING SUSPENSION (THOSE From near the Utah-Wasatch County line northerly for 3.1 miles__ Roosevelt and Duchesne, on U.S. 40 from Roosevelt easterly to the Uintah River-on State Route 88, junction of U.S. 40 to Fort Duchesne__ 2d west to State St. on 4th south Nine east to Hemstead Road-13th E St. from 4th to 6th south_ Interstate: Interstate Highway 15 from 18th to 28th in Salt Lake Delle Toward Knolls_._ Between Pintura and Anderson's Junction_. Between Howell and Blue Creek_ Secondary: State Road 21, Beaver southwesterly 10.6 miles toward Junction of State Route 22 and State Route 62, northerly to- Total---- $1, 268, 743. 42 658, 146. 99 436, 505. 85 876, 937.09 493, 908. 64 2,814, 112. 41 14, 631. 71 45, 270. 91 38, 406. 50 383, 545. 23 206, 748. 52 7,236,957. 27 HAWKEYE OIL CO., INC., Marshalltown, Iowa, July 30, 1959. Subject: Federal motor fuel tax, H.R. 1343 (Schwengel bill), H.R. 1253, S. 1083 (fair trade). HOUSE WAYS AND MEANS COMMITTEE, U.S. Congress, Washington, D.C. GENTLEMEN: May this letter serve to inform you that, as a petroleum jobber, I am very strongly opposed at the present time to any increase in the Federal motor fuel tax imposed upon the sale of gasoline, diesel fuel, and special motor fuels. I am convinced that a substantial part of the motor fuel tax moneys has been detoured from use in the Federal highway program to defray expenditures as general fund, for which some other kind of tax revenues should be used. In my opinion, the motoring public should not be penalized for this misuse, at least in part, of motor fuel tax money. Furthermore, I feel that such an increase n the Federal tax on gasoline would be detrimental and work a hardship on my business by absolutely destroying the incentive for the average consumer to buy and use gasoline for pleasure driving. If, however, irregardless of my objections, there is an increase in the Federal motor fuel tax, then I feel that it is imperative that such a bill providing for tax increase include the provisions of the Schwengel bill (H.R. 1343), 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. Also, I wish to make known my objections to two fair trade bills, namely H.R. 1253 and S. 1083. I feel that the passage of either of these bills can only mean higher prices for consumers, and, rather than subjecting me, as a petroleum distributor, to Government control, would in reality subject me to complete price control by my supplier, a large integrated oil company. Therefore, I urge you to vote against these bills. Please include this letter in the record of the hearings on these issues. Thank you for your consideration. Sincerely, F. A. BOGAERT. ELMIROL CORP. Elmira, N.Y., July 16, 1959. Hon. WILBUR D. MILLS, Chairman, Ways and Means Committee, DEAR SIR: As a local gasoline distributor in New York State we would like to state that we are strongly opposed to any increase in the Federal gasoline tax at this or any other time. Taxes on gasoline at present constitute 30 percent of the retail price in retail stations. We have been the victims of an unprecedented 50-percent increase in State taxes already this year. Any further increase which has to be passed on to the ultimate consumer will seriously affect our area economy. Consumers will use less gasoline and thus will remain at home, rather than ride the new highways under construction. Will not your very purpose of highway con struction then be defeated? We strongly urge that an alternative for funds can be found in economizing in Government operations. Perhaps the Air Force Academy can do without thousands of dollars of new curtains; perhaps congressional junkets can be cut to a minimum (including visits to Russia); perhaps price supports to marginal industries can be removed; perhaps your Government payroll could be reduced by reducing the number of employees and increasing the efficiency of the existing output. As We are an independent distributor who would like to stay in business. you increase your taxes, you are necessarily reducing our margin (pennies per gallon) and public consumption. As we see it, if this procedure continues, you will eventually push the small man out of business. We can then point to Government and say that our own representatives caused our business to collapsea sad commentary about elected officials. We would like this letter to be made a matter of record for the hearings scheduled for July 22, 1959. Very truly yours, R. W. CORNELL, Secretary. |