HIGHWAY FINANCING AND THE INTERSTATE SYSTEM

This article discusses highway financing. It notes that the Federal Aid Highway Act of 1956 established the highway trust fund and raised some procedural questions regarding financing laws. The Act increased the federal gasoline tax to three cents, and the tax on buses, trailers and trucks was increased to 10%, with half of it earmarked for highway use. The tax on automobile tires was increased to 8 cents a pound, and all of that revenue was to go to highways. In addition, the effects of design, construction and maintenance of highways on various entities was to be investigated and studies. The article also describes state and local government financial situations regarding highways, the bond market, and the pay as you go principle.