REPORT OF COMMITTEE ON HIGHWAY FINANCE

ONE OF THE IMPORTANT PROBLEMS OF HIGHWAY FINANCE IS TO APPORTION THE COST OF CONSTRUCTING AND MAINTAINING THE HIGHWAY AMONG THOSE WHO USE THE ROAD AND BENEFIT DIRECTLY THEREBY, AND THOSE WHO ARE BENEFITED INDIRECTLY THROUGH THE DEVELOPMENT OF THE HIGHWAY SYSTEM. ASIDE FROM THE PROPERTY TAXES, THE MOTOR VEHICLE REVENUES OF THE COUNTRY ARE RAISED MAINLY THROUGH TWO METHODS: FIRST, THE EXACTION OF A SPECIAL FEE IN CONNECTION WITH THE LICENSING OF THE MOTOR VEHICLE; SECONDLY, THE TAXATION OF GASOLINE, WHICH PROVIDES REVENUES BASED ON THE USE MADE OF THE ROADS BY MOTOR VEHICLES. THROUGH THESE TWO METHODS THE AUTOMOBILE IS CALLED UPON TO BEAR DIRECTLY A PART OF THE TOTAL COST OF HIGHWAY CONSTRUCTION AND MAINTENANCE. IN 1921 THE AVERAGE MOTOR VEHICLE REVENUES PER CAR WERE $12.20 IN 1923 THE AVERAGE WAS $14.96 PER CAR, OF WHICH 84% WAS DERIVED FROM LICENSE FEES AND 16% FROM GASOLINE TAXES. IN 35 STATES IN 1924 COLLECTING A GASOLINE TAX, ONE STATE CHARGES A 4 CENT TAX; NINE, A 3 CENT TAX; TWO, A 2 1/2 CENT TAX; TEN, A 2 CENT TAX; AND EIGHT, A 1 CENT TAX. THE TOTAL MOTOR VEHICLE LICENSE FEES AND GASOLINE TAXES, WHEN COMPARED WITH TOTAL HIGHWAY EXPENDITURES, EXCLUSIVE OF INTEREST AND PRINCIPAL PAYMENTS, INCREASED FROM 1/7 IN 1921 TO APPROXIMATELY 1/3 OF THE ESTIMATED EXPENDITURES FOR 1924. IN 1923, IN FIVE STATES THE MOTOR VEHICLE REVENUES AMOUNTED TO OVER 1/2 OF THE TOTAL HIGHWAY EXPENDITURES. THE HIGHWAY EXPENDITURE FOR THE UNITED STATES AS A WHOLE IN 1921 AMOUNTED TO $9.00 PER CAPITA, THIS EXPENDITURE BEING BETWEEN ONE AND TWO PERCENT OF THE TOTAL INCOME OF THE PEOPLE OF THE COUNTRY FOR THE YEAR. TO DETERMINE THE EQUITABLE APPORTIONMENT OF THE HIGHWAY FINANCE BURDEN, THE FOLLOWING FURTHER INVESTIGATIONS ARE NEEDED: DETERMINATION OF THE AMOUNT OF PERSONAL TAXES LEVIED ON MOTOR VEHICLES BY THE VARIOUS STATES; THE EFFECT ON ADJACENT FARM LAND VALUES OF CONSTRUCTING IMPROVED AND HARD SURFACED ROADS; COLLECTION OF DATA GIVING THE RELATION BETWEEN MOTOR VEHICLE MILEAGE OCCURRING ON CITY STREETS AND THAT ON RURAL HIGHWAYS; DETERMINATION OF EQUITABLE APPORTIONMENT PRINCIPLES ARE APPLIED TO THE DISTRIBUTION OF THE MOTOR VEHICLE LICENSE FEES AND GASOLINE TAXES.