Mr. BURNSIDE. I would not even mind adding the tax in on the roads. Mr. DEMPSEY. What objection do you have to people who have money desiring to be patriotic and buying Federal bonds? Mr. BURNSIDE. I would be glad to have them do that on State savings, but that is a quarter of a percent less. Mr. DEMPSEY. If it is necessary to increase the national debt? Mr. DEMPSEY. Do you think it is more necesary than saving the lives of people on our highways? Mr. BURNSIDE. Not by any means. Mr. DEMPSEY. Your good friend from New Mexico-and he is a good friend of yours, Doctor-is sorry you do not have more facts. Mr. BURNSIDE. I would not mind borrowing it directly, if you are borrowing, and saving one quarter of a percent interest. Mr. FALLON. We have 5 more minutes left. If the members would use that on the witness so that he can get back to California and build greater and safer highways, we would be better off. Mr. BURNSIDE. That is all. Mr. FALLON. Mr. Bush, do you have any questions? Mr. BUSH. What is your State gasoline tax in California? Mr. MACDOUGALL. Six cents. It was recently made permanent at that new rate, just a few weeks ago. Mr. BUSH. You mean it was increased? Mr. MACDOUGALL. It was increased 2 years ago on a temporary basis and was due to expire this year if it were not shown that the highway construction needed the extra amount of 12 cents and had not proven the worth of the increase. It was virtually a unanimous and immediate action by the legislature when it convened, to make that permanent. The construction has shown the worth of the program. Mr. BUSH. That is all, Mr Chairman. Mr. FALLON. Mr. Hull. Mr. HULL. No questions. Mr. FALLON. Mr. Schwengel. Mr. SCHWENGEL. Yes. You pay 6 cents gasoline tax. How much licensing fee do you charge? Mr. MACDOUGALL. The State of California has a rather peculiar system. Motor vehicles are exempt from the personal property tax by virtue of a special act of the legislature. There is a fee in lieu of the personal property tax, collected from all automobile owners, which is a substantial amount. It is probably more than the cities and counties would collect. That money is divided between the cities and counties and that goes back to them. Our license plate and registration fee is in addition. It is a nominal amount. It is seven or eight dollars now. Mr. GEORGE. Do you have any diversion of that license fee money? It does not go on roads, does it? Mr. MACDOUGALL. It is certainly a key question. It goes back to the counties as general fund money because it would have been property tax money had the tax been levied. The counties are free to use it where the need is greatest. So, it is certainly a pretty good key as to what happens to that money to show what our road needs are. Approximately one-half the money is allocated to the highways. The other half varies from county to county. We check every year on what happens. One half goes back directly into additional highway work and the other half goes into the general fund. Mr. GEORGE. Do you have any diversion of your gasoline tax? Mr. MACDOUGALL. Not one cent. I think we have the tightest antidiversion clause of any constitution of any State. It is extremely rigid. Mr. DONDERO. How much would be the tax on an ordinary automobile costing $3,000? Your registration is nominal you say, but you have a tax on the vehicle itself. How much does that amount to in your State? Mr. MACDOUGALL. The first year it is bought it would amount to something like $75. It would be scaled down in a table contained in the law which is basic on the average depreciation, to the point where somtime in the future, if you kept the car long enough, you would be paying only $9 a year. But the average automobile owner, with a new car, is paying $40 to $60 a year; and on an expensive car over $100 the first year. Mr. SCHWENGEL. That is actually a property tax. Mr. MACDOUGALL. Yes. Mr. SCHWENGEL. My question is, What is the license fee on a 1951 car? Mr. MACDOUGALL. You mean just the so-called plate fee? Mr. SCHWENGEL. Yes. Mr. MACDOUGALL. That has been raised from $6 to $7.50. I am not exactly sure, but it is in that neighborhood. Mr. SCHWENGEL. Is that money all used for roads? Mr. MACDOUGALL. Oh, yes, sir. I should say it is. Mr. SCHWENGEL. Has it been divided on any formula basis between primary and secondary? Mr. MACDOUGALL. No. A portion gos to the local governments, but in general it goes into the State highway allocation formula which is an extremely complicated thing and reminds one of the method in which they distribute the proceeds of horseracing bets. It is a long involved mathematical equation, but it does bring equity at the end of the distribution. Mr. WRIGHT. I want to compliment Mr. MacDougall on his excellent statement. I do not have any question to ask at this time. Mr. FALLON. Are there any other questions by any of the members? (No response.) Mr. FALLON. Thank you very much, Mr. MacDougall, on behalf of the committee for your fine presentation. The committee will adjourn until 10 o'clock tomorrow morning. (Whereupon, at 12 o'clock noon the committee adjourned until 10 a. m. the following day, Wednesday, April 27, 1955.) 63235-55- -17 NATIONAL HIGHWAY PROGRAM WEDNESDAY, APRIL 27, 1955 HOUSE OF REPRESENTATIVES, The committee met, pursuant to adjournment, at 10:15 a. m., in room 1302, New House Office Building, Hon. George H. Fallon presiding. Mr. FALLON. Ladies and gentlemen, the hearing this morning is a continuation of the hearings on H. R. 4260. Our first witness will be Mr. A. B. Gorman. Mr. Gorman, would you give the reporter your full name and your title and occupation, please? STATEMENT OF ALLAN B. GORMAN, PRESIDENT, PRIVATE TRUCK COUNCIL OF AMERICA, INC. Mr. GORMAN. Allan B. Gorman. I am employed by Esso Standard Oil Co. of New York. Mr. FALLON. Mr. Gorman, I understand you have a prepared statement. You can either read the full statement or give us the highlights of it, and we will include it in the record. Mr. McGREGOR. May I inquire, Mr. Chairman? Mr. FALLON. Mr. McGregor. Mr. MCGREGOR. Are you appearing as a witness representing the Truck Council of America or Esso Standard Oil of New York? Mr. GORMAN. The Truck Council of America, Mr. MCGREGOR. But you are employed by Esso Standard of New York? Mr. GORMAN, That is correct. Esso Standard Oil Co., with headquarters in New York. Mr. FALLON. Mr. Gorman, you can either read your complete statement or give us the highlights of it. Mr. GORMAN. I would prefer, if it is all right with you gentlemen, to read the statement. Mr. FALLON, Go right ahead, Mr. GORMAN, I would like to thank the committee for the privilege of appearing here today and setting forth the views of the Private Truck Council of America, Inc., on the highway question to be discussed on this occasion, GENERAL REVENUES VERSUS FEDERAL AUTOMOTIVE EXCISE TAXES The first item in H. R. 4260 and identical bills I would like to discuss occurs in section 2. In that section it says: It is hereby declared to be the national interest to foster and accelerate the development of a modern, adequate, safe, and efficient system of highways deemed essential for the expansion of the economy and the changing concepts of the military and civil defense of the United States. It is hard to imagine a statement that more nearly indicates the interest of the average citizen in a highway program. The development of this modern, adequate, safe, and efficient system of highways is described as essential for the expansion of the economy and the changing concepts of the military defense. All citizens, therefore, have a monetary interest in it and a security interest in it. As a proposal which has such vast coverage that every citizen is affected, then it is obviously more than a particular matter just for the highway user. Certainly he must pay for the benefits of the use of it, but the bill states it has economic and security values for everyone, and therefore, whatever money is spent on it by the Federal Government, should come from general revenues of the Federal Government and not, as proposed, specifically from Federal automotive excise taxes. THE 48 STATES BUILT THE BEST HIGHWAY SYSTEM IN EXISTENCE Is it necessary in order to keep our highway system modern, that we call upon the Federal Government to assume so much responsibility for highwyas as this bill requires? Let us examine the record. The highway system of the United States was built by the 48 States with some help from the Federal Government. There has been a great deal of talk going around in the last 2 years about the inadequacies of our highway system. True, there is congestion in spots. True, also, that many of our highways need to be replaced or modified, but nevertheless, it is without the remotest challenge, the greatest highway system the world has ever known. Roman roads were superior to ours in durability and load-carrying capacity, but our system from the point of view of service to a population over a vast area is incomparable. This system of highways was built by the States with Federal aid in the short span of 35 years. Total investment for highways for the years 1921 to 1953, inclusive, was about $48 billion, of which the Federal Government, exclusive of WPA and PWA, contributed about $7 billion. In addition, the States and their subdivisions have spent about $30 billion for maintenance. So, while the Federal Government contributed about 15 percent of the investment, our system of highways has been built and maintained by State, city, and county governments. They have shown that they can decide what they want and generally have been willing to provide the funds to pay for what they want. Certainly, if we are to get the best value for the money we spend on highways, the situation should be left pretty much as it is. We can get the most for our money when the people who are going to use the roads either for local or State use for ingress and egress, and who are going to pay for the roads, do the spending and the building. Mr. McGREGOR. Mr. Chairman, I am wondering, do we get the opportunity to ask questions now? I would like to ask a question at that particular point. Mr. FALLON. I think it might be well if you make a note of your questions as Mr. Gorman goes along on the pages of the copy that you have and let him complete his statement. Mr. McGREGOR. All right. |