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STATE OF SOUTH DAKOTA,
Pierre, March 10, 1955.

MY DEAR SENATOR: It was thoughtful of you to ask my opinion with regard to highway legislation now being considered by the Congress.

I am attaching a statement made by the secretary of the highway commission before the South Dakota legislative session which has just concluded.

You can see that it will require about $262,000,000 exclusive of interstate needs to bring South Dakota's trunk highway system of about 6,700 miles to tolerable standards. Considering all sources of State revenue now being utilized and assuming that Federal aid would remain the same as under the 1954 Highway Act, our State would be about $130,000,000 short. This would mean about $13,000,000 more money annually than we now raise. This does not consider the Interstate System which would add $1,750,000 annually.

The legislative session just concluded provided us with sufficient funds to match Federal aid under the 1954 act and leave more than $2,000,000 during the biennium for 100 percent State construction. This latter money will be used almost exclusively on low traffic roads.

Farm-to-market roads are our biggest problem in South Dakota at this time. Our primary system is shaping up quite rapidly and with the Federal aid already in sight we should be well on the way to a solution of this problem. Since our Interstate System is in pretty good shape at this time and is capable of caring for our needs for some time to come, we feel that emphasis in new legislation should be on farm-to-market roads. We are not unmindful, however, of the need for an adequate Interstate System, but we feel this should b financed entirely by the Federal Government and such program should not jeopardize our primary, secondary, and urban development.

We are in the process now tof studying our entire financing picture. Since we have only 650,000 people living in 70,000 square miles, you can see that our highway problem is complex. I have said I would not hesitate to call a special legislative session and most members of the legislature are agreed that this may be necessary if and when the new Federal law which you are considering is enacted.

Any way you look at it, South Dakota will need considerable more revenue than we now have in sight if we are to meet the requirements of either your bill or the President's plan. I understand Senator Case is introducing legislation which will reflect his personal views in this connection.

We should like to keep control of our roadbuilding program and I can assure you that we will investigate every avenue for additional revenue. Sincerely,

JOE Foss, Governor.

STATEMENT BY HOADLEY DEAN, SECRETARY OF THE SOUTH DAKOTA HIGHWAY COMMISSION, BEFORE A JOINT MEETING OF THE HIGHWAY COMMITTEES, SOUTH DAKOTA LEGISLATURE, FEBRUARY 28, 1955

As has been previously pointed out, the State highway department will be short approximately $1,900,000 on July 1, 1956, if present highway construction work which has already been programed is carried to completion. This figure is based upon a projection of all moneys available from all sources, Federal and State, including appropriations already made by this legislature. These latter amounts are $2,224,000 representing the final payment on hte rural credit transfer and $800,000 which is in lieu of the sales tax on automobile accessories.

In addition an appropriation of $1,000,000 has been recommended by the joint appropriations committees. If this is allowed, the highway department will, during the year beginning July 1, 1955, be able to match all Federal funds made available to South Dakota under the Federal Highway Act of 1954 and to remove the deficit of $1,900,000. If, however, this is not enacted there will be a shortage of $37,000 in the highway fund as of July 1, 1957.

If legislation pending in the Congress of the United States is enacted, South Dakota's highway situation will become financially serious. Under the Gore bill which has recently been introduced, South Dakota will need $4,000,000 more annually for Federal matching purposes than is anticipated will come to the highway fund from all present sources.

If the program recommended by President Eisenhower is enacted South Dakota will need about $12,500,000 more each year for matching purposes.

In the past, considerable money has been available for 100 percent State construction. In 1953-54, $6,800,000 in unmatched State money was included in the

program for primary and secondary system. In 1954-55 this amounted to $4,500,000 and by 1955-56 this has shrunk to $250,000 because of the increase in Federal matching funds available to South Dakota.

It should be pointed out that the 100 percent State money which has been included in previous programs was used mainly on the secondary or lower traffic roads which were not eligible for Federal-aid primary funds. In other words, if the State highway commission has only enough to match Federal funds, there will be little or no money available for construction on low traffic State highways unless some means are devised to increase State revenues. No money will be available for construction of roads not designated by the Federal Government as either primary or secondary State highways.

If the Gore bill were to pass Congress, South Dakota would need $6 million additional immediately to match Federal-aid money. The State would need $4 million annually to match additional Federal funds and $2 million between now and July 1, 1956, to make up the deficit which has already been pointed out. In any event, the highway-building program of South Dakota will be dictated by the Federal Government. This is because little or no money is available now or is in sight for 100 percent State construction. As you members of the legislature know only too well, whenever the Federal government advances money it expects control and regulation in return. That situation is no different for highways than it is in other State departments.

The problem of the Nation's highways is of the utmost concern to national leaders of both political parties. Bills representing the thinking of both Republicans and Democrats are in Congress at this moment calling for an expanded national highway program.

President Eisenhower has pointed out that highways are in the national interest both as a defense measure and for interstate commerce.

This legislative session has shown a sincere interest and an acute awareness of the needs for future development of South Dakota and its natural and commercial

resources.

With the limited rail and air transportation facilities highways must of necessity play a most important and vital part in the progress of our State.

Surveys have shown that $262 million, would be necessary to bring South Dakota's State system to tolerable standards in the next 10 years. It would take this amount to put South Dakota in line with the program advanced by Gen. Lucius Clay in his report to President Eisenhower.

As near as can be computed at this time, about $130 million, or about half of that sum, will be forthcoming from the Federal Government in the form of highway aid and from the State through its various sources of revenue.

But that still leaves a deficit of $130 million.

That means that if the people of South Dakota want their roads brought to standard some means will have to be found to raise an additional $130 millions within the next 10 years. Broken down this amounts to about $13 million a year over and above anticipated income for construction purposes.

There is a constant demand upon the highway department for better highways and a constant demand on the State to assume responsibility for additional highways. In the minds of the Department there is no unessential road in South Dakota. The most important road in the world is the one that goes by your home or farm. We of the highway department would like to be able to take care of the numerous requests for highways that are made on us each year. Last year, I believe, 135 delegations appeared before the highway commission with their road problems.

The number of vehicles in South Dakota is steadily increasing. At last count this figure was 308,000 cars and trucks, more incidentally than the number of homes in the State. On the national scale there are 58 million registered vehicles and it is estimated that by 1956 there will be 80 million. I presume that South Dakota will keep pace with the Nation.

This means that South Dakota's highway needs along with those of the Nation are increasing rather than decreasing.

President Eisenhower has said that 1 out of 7 Americans make his living because of highways. There is not a home in South Dakota that is not affected by modern highways. In fact, our State is one of the highest in the Nation in per capita motor vehicle ownership.

While I believe we can take pride in the highway system we now have in South Dakota, the problem of roads is always with us. As we grow and progress our highway problems will increase. If we are successful in industrial and resource

development we will bring more people to our State and haul more goods over our highways. That means a greater demand for good roads.

We have been discussing big figures in matters of highway financing and the anticipated cost of $130 million more than we now have to bring our roads to standard. Let us translate this figure into something a little more understandable. What does this huge figure mean to the owner of a motor vehicle registered in South Dakota? If you divide 130 million by 308,000 you will see that in 10 years it would cost each vehicle now registered an additional $420 to bring our roads to standard. That would mean $42 more per year per motor vehicle. The average new car owner is not just buying a car these days. He is also buying most of the new accessories-radio, heater, automatic signal lights, automatic transmission, power brakes, power steering several hundred dollars' worth before he is through. Nothing is too good for the safety and convenience of him and his family.

Now suppose you say this to him, "There is one other accessory that you should select. What kind of a road do you want to have under the wheels of your car when you are driving?"

That one item may be more important to him than any of the other accessories.

You might say to him, "Will you pay $42 per year for 10 years for the new 1955 model modern road or take the old standard model, with its many inconveniences and defects?"

It is probable that his answer would be "Yes."

Regardless of the kind of highway financing program that is enacted at this session of the legislature, all of us here realize that our problem is a big one, and an ever present one. While we all realize that this is an expensive problem, failure to solve it may burden our State with a price for highway inefficiency which we can never afford to pay and which may indeed exceed the cost of the neces sary expenditures for a solution.

An analysis of existing and proposed Federal-aid highway programs showing volume of construction, Federal-aid and South Dakota funds required for 1-year program

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The State highway commission will have approximately $8,200,000 available annually for construction under present legislation.

Funds needed during 1955-56 and 1956-57 fiscal years to match Federal-aid funds:

(a) 1954 Highway Act‒‒‒

(b) President Eisenhower's program.

(c) Gore bill (S. 1048).

None ($37,000) 25, 000, 000

4, 000, 000

STATE OF TEXAS,
EXECUTIVE DEPARTMENT,

Austin, Tex., April 21, 1955.

DEAR SENATOR GORE: Please accept my sincere apologies for my delay in replying to your telegram of March 8, but our legislative session, as well as other appointments, has prevented my giving the contents of your telegram the study that they justly deserved prior to this date.

The State of Texas needs an expanded highway program. We have great needs in all of the categories of roads. There has never been a time in our history when we have been unable or unwilling to take advantage of any program that would benefit highway development. I have recommended to the present session of the Texas Legislature that the State gasoline tax be increased from the present 4 cents per gallon to 6 cents per gallon. This would bring a net increase in yield to the Texas Highway Department of $43 million if enacted into law. Our legislature is presently considering this proposal.

In my opinion the best help the Congress of the United States could give on the highway program would be to repeal the Federal gasoline tax so that this additional revenue would be available to the States.

I believe that I can assure you and your committee that Texas, as usual, stands ready to do its part in the further development and expansion of the State and Federal highway systems.

Sincerely yours,

ALLAN SHIVERS.

STATE OF UTAH,
OFFICE OF THE GOVERNOR,
Salt Lake City, March 8, 1955.

DEAR SENATOR GORE: I am in receipt of your telegram concerning Senate bill 1048, which you have introduced, to increase the Federal contribution for road construction. Your telegram gives no indication of the amount of money the various States would have to raise to match these additional Federal funds, but I would judge it to be considerable.

It seems to me that the highway program adopted by the governors conference in 1952, was by far a better approach to this problem. This plan would have removed the Federal Government from the field of gas taxation, permitted the States to levy the tax vacated by the Federal Government and, because it would eliminate the present diversion of Federal gas tax, would increase our highway program by about $1 billion a year. There were various refinements to this program which I will not attempt to discuss here.

I cannot understand how the Federal Government can propose the expenditure of additional billions on highways when it has such an enormous national debt and is operating even yet at a deficit. An unbalanced Federal budget creates inflation as you well know. The proposed highway program can only work to further cheapen the dollar and should such a program continue in the years to come, the results would be disastrous not only for the highway program but for the economy of the Nation.

I would suggest that Congress take steps to balance the budget before proposing new spending programs. This could be done by halting the foreign-aid program, withdrawing our Armed Forces from unnecessary stations overseas, and reducing costs in other fields. A balanced budget would be a real achievement for any Congress, and it must soon be forthcoming if we are to avert further inroads of inflation.

A balanced budget likewise could result in further tax reductions which would permit the States to move into many tax fields thus vacated and provide services of their own. As matters stand, too many States are turning to the Federal Government for support instead of relying on their own resources.

The proposed program will neither relieve the Federal Government of an already heavy burden nor the States. It will require the Federal Government to increase the Federal aid extended to the States and require the States to increase their taxes so as to match this Federal aid. The people who must foot the bill are already overburdened with taxes and this will cause an even greater load to be placed on their shoulders. I would suggest that Congress look to the dangers in further tax increases. I am a great believer that the power to tax is the power to destroy. I am fearful that these and other new programs now being considered in Washington will have a devastating effect both on our economy and our freedom.

Sincerely yours,

J. BRACKEN LFE,
Governor of Utah.

[Telegram]

MONTPELIER, Vг., March 10, 1955.

On the basis of information now available to me I do not feel I would be justified in expressing any opinion as to the merits of the two bills now before the Senate. I will, however, piont out the way in which they appear to effect the economy of the State of Vermont.

Vermont has already planned to raise funds which will be sufficient to match the provision of S. 1160. Likewise under its terms very satisfactory progress can be made on the Interstate System at a cost to Vermont which the State can meet the matching funds required of this State. To take full advantage of the funds made available by S. 1048 would represent an increase of 67 percent over the present level. The primary, secondary, and urban funds so made available could fill vital neds. However, the interstate plan set forth would be both inadequate for the State's needs and beyond its means. Vermont has 343 miles of interstate highways estimated to cost $171,500,000 to construct. Under the provision of S. 1048 Vermont's mileage could only be completed in 37 years at foreseeable revenue rates. If the Interstate System is to be completed within 10 years, I consider the United States Government would have to pay at least 90 percent of its costs in the State in order to enable Vermont to participate.

JOSEPH B. JOHNSON,
Governor of Vermont.

COMMONWEALTH OF VIRGINIA,

GOVERNOR'S OFFICE, Richmond, March 10, 1955.

DEAR SENATOR GORE: Reference is made to your telegram of March 8 inviting my views with respect "to the ability and present inclination" of Virginia "to raise the additional funds to match and implement" the Federal highway proposals now pending before your subcommittee.

With respect to Senate bill 1048, it would appear extremely doubtful that this State would be in position, from present revenues, to match the proposed increases.

With reference to both Senate bills 1048 and 1160, I long have held the opinion that the best and wisest course would be Federal withdrawal from the motor fuel and lubricants tax field, leaving the collection and administration of these revenues to the States. I firmly believe that such a course would largely solve our highway problems.

Sincerely yours,

THOS. B. STANLEY.

STATE OF WASHINGTON,
EXECUTIVE DEPARTMENT,
Olympia, March 10, 1955.

DEAR SENATOR GORE: In answer to your wire of March 8, it is our well-considered opinion that this State would receive much greater benefit under the Clay program than under the Gore program.

The apportionments of Federal funds to the State of Washington under the Federal Aid Act of 1954 for projects on the three Federal-aid highway systems and on the Interstate Highway System, for the year ending June 30, 1956, totals $14,061,986. This is very close to the maximum amount of Federal-aid funds present revenues will permit us to match.

On the basis of simple proportion under Senate bill 1048, this amount would be increased to $25,710,000. This sum could not be matched without a substantial tax increase which, at this time, is not practical.

Recently we were asked by the American Association of State Highway Officials to voice our opinion on Senate bill 1048, as compared to the Clay program outlined in Senate bill 1160, and in this questionnaire we expressed our opinions in favor of Senate bill 1160. It is our understanding that 29 of the 37 highway departments who replied to this questionnaire favored the Clay program. I trust this gives you the information you desire.

Sincerely yours,

ARTHUR B. LANGLIE, Governor.

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