Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1923-11-21
Federal VS.. State
Disbursement of
Highway Money

State Highway Commission yester-
day that many of the citizens and
taxpayers of Maine are in the dark
in regard to the matter of the source
of Federal aid funds expended for
the Improvement of roads. 1t has
been suggested repeatedly that each
! state might be better off If the taxes
assessed against the state and re-
turned to it in the form of Federal
aid for roads were put into and dis
bursed from the state treasury for
road construction without the inter-
Vention of the Federal Government.
In this connection it is interesting to
note some of the points brought out
by Secretary of Agriculture Wallace
in an address delivered before the
Investment Bankers Association at
Washington, d. c., on October 20, re-
lative to the question of financing
Federal aid for highways:
Secretary of Agriculture Wallace
stated that the Federal revenue from
taxation of motor vehicles and &C
cessories since 1917 has been more
than twice as great as the amount
expended by the Federal Govern
| ment for road construction.
Federal Aid is paid out of the
Il
Secretary Wallace. and while it is
impossible to trace the disposition of
any particular dollar collected as
revenue, it is of interest to compare
some of the Governments sources of
revenue with certain OUTLAWS which
the Government makes.
Ever since 1917 when the first
war finance measure was passed the
Government has been collecting a
tax on the selling price of automo-
biles, motorcycles. motor trucks.
tires and automobile accessories and
also tax upon the use of passenger
automobiles for hire. Automobiles
and tires and accessories bear q tax
of 5 per cent. and motor trucks are
taxed : per cent. Up to and includ-
ing the fiscal year ended June 80.
1923, the Federal Government col
lected $5S9.012,021 in taxes from
these particular sources. During the
same period of time expenditures of
the Federal Government on account
of Federal Aid highway and Forest
road construction together with all
administrative outlaws amounted to
but S264. 7S2.216 or - per cent of the
amount collected directly as taxes
from the users of our roads and from
those who are the most benefited
by highway improvements. The au-
tomobile revenues of the Govern
ment for the last fiscal year ended
June so. 1923. were in round num-
bers S146, 100000 and the withdraw
ais from the Treasury for Federal
Aid highway purposes We're approx
imately $72.OO0.000 WHICH indicates
clearly that the owners and opera
tors of motor vehicles on our high
w MO hnn t.iy ho,
the entire Federal expenditures for
roads.
I'm discussing methods by which
the States may raise money to match
Federal Aid funds. Secretary Wal
lace stated that they have the option
OF the pay-as-you-go plan, the bond
ing or deferred payment plan or
combination of the two. He stated
that it is generally accepted that
,, maintenance of roads should be paid
for out of current funds but that the
choice of plan for raising construc-
ton funds will depend upon the
amount of money to be raised, the
tax policy of the State and the extent
to which one generation should fas-
ten Indebtedness upon succeeding
generations.
1.-The advantage of the bond plan
available for highway construction.
The disadvantage is the increased
cost of the road due to interest
charges. Credited against this inter-
est cost must be the service that the
| road will give for an estimated per-
| ior of years between the date Of its
actual construction under bond is
sue and the date of it's probable con-
| Structlon under pay-as-you-go
plan. The question is not merely
| whether a community shall incur
| debt: it is also question as to
whether the maximum economic eff
| cheney and the full development of
the pubic wealth will be best promo
ted by using public credit.
THE surface pavement is but a
| part and in fact the least permanent
part of an improved road. The public
needs to be informed that the pave
ment is always liable to show dis
tress under excessive traffic. and that
the really permanent portions of n
! highway are. the graded road bed,
| which usually improves with years
| under traffic: and the drainage struc-
/ ture. The grades remain intact. and
! much even of the surfacing material
| remains to form the basis of the re-
newed surface
Due regard to good engineering
| and good business in road construc-
| ton will maintain a ratio between
! the cost Of the pavement or the sur
| facing and the more permanent nor
! tons of an improved highway that
| will assure to future generations as
NOTICE Of TORNCT OCJrpE