By O.T. BANTON
What it means to Illinois
Ford's gas tax proposal: The good news and the bad news PRESIDENT FORD'S HIGHWAY
proposal, messaged to Congress July 7,
bears both good and bad news from the
viewpoint of the Walker administration. The good news is that the state
could get the unrestricted money from
another cent of the gasoline tax, but the
bad news is that to do so, Illinois must
enact an additional one cent gas tax,
and it is well known that Gov. Dan
Walker has vowed not to increase any
taxes. If Illinois did levy the added tax,
the federal gas tax in this state would be
decreased by one cent, so that the
proposal would be practically painless
for the taxpayers. "In this way," the
President said, "the ability of State and
local governments to deal with their
own transportation problems will be
improved, but costs to the highway user
will not be increased." Highway officials say that the gas tax
proposal would save any loss from tax
money going to Washington and then
being sent back to the states. In addition, there would be no federal restrictions on how it could be used. But if the
General Assembly voted for the tax increase, would it be distributed under the
existing formula that applies to most of
Illinois'' existing 7½ cents per gallon
tax? This formula gives the state only 35
per cent for use on its primary highway
system. The rest is divided among counties, cities, and townships. If the governor blocked the tax increase, the federal
government would continue to collect
the same one cent per gallon tax in Illinois, but it would go into the federal
treasury and do Illinois no particular
good. Federal aid for maintenance Gov. Walker, it is reported, sees as a
"step in the right direction" the bill's
provision that some 38 present
categories of federal aid for highway
work be reduced to four, since this
would give the states much greater
choice in use of federal funds. The four
new categories would be: the interstate
system; urban and suburban areas over
50,000 population; rural highways; and
safety programs. Funds for the latter
three categories could also be used for
projects to improve public transportation. Highway Trust Fund jeopardized Analyze effect on Illinois The highway division analysts see the
bill as providing $96 million for Illinois on its non-interstate or federal aid
primary and secondary roads for fiscal
1977, as compared with $127 million allotted to this state for fiscal 1976 under
present operation of the trust fund. If the state also had benefit of another
cent per gallon of gasoline tax, it would
have $146 million in fiscal 1977. If it
had only 35 per cent of the latter, its
1977 allotment would be $ 113.5 million, or $13.5 million less than it is getting for the present fiscal year.
Illinois' share of interstate highway
money, for which the federal government provides 90 per cent, would be extensively reduced under the federal October 1975 / Illinois Issues / 309
The Ford administration's bill is
H.R. 8430, introduced by U.S. Reps.
Robert E. Jones (D., Alabama) and
William H. Harsha (R., Ohio). A
feature of the bill that is attractive to
Illinois officials is the one which allows
federal highway aid to be used for maintenance of interstate highways. Maintaining these routes, with their 300-feet
wide rights of way and four lanes of
pavement, already has started to be a
heavy drain on the state's highway
finances, and as the pavements grow
older, maintenance costs will increase.
The Ford proposal has stirred special
concern among organized highway
builders and users because it would
emasculate the Highway Trust Fund.
This fund was set up by Congress in
1956 to finance construction of the
42,500-mile interstate highway system,
and later expanded to provide federal
aid for state and county roads. Gasoline
taxes and excise taxes on motor
vehicles, tires, parts and lubricants that
now go into the trust fund have long
been regarded as "highway user taxes,"
and there has been general acceptance of the principle that such tax
should be used for highway purposes.
Illinois highway division officials have
held this view. The motor fuels and
trucking lobbies in Washington
doubtless will fight the highway bill
with all the pressures they can muster
and they would have much public sentiment behind them. Ford's plan calls for
putting returns from two cents of the
federal gasoline tax into general
revenue and retaining the other cent in a greatly reduced trust fund. The trust
fund would also continue to receive
most of the excise taxes that now go
into it. The sole purpose of the new trust
fund would be to finance operation and
maintenance of the interstate highways. Realistically, even if two cents of
the federal gas tax were to go into the
federal general fund, strong pressures to
apply this money to highway purposes
would not abate.
State highway engineers and
statisticians have been analyzing the federal bill to try to determine what it
would mean to Illinois if passed in its
present form. The bill, covering fiscal
years 1976-1980, provides for' $3.25
billion dollars being available for fiscal
year 1976 and the same amount for
fiscal 1977 for the interstate system; with $3.55 billion in fiscal 1979 and $3.7
billion in fiscal 1980; $1,05 billion each
year for the rural highways in the states; $800 million each year for urban
transportation assistance; $400 million
a year for highway safety improvement
programs, and $35 million for fiscal
1976 for control of outdoor advertising
and junkyards, with $65 million each
year for this purpose in fiscal 1977-1980.
Ford's gas tax:
good, bad newshighway bill, according to state highway officials. Under the bill, the state would get $84 million in fiscal 1977, compared with $143 million which is the current fiscal 1976 allotment. That should not hurt, though, the state road officials say, since Illinois is much farther along in building its interstate highways than most states. Illinois is above 90 per cent (average of other states is 80 per cent) in having its interstate routes completed or under contract. Only three interstate routes in Illinois remain to be put under contract: parts of I-274 which is the Peoria beltline; all of I-255 which is the East St. Louis beltline; Chicago's controversial Crosstown (I-494) which may never be built; and a few short stretches of I-55 (Chicago to St. Louis). Illinois' heavily reduced share of federal aid money for the interstate work is due to the federal administration's bill emphasis on completion of interstate segments between systems and low priority on finishing segments within cities.
Final action months away
The Ford administration bill is one of several 1975 Federal Highway Bills now before Congress. Another highway bill has as its chief sponsors Sens. Ted Kennedy (D., Massachusetts) and Lowell Weicker (R., Connecticut). One sponsored by Sen. Lloyd Bentsen (D., Texas) already has been in hearings for several weeks. The highway bill that eventually will emerge from Congress is almost certain to be a "conglomerate," it is believed by Langhorne Bond, Illinois Department of Transportation secretary, and his highway division associates.
310 / Illinois Issues / October 1975