what they needed and what they could raise without pain with their current tax policies. Still others thought the solution was to get the Federal Government to withdraw from the taxing of fuel so that the States, without lowering the total tax, could use the Federal 2 cents per gallon for their own needs.
But most States decided on some form of credit financing to close at least a part of the gap. The Massachusetts Legislature authorized a $100 million bond issue backed by road-user revenues to improve the main highways and began looking into toll financing for some highways.[1] By a two-to-one vote, the voters of North Carolina approved a $200 million bond issue for rural roads. The bonds, backed by the faith and credit of the State, sold to yield an effective interest rate of only 1.52 percent.[2][N 1]
- ↑ By comparison North Carolina sold its road bonds in 1920 to produce an effective interest rate of 5 percent.
Traffic was concentrated around the cities, but the need to upgrade rural roads also demanded that limited funds be spread across the State, resulting in pavement widening projects such as this.
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