that the relocations would shorten the total length of the system by about 641 miles. All together, the investigators found that it would take an investment of $11.3 billion at 1948 prices to bring the Interstate System up to an acceptable standard to handle 1948 traffic. To meet this need in a 20-year period would require an investment of at least $500 million per year, according to the PRA’s report.
However, the report stated that the needs of the national defense would require a “substantially more rapid improvement,” and it pointed out that tremendous benefits to the civilian economy would flow from a faster rate of modernization. Rather than stretch out the work over 20 years, the PRA suggested credit financing with appropriations sufficient to amortize the bonds in 20 years. To this end, the report recommended that Congress consider permitting the States to borrow capital now to complete their sections of the Interstate System and use their future Federal-aid apportionments to repay the borrowings. To further promote rapid completion, the report suggested that Congress increase the Federal share of the cost of Interstate projects and also earmark funds specifically for the Interstate System. These earmarked funds should be apportioned so that the improvement of the System would proceed at about the same rate in all the States.[1]
In March 1950 Representative William M. Whittington of Mississippi introduced a bill to increase Federal aid for fiscal years 1952 and 1953 to $570 million per year, of which $70 million would be earmarked for the Interstate System, to be matched 75 percent Federal to 25 percent State. Whittington’s bill would also increase Federal participation in right-of-way costs to 50 percent and permit the States to use future Interstate apportionments to repay loans incurred to finance Interstate projects. This bill had the support of AASHO, except that AASHO had asked for $210 million for the Interstate instead of the paltry $70 million.[2]
Not all the State highway people were behind AASHO in this support. Led by the influential chief engineer of the Pennsylvania State highway department, the Association of Highway Officials of the North Atlantic States (AHONAS) passed a resolution opposing any further increase in Federal aid to the States, any further earmarking of funds for particular Federal-aid systems and any increase in the Federal share of projects. Increase in the Federal share would, AHONAS asserted, lead inevitably to more Federal control and intervention in State affairs.[3]
Other bills in the 2d session of the 81st Congress would have boosted Federal aid to $870 million annually with $100 million going directly to counties and townships. In the end, despite the continued unsettled conditions in Europe and the outbreak of war in Korea in June 1950, Congress left the road program substantially unchanged except for an increase of $50 million to restore the 1946–48 level of $500 million per year. There was no increase in the Federal matching share or any earmarking of funds for the Interstate System. The only important changes were raising Federal participation in right-of-way costs to 50 percent and the granting of permission for the States to use future Federal-aid apportionments to retire the principal of bonds issued to finance improvements on the Primary System, including the Interstate System.
Nearly 2 years passed before Congress took any further action on the PRA recommendations. The Federal-Aid Highway Act of 1952 increased Federal support for the Primary and Secondary Systems to $550 million each for fiscal years 1954 and 1955 and also authorized $25 million for each of these years for the Interstate System. This token amount was to be apportioned according to the original Federal-aid formula and matched 50-50 by State funds.
Two years later in the Federal-Aid Highway Act of 1954, Congress increased the whole Federal-aid program to $875 million per year, earmarking $175 million in fiscal years 1956 and 1957 for the Interstate System and increasing the Federal share to 60 percent on Interstate projects.
The reluctance of Congress to provide adequate funding for the Interstate System can be explained in part by a rising sentiment against the principle of Federal aid, and voiced by the 1953 Governors Conference which recommended that there be no further increases in aid, and that the Federal Government withdraw from the taxation of motor fuel.[4] However, the best excuse for congressional inaction was a strong indication from a number of States that they were well on the way to removing their worst traffic-bottlenecks by building roads without Federal assistance.
The Second Toll Road Era
The Pennsylvania Turnpike operated at a loss during the war years despite increased traffic. In 1944, 1.04 million vehicles used the turnpike and paid $1.78 million in tolls, yet the Authority lost $500,000 and had to draw on the reserve built up in 1940, 1941 and 1942.[5]
After the war, traffic increased rapidly, and this, with increased toll rates, quickly restored profitable operation. By 1948 the turnpike’s net operating revenue was $5.6 million per year. With the financial security of its original investment assured, the Pennsylvania Legislature authorized the Turnpike Commission to extend the turnpike 100 miles east to Philadelphia at an estimated construction cost of $75 million and 60 miles west to the Ohio State line for about $55 million.[6] The Commission had no trouble selling its bonds to eager investors.
Meanwhile Maine was pushing plans for a toll road to be built a few miles inland from U.S. Route 1 between the New Hampshire border and Portland. This road was expected to attract most of the summer traffic bound from New York and New England to the Maine resorts and thus take some of the pressure off congested Route 1. The Legislature thought this traffic would not mind paying a small toll to avoid the congestion on the old road.
As soon as wartime restrictions were lifted, the Maine Turnpike Authority sold $15 million of revenue bonds to finance the 47-mile road and began construction. Although the bonds were secured only by the future earnings of the turnpike, they sold readily at a net interest rate of only 2.64 percent. When the turnpike was opened in 1947, traffic exceeded estimates, and after some initial difficulties, the road operated in the black on a toll of about 1½ cents per mile.[7]
166
- ↑ Id., pp. 3, 4.
- ↑ Road-Aid Bill Contains New Item For Interstate System, Engineering News-Record, Vol. 144, No. 10, Mar. 9, 1950, p. 17.
- ↑ Road Officials Hit Federal-Aid Boost, Engineering News-Record, Vol. 144, No. 10, Mar. 9, 1950, p. 21.
- ↑ AASHO, supra, note 20, p. 185.
- ↑ Pennsylvania Turnpike Continues at a Loss, Engineering News-Record, Vol. 134, No. 8, Feb. 22, 1945, p. 53.
- ↑ Announce Extension Route of Pennsylvania Turnpike, Engineering News-Record, Vol. 142, No. 3, Jan. 20, 1949, p. 63.
- ↑ Progress and Feasibility of Toll Roads and Their Relation To The Federal-Aid Program, H. Doc. 139, 84th Cong., 1st Sess., pp. 6–8.
