By the end of the 1957 fiscal year, approximately $1.5 billion had been deposited in the Trust Fund, of which $3 million came from interest earned on investments and the remainder from Federal automotive excise taxes. From this total, nearly $966 million was disbursed for work on the Interstate and ABC programs, but there was a balance of obligations of apportioned highway funds of nearly $2 billion.
The 1956 Act also marked the first exercise of Federal limitations on commercial vehicle sizes and weights. It established maximum width and weight limitations on the Interstate Highway System to protect the Federal investment in this system and to prevent overstressing of bridges for safety purposes.
Toll Roads and the Interstate System
Inclusion of toll facilities on the Interstate System has been a major issue since the accelerated program was authorized in 1956. Of the 40,000 miles of highways approved for the System in the early 1950’s, 1,100 were toll facilities. A 1955 report by the President’s Advisory Committee on a National Highway Program indicated that about 5,000 miles of toll roads planned, being constructed, or in actual operation in 23 States would either parallel or coincide with the proposed Interstate Highway System.
The Highway Act of 1956 adopted a Bureau of Public Roads’ recommendation for incorporating toll roads into the Interstate Highway System. The prohibition against the use of Federal funds for constructing toll facilities was modified only to the extent of permitting their use on the approaches to toll roads, with two provisos:
- If the only use of the access road was to serve as an approach to a toll road, the toll road must be made toll free upon retirement of the outstanding debt.
- Satisfactory alternate free routes for bypassing the toll sections must be available.
Seven toll facilities have received Interstate funds on condition that the tolls be removed upon retirement of the debt:
Indiana Toll Road
Northern Illinois Toll Highway
Kentucky Turnpike[N 1]
Maine Turnpike
New York Thruway
Ohio Turnpike
Richmond-Petersburg Turnpike
Because of the legal complexities and contractual requirements under which the various toll facilities were established, a feasible means of freeing those on the Interstate Highway System remains one of the paramount unresolved issues. Many of the toll facilities operating as part of the Interstate System have outstanding debt secured by toll revenues with redemption dates beyond the year 2000. In a number of cases, statutory provisions require tolls on such facilities to be collected indefinitely, beyond the time when the toll-secured debt is retired.
- ↑ Tolls were removed from the Kentucky Turnpike on June 30, 1975.
In some cases, debt proceeds and revenues related to both highway (including Interstate) and nonhighway facilities have been commingled and are not readily identifiable. Toll revenues are primarily used for operating the toll facilities and retiring the outstanding indebtedness but are also used in some instances for other public services (more often in the case of toll bridges than toll roads). Thus, the loss of revenue for other purposes has to be taken into account.
Since 1956, the Federal Highway Administration has refused to approve the location of free routes on the Interstate System in at least three cases where the routes would parallel toll facilities determined to be adequate for traffic needs until 1975, where the financial structure of the toll facilities was in danger of being adversely affected.
Bond Financing in the 1950’s
Toll revenue bond financing was employed by 29 of the 39 borrowing States during the decade of the 1950’s, and in six States—California, Illinois, Indiana, Oklahoma, Texas, and Virginia—it was the only major type of bond financing used. Although revenue bond financing occupied a position of prominence, road-user tax bonds and other limited obligations evidenced a most significant increase. The seven Northern and Eastern States that issued $200 million or more of general and limited obligation bonds accounted for nearly two-thirds of all such bonds issued.
Municipal highway debt showed a much faster rate of growth than that of the counties and other rural local governments. If the debt outstanding at the beginning of 1950 is assigned a value of 100, the comparative volume of municipal debt outstanding at the end of 1960 would be 215.5 and rural local debt, 148. The more pervasive demand for credit financing by the municipalities was partly caused by the relatively greater State financial assistance to rural governmental units and also to the rapid growth of metropolitan areas and urban traffic volumes during the 1950’s. General obligation bonds were the predominant type of local issues.
The Public Corporation Device
Although the device was not new even in the highway field, beginning in the 1940’s and continuing through the 1950’s, public corporations (authorities) came into extensive use. The features that distinguish the authority device are not always clear-cut. For example, a number of State highway departments—and local governments too—directly finance and operate toll projects. But this is not the primary function of a highway public works department. The term “authority” is generally reserved for (1) those instrumentalities whose primary responsibility is the financing of highway facilities with revenue or limited obligation bonds, for which specific revenues are pledged, and (2) those that do not rely upon general tax support or that themselves have the power to levy taxes.
Between 1940 and 1960, authorities became an economic phenomenon of considerable consequence. During this time, 45 of them were created in the highway field, bringing to 75 the number active on January 1, 1961.
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