Planning After 1956—Statewide and National
Reimbursement for Toll Roads
Among the many and far-reaching effects of the 1956 Act, none was felt more immediately than its impact on toll road construction. The modern toll road era ended abruptly. With the promise of adequate funding coming primarily from Federal rather than State user taxes for early improvement of most of the mileage feasible of toll financing, justification for that method no longer existed. This toll road era, in contrast to the early era, ended not in disaster and bankruptcy, but in a substantial, and still financially sound, contribution to the Nation’s highway transportation needs.
The Congress gave serious consideration to the problems that would arise if most of the toll road mileage were incorporated, as anticipated, into the system. There was much pressure from the user groups to make them free of tolls, but that raised questions as to how the bonds could be retired far ahead of maturity, even should the bond holders agree. The toll road authorities were hardly favorable to going out of business so quickly after they had launched their mostly successful ventures. As a matter of national policy, there was inequity in users of the Interstate System having to pay tolls in some States but not in others, as discussed earlier in the 1955 report to Congress. But what was perhaps not generally nor fully recognized, the 1956 Act did not provide for constructing the Interstate System but for completing it. It was expected that routes or sections already adequate, or that could be made so, for 1975 traffic under the Interstate standards would be included in the System. Any Federal-aid projects in this category would have received Federal aid anyway, even if at the 50–50 or the later 60–40 ratio, but the toll roads had no Federal aid nor State road-user funds applied to their construction. Nevertheless States such as Pennsylvania and New York, with large percentages of their Interstate System already completed by the toll road authorities, felt short changed in relation to States in which small mileage met the Interstate standards and, thus, were scheduled to receive relatively larger amounts of “90–10” money.
In this atmosphere the Congress, by Section 114 of the 1956 Act, called for a report to be made by the Secretary of Commerce, in cooperation with the State highway departments and other agencies as required to aid the Congress,” . . . to determine whether or not the Federal Government should equitably reimburse any State for a portion of a highway which is on the Interstate System, whether toll or free, the construction of which has been completed subsequent to August 2, 1947, or which is either in actual use or under construction by contract, for completion, awarded not later than June 30, 1957 . . .”
The American Association of State Highway Officials, appointed a committee to work with the Bureau of Public Roads in planning the study, and all States provided the needed information. The findings, resulting from the summarization of voluminous data, could be briefly expressed.
In short, the study disclosed that 10,859 miles met the requirement for inclusion in the System, either fully meeting the standards for 1975 traffic or being suitable for upgrading to meet the standards. Less than 2,000 miles were found to be fully adequate, however. Included in the total were 1,950 miles of toll roads in 26 States and 8,909 miles of free roads in 47 States.
The cost of the improvements that had been made within the 10-year period specified (representing the time between the approval of the Interstate System and the effective beginning of the Trust Fund financing) was estimated at $6.09 billion, $2.59 billion for toll roads and $3.50 billion for free roads. The depreciated value was also calculated, the depreciation being very little since the roads were so recently built. Right-of-way was assumed not to depreciate in value; grading and drainage was assumed to depreciate at a rate of 1 percent per year (a life of 100 years), structures at 2 percent, and pavement at 3 percent. On this basis the depreciated value became $5.92 billion, $2.52 billion for toll roads and $3.40 billion for free roads.
The Congress faced something of a dilemma when receiving the report in January 1958. To decide to reimburse would be to reverse its decision of 1956 to provide for the "completion" of the System, and instead, accept 90 percent of its total cost, including sections already built. Probably the practical problem of finding $6 billion overrode any feeling of “inequity,” however, and the decision was to defer consideration until later in the program. That time has not yet come, and one can wonder whether it will.
The Continuing Needs Studies
Congress in 1954, in calling for the report on Needs of the Highway Systems, 1955–1984, set in motion what proved to be nearly continuous examination of the physical and financial problems in the highway transportation area and the development of plans for the years ahead. The report listed the highway needs for all roads and streets over the 30-year period at $216 billion. This figure, later under changing conditions found to be at least 50 percent too low, was still a staggering amount and one patently out of reach. The first result of the study was reflected in the 1956 Act. Title I, The Federal-Aid Highway Act, authorized the program to complete the Interstate System, the authorizations extending through 1969, 13 years ahead. In the same Act the so-called ABC program for primary, secondary, and urban roads was authorized for 3 years, through 1959, instead of for the customary biennium. Thus in this way the Congress picked out of the whole package of needs on all sys- tems, the Interstate System as the most urgent, and provided for it authorizations unprecedented both in length of time and amount.
That the Congress did not overlook the broader needs situation, however, is seen in Title II, The Highway Revenue Act of 1956, that imposed the higher tax schedules to finance the program enacted in Title I. As noted before, it was the joint consideration of highway needs by the Committee on Public Works and the Committee on Ways and Means in 1956, also unprecedented, that cleared the way for
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