to $2.2 billion for fiscal year 1959, and from $2.2 billion to $2.5 billion for each of the fiscal years 1960 and 1961. These increases were partially in recognition by the Congress that the Interstate System was going to cost more than had been provided for in the 1956 Act; partially because Congress desired to accelerate progress toward completion of the System; and partially because of the recession in the economy.
The plants and vegetation used along I-64 in Greenbrier County, W. Va., were selected to blend with the natural vegetation on the rolling hills of the Greenbrier River Valley.
More important perhaps than the increases in authorization levels—in its ultimate impact on the program financing—was the provision of the 1958 Act which set aside the pay-as-you-go provision of the 1956 Act for 2 years and directed apportionment to the States of the full amounts authorized for fiscal years 1959 and 1960, namely, $2.2 billion and $2.5 billion. This provision in the 1958 Act for expanded and accelerated expenditures was not matched by a commensurate provision for additional Trust Fund revenue.
The net effect was to advance appreciably the time when the Federal-aid program would enter a period during which annual expenditures would exceed Trust Fund revenues. And when the pay-as-you-go amendment again became effective after its 2-year suspension, it was obvious that Federal-aid highway program financing was in need of adjustment.
Temporary Relief
A report on the study of allocating highway costs and benefits and a new estimate of the cost of completing the Interstate System, both called for by the 1956 Act, were expected to be completed early in 1961. It was generally assumed that a long-range solution to Federal-aid financing problems should then be undertaken and that, in the meanwhile, temporary relief measures would be sufficient.
Consequently, early in 1959 President Eisenhower proposed a temporary increase of 1½ cents per gallon in the Federal motor-fuel tax. The Congress, in the Federal-Aid Highway Act of 1959, increased the tax from 3 to 4 cents per gallon for the period from October 1, 1959, to June 30, 1961.
The 1959 Act also reduced the Interstate authorization for fiscal year 1961 to $2.0 billion. When the time came to make the apportionment in October 1959, however, the pay-as-you-go provision made it necessary to reduce the apportionment to $1.8 billion.
In addition, because of the necessity for correlating the level of anticipated Trust Fund revenues and expenditures, the Bureau of Public Roads in 1959 instituted a program of “reimbursement planning” under which a limit was set quarterly on the rate at which each State could obligate funds to contracts in order to assure that Federal payments of ultimate reimbursement to the States for work accomplished could be made within the limits of the available Trust Fund balance.
The 1961 Estimate
In 1961 the second estimate of cost of the Interstate System was submitted to the Congress. Again, as in the 1958 estimate, the total cost was $41 billion with a Federal share of $37 billion.
The unit price base for the 1961 estimate was the average unit price level in each individual State for calendar year 1959. There had been a lowering of construction unit price levels between the 1956 level used in the 1958 estimate and the 1959 level used for the 1961 estimate. With this lowering of construction prices, the construction costs reported in 1961 were reduced. This was offset by including the costs of administration and research and planning, which were omitted from the 1958 report. A comparison of the 1958 estimate and the 1961 estimate is shown in Table 1.
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