By O.T. BANTON
Engaged in newspaper work 52 years, he was legislative writer for Lindsay-Schaub newspapers for 18 years prior to his semiretirement in 1962. Banton's first 15 years as a newsman were with the Journal and Sentinel in Milwaukee. He also served as chairman and public member of the old Illinois Highway Study Commission.

What it means to Illinois

Ford's gas tax proposal: The good news and the bad news

PRESIDENT FORD'S HIGHWAY proposal, messaged to Congress July 7, bears both good and bad news from the viewpoint of the Walker administration. The good news is that the state could get the unrestricted money from another cent of the gasoline tax, but the bad news is that to do so, Illinois must enact an additional one cent gas tax, and it is well known that Gov. Dan Walker has vowed not to increase any taxes. If Illinois did levy the added tax, the federal gas tax in this state would be decreased by one cent, so that the proposal would be practically painless for the taxpayers. "In this way," the President said, "the ability of State and local governments to deal with their own transportation problems will be improved, but costs to the highway user will not be increased."

Highway officials say that the gas tax proposal would save any loss from tax money going to Washington and then being sent back to the states. In addition, there would be no federal restrictions on how it could be used. But if the General Assembly voted for the tax increase, would it be distributed under the existing formula that applies to most of Illinois'' existing 7½ cents per gallon tax? This formula gives the state only 35 per cent for use on its primary highway system. The rest is divided among counties, cities, and townships. If the governor blocked the tax increase, the federal government would continue to collect the same one cent per gallon tax in Illinois, but it would go into the federal treasury and do Illinois no particular good.

Federal aid for maintenance
The Ford administration's bill is H.R. 8430, introduced by U.S. Reps. Robert E. Jones (D., Alabama) and William H. Harsha (R., Ohio). A feature of the bill that is attractive to Illinois officials is the one which allows federal highway aid to be used for maintenance of interstate highways. Maintaining these routes, with their 300-feet wide rights of way and four lanes of pavement, already has started to be a heavy drain on the state's highway finances, and as the pavements grow older, maintenance costs will increase.

Gov. Walker, it is reported, sees as a "step in the right direction" the bill's provision that some 38 present categories of federal aid for highway work be reduced to four, since this would give the states much greater choice in use of federal funds. The four new categories would be: the interstate system; urban and suburban areas over 50,000 population; rural highways; and safety programs. Funds for the latter three categories could also be used for projects to improve public transportation.

Highway Trust Fund jeopardized
The Ford proposal has stirred special concern among organized highway builders and users because it would emasculate the Highway Trust Fund. This fund was set up by Congress in 1956 to finance construction of the 42,500-mile interstate highway system, and later expanded to provide federal aid for state and county roads. Gasoline taxes and excise taxes on motor vehicles, tires, parts and lubricants that now go into the trust fund have long been regarded as "highway user taxes," and there has been general acceptance of the principle that such tax should be used for highway purposes. Illinois highway division officials have held this view. The motor fuels and trucking lobbies in Washington doubtless will fight the highway bill with all the pressures they can muster and they would have much public sentiment behind them. Ford's plan calls for putting returns from two cents of the federal gasoline tax into general revenue and retaining the other cent in a greatly reduced trust fund. The trust fund would also continue to receive most of the excise taxes that now go into it. The sole purpose of the new trust fund would be to finance operation and maintenance of the interstate highways. Realistically, even if two cents of the federal gas tax were to go into the federal general fund, strong pressures to apply this money to highway purposes would not abate.

Analyze effect on Illinois
State highway engineers and statisticians have been analyzing the federal bill to try to determine what it would mean to Illinois if passed in its present form. The bill, covering fiscal years 1976-1980, provides for' $3.25 billion dollars being available for fiscal year 1976 and the same amount for fiscal 1977 for the interstate system; with $3.55 billion in fiscal 1979 and $3.7 billion in fiscal 1980; $1,05 billion each year for the rural highways in the states; $800 million each year for urban transportation assistance; $400 million a year for highway safety improvement programs, and $35 million for fiscal 1976 for control of outdoor advertising and junkyards, with $65 million each year for this purpose in fiscal 1977-1980.

The highway division analysts see the bill as providing $96 million for Illinois on its non-interstate or federal aid primary and secondary roads for fiscal 1977, as compared with $127 million allotted to this state for fiscal 1976 under present operation of the trust fund. If the state also had benefit of another cent per gallon of gasoline tax, it would have $146 million in fiscal 1977. If it had only 35 per cent of the latter, its 1977 allotment would be $ 113.5 million, or $13.5 million less than it is getting for the present fiscal year.

Illinois' share of interstate highway money, for which the federal government provides 90 per cent, would be extensively reduced under the federal

October 1975 / Illinois Issues / 309

Ford's gas tax: good, bad news

highway bill, according to state highway officials. Under the bill, the state would get $84 million in fiscal 1977, compared with $143 million which is the current fiscal 1976 allotment. That should not hurt, though, the state road officials say, since Illinois is much farther along in building its interstate highways than most states. Illinois is above 90 per cent (average of other states is 80 per cent) in having its interstate routes completed or under contract. Only three interstate routes in Illinois remain to be put under contract: parts of I-274 which is the Peoria beltline; all of I-255 which is the East St. Louis beltline; Chicago's controversial Crosstown (I-494) which may never be built; and a few short stretches of I-55 (Chicago to St. Louis). Illinois' heavily reduced share of federal aid money for the interstate work is due to the federal administration's bill emphasis on completion of interstate segments between systems and low priority on finishing segments within cities.

Final action months away
With the highly controversial provisions it carries. Ford's bill is certain to get an extensive overhauling in Congress, with final action likely to be several months away. Several of the states, including Illinois, have prepared proposed changes to present during House and Senate hearings on the measure in Washington. The concept that highway users' taxes should be used only for highway purposes and that diversion of such taxes for other purposes is a betrayal of those who paid them, will die hard,

The Ford administration bill is one of several 1975 Federal Highway Bills now before Congress. Another highway bill has as its chief sponsors Sens. Ted Kennedy (D., Massachusetts) and Lowell Weicker (R., Connecticut). One sponsored by Sen. Lloyd Bentsen (D., Texas) already has been in hearings for several weeks. The highway bill that eventually will emerge from Congress is almost certain to be a "conglomerate," it is believed by Langhorne Bond, Illinois Department of Transportation secretary, and his highway division associates.

310 / Illinois Issues / October 1975