Page:America's Highways 1776–1976.djvu/256

 three factors of population, area, and post road mileage. The formula adopted for the Secondary System was the same except that rural instead of total population was used. The urban apportionment was based on the sole factor of population of municipalities and other urban areas of 5,000 or more.

The Act added to the law a provision authorizing the States to use 10 percent of apportioned Federal funds without matching to eliminate hazards of highway-railway crossings on the Federal-aid systems. The railroads were to contribute 10 percent of the construction cost of those projects benefiting them.

During the 1940’s, the States strove to improve their revenue positions by increasing the tax rates on motor fuel. In 1947, 8 States raised their rates, and the average rate for all States rose from 4.16 to 4.25 cents a gallon. During 1949, 13 States increased their rates, bringing the average State rate to 4.52 cents.

Regardless of what originally precipitated the adoption of user taxes, no carefully worked out theory preceded their adoption. The theoretical foundation was built after the tax framework was erected. The structure of highway taxes was an evolution brought about over a long time by balancing the demands of conflicting interests with the necessities for the development and support of highways.

The Rio Grande Gorge Bridge, located near Taos, N. Mex. carries the highway over the Rio Grande 650 feet below. Originally, Federal aid was limited to $10,000 per mile for bridges under 20 feet and 50 percent of the cost for bridges over 20 feet. Because bridges are so costly to build, many are financed through bonds or as toll facilities.

Part of the pressure that led to the development of a more organized body of highway tax theory during this period was produced by a changed attitude on the part of the railroad industry. The industry had been a supporter of highway development in the beginning, viewing road improvements as a means of providing better feeders to their lines. At that time they paid taxes without complaint. But as highways encouraged long-distance freight movement by truck, they began to realize that they were facing serious competition. Fearful of the results of growing diversion of traffic, they became active critics of both the operating and the business practices of highway carriers and of the extent to which such carriers paid taxes to support the government expenditures made in their behalf, i.e., the extent of the public subsidy of the motor carrier industry.

The framework of highway tax theory is founded on the principle that taxation for the support of highways should be assessed in proportion to benefits received. There had been nearly universal acceptance 250