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tions are that the Federal highway program will be extended for an additional year, if not longer, because the President has recommended an extension of the program, as have the American Association of State Highway Officials and the American Automobile Association.
No matter how the situation is viewed, it is obvious that there is no justification or need for increasing existing tax rates in the District. Taxes on gasoline in the District now constitute 31.5 percent of the retail price of the fuel (ex-tax) and equal almost 50 percent of the wholesale value. TABLE I.—District of Columbia Highway Department receipts and appropriations,
fiscal years 1939-12
TABLE II.—District of Columbia Highway Department fund, fiscal years 1947-49
TABLE II.-District of Columbia Highuay Department fund, fiscal years
1 Based on Highway Department's estimate of $6,600,000 to be derived from 4-cent gas; no estimate of receipts from 3-cent gas tax made beyond 1948.
Mr. Bates. We would be glad to hear from Mr. Howat. Is he here today?
STATEMENT OF P. Y. K. HOWAT, PRESIDENT, HOWAT CONCRETE
CO., WASHINGTON, D. C.
Mr. Howat. Yes, sir. I am P. Y. K. Howat, president of the Howat Concrete Co. We own and operate a fleet of ready-mixed trucks here in Washington.
I would like to discuss specifically the proposed 1-cent increase in the gasoline tax in the District of Columbia.
In approaching this subject, we should ask ourselves three questions and determine the answers. First, does the District of Columbia need the highway improvements that are proposed by the District of Columbia Highway Department orer the next 6 years? Second, what is the estimated cost and is the estimate of the cost of these improvements a good estimate; that is, is it a reasonably accurate estimate? And, third, is our estimated revenue sufficient to pay for these improvements and are the estimates of our anticipated rerenue over the next 6 years accurate?
Considering the first question, as to whether we need the highway improvements that are proposed. I beliere that on this point erery one
who has expressed an opinion agrees that we do need these things done. Those of us who get caught in the traffic jams on the Fourteenth Street Bridge will well recognize the need of the additional bridges over the Potomac River.
The same is equally true of those who go back and forth over the 11th Street Bridge over the Anacostia River. The underpass at Dupont Circle is long overdue, as is the grade separation at New York Avenue and Florida Avenue and on Pennsylvania Avenue at the west end of the Sousa Bridge. There are many more improvements which are desperately needed to give us just normal traffic operation on our streets, to say nothing of making our streets first class. I believe that we are all agreed that the projects that have been proposed are all very long overdue.
Our second question—what is the estimated cost and are the estimates reasonably accurate-of that I am not too sure. Most of the estimates which I have seen in the last year or so from the District Building have been ultra-conservative. Invariably, when bids are taken, the prices are much higher than the estimates. I think it is right and proper for the District Engineering Department to err on the side of conservatism in making estimates, and I realize that the lapse of time that must often occur between the preparing of an estimate and the time actual construction bids are taken must, of necessity, be so great that under our present changing conditions the estimates can be far too low. But there is one thing that is very sure, and that I think everybody will agree upon, and that is that the estimates are invariably low-not high-when bids are taken and that we need more money, not less.
Now, the next question, and I think probably the most important one-as to whether our revenue is suficient to pay for, the necessary improvements and as to whether the Highway Department estimates of revenue are accurate or not-probably because of its connection with my business, I have for years been interested in our traffic problems. As chairman of the traffic committee of the Washington Board of Trade for 4 years and as chairman of the highways committee of the District of Columbia Motor Club for several years, I came in close contact with and frequently checked on the estimates of anticipated revenue of the District Highway Fund. I have gone over very carefully the estimates which the District Building has made of their anticipated revenue for the next several years, but, as an engineer who has spent over 30 years in estimating on various projects, I am very conscious of the difficulty of making accurate cost or revenue estimates, particularly at this time.
After checking the estimates which the District Building has set forth, I looked back over the records to see how accurate the District Highway Department has been in making its estimates in past years, and I have had prepared two statements: the first showing the comparison between highway fund estimates of revenue expectancy and actual collections between the years 1939 and 1946, inclusive, and, second, a statement showing the comparison between gasoline tax estimates of revenue expectancy and actual collections. I start with the year 1939 because this is the first full year of highway-fund operation.
Mr. Chairman, I will give you a copy of this. It is a tabulation. and if you would like to follow this tabulation, I think you will find it most interesting.
The first is a statement showing comparison between highway fund estimates of revenue expectancy prepared in connection with budge: estimates and actual collections—1939-46 inclusive.
Mr. BATES. I think Captain Whitehurst went over that quite minutely.
Mr. WHITEHURST. I furnished a copy; yes.
But I would like to call attention to the fact that the first 8 years were within 412 percent accuracy, which I think is remarkable.
And on the next page, the gasoline revenue in 1945, he hit it within one-half of 1 percent, and the worst out of the eight was 8 percent, and the total is only 21,2 percent off.
These figures show a remarkable ability of the District Highway Department to estimate or guess or whatever it is they do to arrive at the proper conclusions to hit the nail on the head. These estimates are little short of miraculous. Considering the District Highway Department's past 8 years of estimating, aside from any argument that anybody can put up to the contrary, 1, Congress, and the people of the District of Columbia have a right to feel that the present estimates are accurate.
Since 1930 I have owned and operated a fleet of concrete mixer trucks in the District of Columbia, and I don't see how any truck owner who operates largely within the District of Columbia can intelligently oppose the proposed 1-cent increase in the gasoline tax. The entire amount of money collected from this 1-cent tax goes to improve the streets over which we truck owners operate and thereby directly, not indirectly, the money which we have paid in this tai comes right back into our pockets through improved street operation and less delays in transit. And, of course, while this is very true of those in my particular business, it is equally true in any truck operation and to a lesser degree true of the operation of all automobiles on the streets of Washington.
In conclusion, I want to say that I feel very resentful toward the oil lobby which has been so actively opposing this 1-cent increase in the gasoline tax. I can't for the life of me understand why they should so vigorously oppose it, and I am particularly resentful of the fact that, while they have been so vigorously opposing this tas, the oil companies in the District of Columbia have on two occasions increased the price of gasoline. On February 21, they increased the price of gasoline three-tenths of a cent a gallon and on March 13 an additional 1-cent increase. I am sure that most of us would rather pay the District of Columbia a 1-cent tax-every penny of which goes to improve the District of Columbia streets--than we would to pay the oil companies 1%10 cents per gallon-every penny of which goes into the pockets of the oil companies.
Thank you, Mr. Chairman.
Mr. BATEs. Thank you very much, Mr. Howat. And because of those fine estimates that the Highway Department was able to make
over a period of years, I now ask that they project them 3 or 4 years ahead so that we can estimate what the receipts will be, and also project the program along with it, and see how the thing balances out from the standpoint of revenue needs.
Mr. Howat. In our business, when a man does a job very well in the past 8 years, we have pretty good confidence in him for the coming
Mr. BATES. I do not know what you mean, Mr. Howat, by this so-called oil lobby. I have not seen any evidence of it myself. The first one I heard was Mr. Keller last week and again today. I presume they have an industry they are representing. They want to make known how they feel about the matters affecting that industry, the same as you would, yourself.
I would be interested to know why there is an increase in the gasoline cost to the consumer, but I suppose Mr. Howat could not make any reply to that statement whatever. Mr. KELLER. I have something on it. Mr. Bates. Could you abbreviate what you are going to say? Mr. KELLER. Very brief. Mr. BATES. Fine. Of course, you heard this morning where the chairman of the Committee on Municipal Finances, General McCoach, made the suggestion that if this tax increase on gasoline took place and if the revenue reached a certain amount, that then they take the additional 1-cent tax off. What is your reaction to that?
Mr. KELLER. Our reaction to that, Mr. Chairman, is not favorable, because we do not think it works out.
In the specific problem they have, the Board of Trade recommended an increase of 1 cent per gallon in the gas tax, and an increase in the inspection fees for motor vehicles of 50 cents to $1.
In the proposed gasoline-tax increase, the Board recommends that the enabling act authorize and instruct the Commissioners to reduce the gasoline tax to 3 cents whenever estimated receipts and balances on hand exceed by $2,000,000 estimated expenditures and also authorize and require the Commissioner to again increase the tax to 4 percent whenever the working balance falls below $1,000,000.
That is a very fine sort of thing if the receipts and expenditures could be controlled, but it would never get above that amount when the same people who were controlling the rate would be controlling the expenditures.
Mr. BATEs. In other words, they could build up the rate of it, is that it?
Mr. KELLER. Yes, sir. I think they would find some way of spending it.
Mr. BATES. Go ahead.
Mr. Chairman, I want to make it clear, No. 1, we are not lobbying in any sense of the word. We are here as any other industry would be, to present its views in open hearing on the record so that anybody can hear.