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The true facts are that approximately $4,456,633 will be available for Federal aid during this 3-year period from existing revenue sources. Here again the Petroleum Committee attempts the impossible of maintaining 1947 levels in operating costs which results in a figure which is satisfactory for the purpose of their report. Tabulation showing funds available for Federal aid follows:

Estimated revenues.

Balance and credits__.

Total revenue.

Total expenditures

Funds available for matching..

$20, 654, 600 2,010, 085 22,664, 685 18, 208, 652

4,456, 633

Total estimated expenditures are based upon actual 1947 appropriations and rates of expenditures, 1948 estimates now before Congress and projected estimates for the fiscal year 1949. It is submitted the Petroleum Committee is in no position to determine the requirements of the Department of Highways that their estimated expenditure of $15,449,356 is in error.

The Petroleum Committee then asks:

Has any money already been set aside to match this Federal-aid allocation? And they state:

Yes; the 1946 budget provided approximately $1,600,000 to match part of the first year's allocation, leaving about $7,322,000 to be matched.

That statement is correct.

The Petroleum Industry then inquired:

What is the District's share of Federal funds in the postwar highway building program?

And they stated:

A total of $8,922,000 to be matched dollar for dollar except that 10 percent of the total allocation may be used for grade-crossing projects. These funds are apportioned to the various types of roads as follows:

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Will the District be able to match all Federal-aid funds during the next 3 years?

And said:

Yes. As already shown, the Highway Department will have approximately $7,886,474 for matching Federal-aid grants during the 3 years ending June

The true facts are that the District will not be able to match all Federal-aid funds during the next 3 years from present revenue sources. After fixed expenses and operating costs are deducted approximately $4,456,633 will be available for Federal-aid work. This amount is $2,865,367 less than the amount required to match Federal allocations and it represents a net loss of that amount to the District of Columbia. If an additional 1-cent gasoline tax is imposed it has been stated that the 1-cent tax increase would cost the motorists of the District of Columbia $1,500,000 annually. To the contrary, if the tax is not imposed a net loss of $2,865,367 in funds and $5,730,734 in highway work will result.

The committee then inquires:

What amount of funds will be available for construction purposes during the next 3 years?

And they state:

A total of $24,583,474 as follows:

Available for minor capital outlays__

Appropriation for completion of the South Capitol St. Bridge_.

Federal-aid funds____

District funds:

Funds available for matching_.

Appropriated for matching from 1946 budget_-_

Total

$3,375, 000

2,800, 000

8,922, 000

7,866, 474

1, 600, 000

24, 583, 474

The true facts are that approximately $18,288,266 will be available for construction purposes during the next 3 years from present revenue sources and not $24,583,474 as estimated by the petroleum committee. Tabulation of this amount follows:

Available for minor capital outlays..

Appropriation for completion of South Capitol Street Bridge_

Federal aid funds__

District funds:

Funds available for matching-

Appropriated for matching from 1946 budget.

Total

$3,375,000

2,800,000 6,056, 633

4, 456, 633 1,600,000

18, 288, 266

In determining funds available for construction purposes the petroleum committee has again held operating costs to the 1947 level and have entirely disregarded increased labor, material costs and the actual highway facility requirements of the District of Columbia. The petroleum committee then inquires:

Would District motorists be the only group affected by an increase in automotive operating costs?

And state:

No. Every resident of the District of Columbia would be affected in one way or another, because every commodity that they consume or produce for consumption must at one time or another move by motor transport. Added transportation charges would tend to increase the cost of all consumer goods, thus impairing the purchasing power of the people.

The true facts are that the 1-cent increase in gasoline tax is not the only factor to be considered in arriving at the economy of motor transport. In stating that added transportation charges would tend to increase the cost of all consumer goods the petroleum committee

improvements will be an aid to motor transportation in that congestion will be lessened and traffic generally made safer, faster and more orderly. The tax which any motorists would pay is estimated to be $5 per year assuming that all gasoline were purchased within the District of Columbia.

The committee then inquires:

What is the major problem confronting the District's postwar highway program?

And state:

The major problem is the shortage of materials, manpower and equipment, not one of available funds. Indicative of this fact is that the District, as late as July 31, 1946, had only approximately $1,200,000 worth of highway projects under construction, of this total approximately $546,000 represented Federal funds which is less than one-fifth of the District's annual Federal-aid apportionment under the 1944 act. Also, the Federal Government has appropriated only $175,000,000 for the country as a whole out of a potential $1,000,000,000 for the first two postwar fiscal years.

The true facts are that the availability of funds is the major problem confronting the District's postwar highway program. The petroleum committee states that the major problem is the shortage of materials, manpower and equipment and that as of July 31, 1946 the Department of Highways had only approximately $1,200,000 worth of highway projects under construction. This is false. On this date there was approximately $4,053,754 worth of highway projects under construction. Of this total approximately $1,215,000 represented Federal funds. Shortage of materials, manpower and equipment has never been a problem.

Of the first year's program all of the projects except one have been placed under contract and many are completed. The one exception has been delayed due to our inability to secure necessary permission to cross park lands. This permission has been obtained and bids on this project will be received within the next several months. The plans and specifications of a good portion of the second year's program have been approved for construction and bids have been received on several of these jobs. Our postwar program is considered current and well above the national average of work placed under construction.

The petroleum industries committee in compiling their brochure in opposition to an increase in the gasoline tax rate for the District of Columba devoted the first four pages thereof to developing a premise which would indicate that the imposition of an additional 1-cent tax is not necessary. The remaining 12 pages of the brochure consist of general comments, tables and statements concerning highway financing within the District of Columbia, all predicated upon the premise previously established. The premise so developed is false and misleading and this analysis has been confined to only this section of their brochure. If it is clearly understood why their premise is false, the remainder of the report is of no significance whatsoever.

In developing their premise, which is intended to show that the District of Columbia has ample revenue from existing sources to finance an adequate highway development program, the petroleum committee places emphasis upon three main points:

(1) Revenue expectancy during the 3-year period under discussion. (2) Total expenditures during the same period.

(3) Through a subtraction of these figures a balance which they

The first item, which is emphasized is revenue expectancy. They claim an estimated $21,442,000 in revenue will be collected during this 3-year period. Our own estimate of revenue during this period is $20,654,600. There is not a great deal of difference in these two figures and in any event we concede that this is a question of estimating and that the petroleum committee is entitled to its own view of the factors which go into an estimtae of this nature.

The second item, which is emphasized in the petroleum committee's brochure is that of estimated expenditures over the 3-year period 1947, 1948, and 1949. In this field we do not concede that the petroleum committee is competent to estimate the funds necessary to be expended in the maintenance and development of the highway system of the District of Columbia. To suit their purpose the committee has seen fit to estimate the expenditures of this period based on holding the 1947 level of appropriations. Estimates for the 1947 fiscal year were prepared in August and September of 1945 and are entirely irrelevant as a yardstick by which to measure future expenditures.

The petroleum committee entirely disregards the fact that the city of Washington has grown tremendously during the recent war and that the best known authorities predict a continued growth. Entirely disregarded also is the fact that during the recent war expenditures were curtailed due to the emergency and that there has resulted a great backlog of work to be accomplished if the city of Washington is to furnish highway facilities consistent with the need therefor. The economists who gave consideration to these matters apparently also saw fit to discount the fact that labor, material, and contract costs are greater today than they were before the war or in August and September of 1945, when our 1947 estimates were compiled. The financial program for a city must be based upon the actual requirements of that city and the financing must be cut to fit the needs of the city just as surely as cloth must be cut to fit the needs of an individual in tailoring a suit.

The formula of merely multiplying the 1947 appropriation by three to arrive at a sound financial program for the 3-year period, as was done by the petroleum industries committee, is not sound in fact or logic. The highway requirements of the District of Columbia have been thoroughly reviewed and it can be stated without any fear of contradiction that present sources of revenue will not suffice if the District of Columbia is to solve the downtown congestion problem and provide highway facilities necessary for the continued growth and prosperity of this city. An estimated $18,208,052 will be required for operating expenses (work other than Federal aid) during the 3-year period under discussion and not $15,449,356 as stated by the petroleum committee.

The third item, the balance available for matching Federal aid, has been arrived at by the petroleum committee by subtracting the false and misleading estimate of expenditures from the estimate of revenues to be collected during the same period. The result, that $7,886,474 is available for matching Federal-aid allocations, is entirely erroneous in that it is predicated upon the false premise that only fifteen million odd dollars will be required for operating expenditures, whereas the true fact is that a little over $18,000,000 will be necessary for this purpose. When the most accurate estimates of both

mated $4,456,033 remains for matching Federal-aid allocations. This is $2,865,367 less than the amount necessary if the District of Columbia is to avail itself of the benefits of all Federal-aid allocations made and to be made to the District of Columbia. It would be well to analyze this figure. The petroleum industries committee has stated that the imposition of an additional 1-cent tax on gasoline will cost the motorists of the District of Columbia an estimated $1,500,000 annually. This is true in its narrowest sense.

However, it can be pointed out that if the 1-cent additional gasoline tax is not imposed the motorists of the District of Columbia will actually lose an estimated $2,865,367 in Federal aid allocations which could not be matched by the District of Columbia due to shortage of funds. Federal aid work is performed upon a 50-percent matching basis and this would mean the loss of an estimated $5,730,734 worth of highway improvements to the motorists of the District of Columbia. In conclusion, the following points can be emphasized:

(1) No great dispute can be had with the petroleum industries committee's estimate of revenues.

(2) The petroleum industries committee's estimate on expenditure is not based on fact and should be disregarded. The committee has not made a study of the District of Columbia requirements upon which to predicate such an estimate and has arbitrarily and for purposes of arriving at a satisfactory answer, assumed a continuation of 1947 expenditures.

(3) If the petroleum industries committee's estimate for expenditures is found to be in error the resulting funds available for Federal aid highway improvements is also in error and their entire case is found to be unsound.

(4) The Highway Department estimate of expenditures has been computed by officials with many years of experience in local highway financing and a ministration and is predicated upon the actual requirements of the District of Columbia. If this estimate of $18,208,052 is accepted as being more nearly correct than the arbitrary figure of the petroleum industries committee, then it can readily be seen that there will not be sufficient funds from present sources of revenue to finance the Department of Highways' improvement program.

The additional 1-cent gasoline tax is necessary in the interests of the city. Highway users generally are in favor of a 1-cent increase. Only the petroleum industry and such opposition as they have engendered by misleading propaganda are against the increase.

Mr. BATES. Is that the whole story, Mr. Harrison?

Mr. HARRISON. Yes, sir. Thank you very much.

Mr. BATES. You are going to prepare those projected revenues over not only those 3 years but the other two, and then the expenditures, and you are going to give us a list of projects which you have scheduled?

Mr. HARRISON. They are contained in this report. However, I would be glad to pick them out for you and put them on a separate

paper.

Mr. BATES. I wish you would. That would help out a good deal, because we have so many reports to wade through I want to make a special study of this phase alone.

Will you please contact Mr. Harrison, to straighten it out, and also

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