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FINANCIAL PLANNING FOR AN EXPANDED HIGHWAY PROGRAM

OF THE NATIONWIDE ESTIMATE OF $101 BILLION IN IMMEDIATE HIGHWAY NEEDS, $45 BILLION WERE FOUND ON THE FEDERAL-AID SYSTEMS BELOW THE LEVEL OF THE INTERSTATE; AND $33 BILLION ON ROADS AND STREETS NOT ELIGIBLE FOR FEDERAL AID. ENGINEERING PLANS TO MEET THESE NEEDS MUST BE MATCHED BY EQUALLY ADEQUATE FINANCIAL PLANS. A SUCCESSFUL FINANCIAL PLAN SHOULD (1) PROVIDE FOR COMPLETION OF THE ACCELERATED HIGHWAY IMPROVEMENT PROGRAM WITHIN THE DESIRED NUMBER OF YEARS; (2) TAKE CARE OF MAINTENANCE, ADMINISTRATION, AND OTHER REGULAR COMMITMENTS OF THE HIGHWAY DEPARTMENT; (3) MEET INTEREST AND PRINCIPAL CHARGES ON THE DEBT, IF ANY, INCURRED IN FINANCING THE PROGRAM; AND (4) PROVIDE SUFFICIENT ADDITIONAL REVENUES TO MEET THE GRADUALLY INCREASING NEEDS FOR THE REPLACEMENT AND EXPANSION IN THE YEARS FOLLOWING COMPLETION OF THE PROGRAM. A TECHNIQUE FOR THE EXAMINATION OF ALTERNATE FINANCIAL PLANS, THE "CUT-AND- FILL" METHOD, WAS APPLIED TO THE NEEDS OF THE FEDERAL-AID SYSTEMS (OTHER THAN INTERSTATE) AS THEY MIGHT EXIST IN AN AVERAGE STATE. THE INDICATIONS ARE THAT SUBSTANTIAL INCREASES IN THE RATES OF STATE TAXES OF HIGHWAYS MUST BE BROUGHT ABOUT IF THESE SYSTEMS ARE TO BE IMPROVED TO ADEQUACY WITHIN A RESONABLE NUMBER OF YEARS. FINANCING WITH CURRENT REVENUES ONLY WOULD REQUIRE DRASTIC TAX INCREASES DURING THE PERIOD OF THE ACCELERATED PROGRAM, WITH THE PROSPECT OF A CONSIDERABLE REDUCTION AFTER ITS CLOSE. BY RESORT TO BOND ISSUES SUCH A PROGRAM MAY BE FINANCED BY A RELATIVELY MODERATE INCREASE OF TAX RATES EXTENDING OVER THE ENTIRE PERIOD OF THE BOND ISSUE. ALTHOUGH THE PROBLEM WILL BE FOUND DIFFERENT IN EACH STATE AND THE DECISIONS MADE WILL BE GOVERNED BY PREVAILING FISCAL POLICY, THE PROCEDURES FOR CRITICAL STUDY OF DIFFERENT FINANCING PROPOSALS ARE APPLICABLE IN ALL CASES. /AUTHOR/

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  • Supplemental Notes:
    • Vol 35, pp 14-28, 8 FIG, 5 TAB. Distribution, posting, or copying of this PDF is strictly prohibited without written permission of the Transportation Research Board of the National Academy of Sciences. Unless otherwise indicated, all materials in this PDF are copyrighted by the National Academy of Sciences. Copyright © National Academy of Sciences. All rights reserved.
  • Authors:
    • St, CLAIR GP
    • Todd, T R
  • Publication Date: 1956

Media Info

  • Media Type: Digital/other
  • Monograph Title: Proceedings of the Thirty-Fifth Annual Meeting of the Highway Research Board, Washington, D.C., January 17-20, 1956
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00201036
  • Record Type: Publication
  • Files: TRIS, TRB
  • Created Date: Aug 8 1971 12:00AM