Funding the Indiana State Highway Commission

When the Indiana State Highway Commission was recreated in 1919, the subject of funding came up in a hurry. A big part of that was the fact that many people thought that the whole concept of a highway commission was counter to the Indiana Constitution of 1851. (See Indiana State Highway Commission, and Its Delay for more information.) But the Federal government was passing out money for highway systems throughout the country. But only if the state had someone to give the money to…as in, a highway commission. So state funding would be important, and a state highway commission to receive matching Federal funds was as important.

In 1953, ISHC Chairman Albert J. Wedeking gave an address at Purdue University outlining funding and expansion of the state highway system. “There is nothing wrong with our highways that money can’t cure,” he stated. He then went into the history of funding of the ISHC.

“Then in 1919 a state tax of 10c per $100 of taxable property was added and the new Highway Act provided that all funds collected from motor vehicle registrations and license were to be used for the development of the highway system. These funds became available for our use in 1920.” This provided the first funding to the commission, but it was not nearly enough for what that commission was charged to do.

In 1923, the first gasoline tax was implemented by the state legislature. This tax was two cents per gallon. Keep in mind that gas prices were a lot lower then…as far as actual price, not adjusted for inflation. The legislature then decided that starting on 1 October 1924, the ISHC would have to give the counties $1 million a year to upkeep local roads. Again, this was found to not be enough to support both the ISHC and local governments when it came to road maintenance. The gasoline tax was increased to three cents a gallon.

The gasoline tax went up again in 1929, with the legislature approving a four cent per gallon levy. Of this, the ISHC would receive three cents, with the rest being passed onto local governments. That four cent per gallon tax was still in effect when Mr. Wedeking gave his address in 1953. Another adjustment by the legislature in 1932 required that two cents of that gas tax was to be provided to the local governments, reducing ISHC’s share by one-third.

“Then came the depression when all units of government were hardpressed and the legislature passed an act that transferred two million dollars from the State Highway Fund to the General Fund.” This took a big bite out of the ISHC at a time when it could have used it the most. Offsetting this was the Federal Government and its assorted alphabet agencies set up to help people get some sort of work. There were projects all over the state that would be helped through these agencies.

“In 1937, an act created the Motor Vehicle Highway Account, and to this account were credited all registration fees, fuel taxes, license fees, weight taxes, etc. After deducting the expenses of collection, a small appropriation was given to the Department of Public Safety for policing the highways. $1,250,000 was given to cities and towns, one-third of the remainder for counties; and the balance went to the State Highway Commission.” It is unclear how much they actually pulled in for this fund.

More legislation taking money away from the ISHC was passed in 1941. “In 1941 legislation was enacted that continued to divert $1,250,000 to the State General Fund, and increased the share for cities and towns to $3,000,000 and gave $12,000,000 to the counties with the State Highway receiving the remainder.” The diversion to the State General Fund was removed in 1943, but all other recipients would receive totals laid out in 1941.

The Second World War would be detrimental to this funding scheme. Gasoline rationing reduced the amount of income for the State Highway Commission from $22,111,801 in 1941 to a low of $13,533, 969 in 1945. The state found itself not doing a good job with the funding that it had. Between rationing and material needed for the war effort, the state highway system suffered.

Emergency funding acts were passed by the state legislature in 1945, providing the ISHC a much needed shot in the arm. These acts would provide 63% of the money from the above funding sources to the ISHC. But this was changed again in 1947 by temporary legislation. Again, in 1949, a new law provided that 15% of the funding would go to cities and towns, 32% to counties and the remaining 53% to the ISHC.

All this while the State Highway Commission Act of 1919 required that commissioners lay out a state highway system that connected all county seats and all towns of 5,000 or more population. To this end, 3,191 miles of roads were under the ISHC responsibility at the end of 1919. As funding was expanded, by 1929 the ISHC was responsible for 5,065 miles. This increased to 9,769 miles by 1939 and a decade later, in 1949, it had increased to 10,529 miles.

As the state miles increased, the number of miles maintained by counties, cities and towns went down. Keep in mind that originally the ISHC had no responsibility for state highways in towns of 3,500 population or more. With the state take over of these routes, local maintenance went down again. But not the amount of money passed to those local entities.

“Only the increased volume of traffic has enabled the State Highway Commission to function at all.” Truck traffic was increasing at that time. But it was also brought up that it was easy to see that roads that were built in the 1920’s wouldn’t be able to keep up with traffic volumes of the 1940’s and 1950’s. Part of this was realized due to the fact that weight limits of trucks were being increased consistently over the years.

“In those early days gravel and macadam roads were often regarded as a luxury and the State Highway Commission was besieged to build any kind of a road that would take the communities out of the mud, and many existing county roads were taken over for state maintenance to comply with the law.”

“Funds were limited and the Commission had to spread itself thin in order to keep the entire state satisfied.” Wedeking went on to point out that the early roads were not built for the heavy volumes and high speeds of the state highway system in the 1940’s and 50’s. It started with roads being covered with dust preventatives, since gravel and macadam roads couldn’t just be reconstructed with the same materials. Then, later, better paving materials became common.

The entire content of this post came from the Bedford Daily-Times Mail of 16 April 1953.

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