Under section 13 of the Federal-Aid Highway Act of 1962, the Secretary of Commerce was authorized, in cooperation with the State of Alaska, to make a study of the adequacy of the Federal-aid highway system, to make specific recommendations for construction of roads through undeveloped areas, and to recommend a feasible program, including the sharing of cost responsibilities, for implementing the recommendations. Although the Act authorized funds, no funds were appropriated in that year, so the study could not be undertaken until $400,000, half the original authorization, were appropriated in 1963. Through the Bureau of Public Roads, two consultants were employed, qualified by experience in economic and engineering areas and by previous work in Alaska. Their report, completed early in 1966, was forwarded to Congress in May of that year.
Briefly the consultants found that the current Federal-aid systems, primary and secondary, adequately served the population in Alaska, in fact more nearly meeting desirable standards than in any of the “lower 48” States. It could be anticipated that the entire system could be brought up to desirable standards within 16 years with the continuation of the current rate of authorizations. As to highway needs in undeveloped areas, the consultants found virtually none. Although it was recognized that natural resources would be developed, what specific resources in what specific areas would warrant development could not be forecast. Thus, the consultants concluded that a small amount of funds should be available to draw upon when and if a potential resource development prospect appeared.
What Alaska needed most was assistance in funding maintenance. Extraordinary maintenance problems existed because of snow and cold, and the use of Federal aid for maintenance was, as elsewhere, prohibited by law. Because of its great area, Alaska received a large amount of Federal aid in relation to other States. Alaska’s matching ratio, because of the preponderance of land in public holding, was about 5 percent State and 95 percent Federal, relatively little State matching in contrast to other States. However, with small population and few vehicles, even with relatively high road-user taxes, virtually all highway revenue was required to match Federal aid, and maintenance had to be financed from general funds.
The reasoning, perhaps unexpected, with respect to the place of the highway in resource development, was interesting and could well be an example for those promoting development in other areas. Alaska is tremendously rich in natural resources, but little was then economically feasible for development due to its remoteness from population centers and its dependence upon highway transportation. Its timber resources are close to tidewater. At the time of the study, oil production was close to or in tidewater. Exploration of the vast potential of the North Slope would not be brought on simply by the existence of a highway, although if other factors made its exploration feasible ( as now has occurred), a highway to permit pipeline construction and maintenance would be a necessity. Similarly the Rampart Dam, when and if justified, would require a highway connection, but building a highway to the site would hardly initiate its construction. Tourism, a growing factor of the economy despite high prices and the great distance from population centers, would require no new highway development, for most of its scenic features, its glaciers and mountain peaks, and its hunting and fishing areas are within easy reach of the present system. And there is no way to judge whether any of the widely scattered mineral resources would be feasible for development simply as a result of highway improvement. Thus, the recommendation of a small “drawing account” for development roads should resource development in unanticipated locations be found feasible.
The consultants proposed three alternates. The first would authorize additional appropriations from general funds to aid the State in maintenance and in constructing tertiary non-Federal-aid system development roads where and when opportunity appeared. The second would allow the use of regular Federal-aid funds for tertiary road construction. Both alternates would provide also for improvement in the ferry system, as the “marine highway” system is economically more desirable than attempting to provide land transportation between certain points, such as connecting Juneau, the capital, to other parts of the State. The third alternate simply would authorize the use of a portion of regular Federal-aid funds for maintenance. All three alternates contemplated special authorizations for a 5-year period.
The Department of Commerce rejected the first alternate as not complying “with the President’s guidelines for budgetary ceilings and fiscal management.” It recommended the acceptance of the second and third alternates. Agreement could not be reached within the Administration, which held that to make special concession to Alaska was inconsistent with a policy of equal treatment to all States and that authority to use Federal-aid funds on nonsystem roads or for improving the ferry system was not appropriate. It was also held by some that the 10 percent of construction funds for maintenance was excessive, but perhaps any construction funds unutilized might be used for maintenance, only at a rate declining from all of that amount in the first year to none after 5 years.
Finally when no agreement could be reached within the Administration, Congress brought pressure to produce the report which led the Secretary of Commerce to transmit the report in May 1966 with his recommendations unchanged, but included in the report a letter to him from the Bureau of the Budget explaining its disagreement.
The controversy proved quite academic, however, by the Federal-Aid Highway Act of 1966, which was enacted 4 months later. The Congress accepted the evidence of need as described in the report by authorizing Federal-aid funds for development roads, and increasing the amount of “construction and maintenance” by $14 million annually for a 5-year period, 1968 through 1972, to be appropriated from general funds, not the Highway Trust Fund.
