Finance of the Construction and Upkeep of Roads.—Provision of Revenues.'
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Hungary.
A. National Roads.—Built) managed and maintained by the State, but with contributions from towns and communes. The amount of these contributions is based on the difference between the higher cost of maintenance of the national roads within the town or commune in question, and that of similar roads in the immediate neighbourhood in the open country, account, however, being taken of the economic status and the taxable capacity of the town or commune.
Further resources are the power to collect tolls (which, however, are being gradually abolished), the sums realized front the sale of grass, timber and fruit crops, fines for offences, sale of old tools and installments and of old materials.
B. Provincial Roads.—The resources for these roads consist of:—
(a) The local road tax, which is based on the Government tax and limited in amount.
(la} Contributions in kind by those who pay no direct taxes. (c) Tolls on station roads, the right to which may be granted by the Minister of Commerce, for, as a rule, not more than 10 years. They are usually collected by the railway companies, who take 10 per cent, of the gross receipts.
(d) State grants.—These are given in the first place to counties and towns with roads of strategical importance, and also when the current expenditure would otherwise cause the local road tax to exceed the maximum allowed. The Minister of Commerce may also grant special subsidies for extraordinary expenditure. If the Government grant exceeds one-third of the total coat, the Minister of Commerce may carry out the work himself. The State is taking over some 400 kiloms. of these roads every year. C. District Roads.—" Parish communication ways."—The cost of construction, management and maintenance of these are jointly borne by the interested parishes or communes formed into a union for this purpose, while commercial and industrial undertakings which are interested may be included in the group. For these also the Minister of Commerce may grant the Tighe to collect tolls, and contributions may be obtained from railway companies. No Government grants are directly given for this class of road, but subsidies may be granted by the counties, and through this channel Government moneys may be utilized on such of these roads as are specially important.
D. Vicinal Roads.—These nelude " communal or field roads," which serve exclusively the purposes of a single eorn;mune, which, therefore, bears all the cost, and roads or ways built by private individuals, companies or associations for -public use, the costs of construction and upkeep of which are borne entirely by the interested parties.
A. special class of roads which is legally recognized as such in Hungary is that of the :station roads, which connect railway stations with the nearest roads of another class. The costs of construction, management and upkeep of these are borne as follows:— By the county or town .„ ...
By the railway company ... A By the communes and ba commercial and industrial
undertakings ... A England and Wales.
A. NATIONAL Roens.—There are no such roads.
B. PROVINCIAL ROADS.—These are the so-called "main roads." which are under the control of the county councils. The expenses of these roads are met out of the general county rate, which is fixed in amount by the county councils themselves according to their needs, but may only be levied on the assessable value of land and buildings. The county councils also receive a Government grant, part of which has to be applied to certain specific services, while the balance was intended for the maintenance of roads. When first established in its present form (in 1888) this balance was considered to represent one-half of the cost of maintenance of main roads, but owing to a gradual increase in the prior charges on the fund, the amount of the balance has decreased
General Report, by G. Montagu Harris, Seeretarv of the County Councils Association, to the Third International Road Congress.
in all counties, and in one at least has entirely disappeared. The amount of the State grant which may be considered to be in respect of roads, therefore, varies in the different counties on no principle whatever. [This point of absorption for other than road purposes is serious, as it allows modern traffic to be wrongfully blamed in respect of deficiencies due to other causes.—En.] Further funds for these, and also for other roads, have been recently furnished by the establishment, in 1909, of a Government Road Board with an annual income of about £1,250,000, raised by a tax on petrol and by licence duties on motorcars. This Board may make grants to highway authorities for the construction or improvement of roads, but not for their ordinary maintenance, and, as the grants are usually given on the condition of additional expenditure by the local authority, this fund, while of -course it will have the effect of greatly improving the road system of the country, tends to increase rather than diminish the local rates.
The counties receive as a part of the Government grant a certain portion of the general taxation (licence duties) on motorcars and other vehicles, but the amount they so receive has been arbitrarily fixed without any relation to the amount of traffic on their roads, and they are unable to share in any increase in the return from such duties. The counties have themselves power to charge a licence duty on heavy locomotives (steam taaction engines), but the amount they may so charge (maximum £10 per annum) is so small as to afford no practical relief of rates, while "agricultural locomotives" are ertirely exempt. The statistics as to this class of road in 1910 are :— Urban. Total. Mileage Rural. 23,556
Total cost £1,41'2107462 £1,889,560 L32,0007'82,0622
Balance of Exchequer Contribution £1,342,119 Net cost to county rates £1,657,903
C. DtSTRICT ROADS.—El, VICINAL Roans.—These classes of roads are administered by the district councils. The expenses are paid out of the general district rate, which is fixed in amount by the district councils themselves, but may only be levied on land or buildings. There is no Government grant for the maintenance of these roads, but the county councils may contribute towards their expenses. The Road Board can, at its discretion, give grants to the district councils for construction or improvement, but they are usually made through the County Councils.
In the year 1910 there were under the rural district councils 95,020 miles of these roads, the total expenditure upon which amounted to £2,406,545.
The roads (other than main roads) under the urban district councils, part of which might come under the denomination of "town streets," had for the year 1910 a mileage of 11,837 miles and cost £1,458,903.
E. Tows STREETS.—The county boroughs have complete control of all the streets within their areas and stand in the same financial position in the matter as the county councils.
In other towns the county council is obliged to defray the reasonable expenses of the " main roads," which pass through them, although their actual maintenance may be carried out by the town authority. The latter is solely responsible for all other streets and pays for the same out of the general rate, which, as in other cases, is unlimited in amount, but may only be levied on land and buildings. In the year 1909 the county boroughs had 9106 miles of street, the total expenditure upon which amounted to £3,774,162. The balance on the Exchequer contribution account was £299,664, leaving £3,474,498 to be met out of the local rates.
In non-county boroughs the streets other than main roads had a mileage in 1910 of 4843 miles, and the expenditure upon them for the year amounted to £1,025,607.
The papers from Russia and the United States of America, while they contain many valuable suggestions to which I shall allude later, do not give general information as to the existing financial position of road administration in those countries. Financial Responsibility for Roads.
The first point which strikes one on reading the papers on this question is the almost universal recognition, in practice, that certain roads are of national rather than local importance, and that the greater part, if not the whole, of the cost of such roads should he paid for out of general taxation. England alone, of the countries reported upon, does not at present act from this point of view, but it is clear that there is a strong trend of opinion in favour of its adoption in that country.
Messrs. Berryman and Mayhury (Great Britain) after citing the recent s Acts relating to road locomotives and motorcars, say:—" These Acts and the regulations made *in pursuance thereof gave legal sanction to the enormous additional user of the highway which has followed the introduction of mechanical transport, both for rapid passenger and light goods traffic, and also for the carriage of merchandise by heavy motorcars. Since their enactment. a new and totally different class of traffic has been brought upon the highway, which not only entails a correspondingly larger increase in expenditure, but from its nature and the resulting length of journeys performed, completely upsets all preconceived theories that highways were matters of solely local concern. Indeed, the urgent need for revision of the finances of road administration has already been clearly recognized by the Royal Commission on Local Taxation (1901), the Departmental Committee on Highway Administration (1903), and the Joint Select Committee on the Local Government Acts (Financial Adjustments) 1911." To these may be added the views of the Road Conference held in London in 1909, and of practically all local authorities and other public bodies concerned.
Everything therefore points to the fact that in every country public opinion is practically unanimous in favour of the institution of a system of national roads, the greater part of the cost of which should be paid out of the National Exchequer.
There appear to be two reasons why the National Exchequer should not hear the whole of this cost., but should obtain part of it from the local authorities.
Local Preferences.
One of these reasons does not apply to countries possessing a central Road Department which directly maintains all the national roads. In some countries, however, and especially in Great Britain, there is, for one reason or another, a strong feeling in favour of the actual work of road construction, maintenance and repair, in the case of all roads, being left to the local authorities. 'Where that -system is adopted, it is generally considered that it would tend to extravagance if the local authorities were not obliged to find some proportion of the funds required.
The other and more general reason is that these roads are not a purely national service (like the Army or 'Navy) but also serve local conveniences, and it is therefore not fair that the taxpayer in a district in which there are few national roads should pay at the same rate as if he were in a district where there are many. Some portion of the fund necessary for this purpose should therefore be charged on the local authorities in proportion either to the mileage of or the expenditure on the national roads in their area.
It most be admitted that this point of view does not seem to be generally recognized. In France, Italy, and most of the German states, no contributions are levied from the local authorities for the national roads. The importance of the point must depend on the extent of national roads in relation to others and on the amount of the burden they involve. In Hungary, it will have been observed, the amount of contributions to be paid by the local authorities towards the cost of the national roads is based in each case on a calculation involving a number of factors. This may very possibly result in complete justice being done, but it seems to be too complicated a system to be generally recommended. On the other hand, the rough and ready methods of Great Britain are based on no principle whatever and are altogether unsatisfactory.
State Aid of 75 Per Cent Suggested.
The simplest method which would be approximately fair all round, where the cost is to he shared by the State and the local authorities, would be for the State to bear a fixed proportion of the cost subject to their inspectors being satisfied that the road is being efficiently maintained, and in the case of national roads it is generally held that the State's share of the expense should be not less than 75 per cent. The question of the national roads which pass through towns stands on a somewhat different footing from that of reads in the open country. Mr. Reward (Great Britain) puts the matter thus:— " The difficulty of dealing with these areas lies in the fact that the greater portion of the traffic therein, even on the
main roads, is of a local nature. While the classification already referred to could doubtless be applied to the roads iii these areas it would seem to follow, if the greater part of the traffic in towns is of a local character, that the same proportion of the cost of the main roads therein should not be borne by the State as in the case of the counties. It is obvious, however, that the greater part of the through traffic which constitutes the `national' element in the traffic on country main roads passes at some point or other through one or more of the great towns. It, follows, therefore, that the main roads through such towns should be subsidized to an extent which bears some relation to the amount of such through traffic. If this principle be admitted, a solution of th3 problem might be found along the following lines. The grants already suggested for main trunk roads would work out at an average of £ x per mile, which would represent roughly the cost of maintenance attributable to " through " traffic along such roads. £ x per mile might, therefore, be taken as the cost of maintenance due to ' through ' traffic in London and the county boroughs, and grants might he given on that basis. "In such areas, however, main roads frequently take the combined traffic of several main roads in the surrounding areas, as these roads usually converge and often unite when approaching an urban area, so that the cost per mile attributable to ` through ' traffic in the latter would be higher than in rural areas. In order to counteract this inequality, the classification of roads in London and the county boroughs might be modified by amalgamating the first two classes and giving the higher grant in respect of all roads which are in any substantial degree main' roads. As an alternative, Class I (main trunk roads) in these areas might be sub-divided into two or three grades, the grant per mile being a multiple of £ x in the case of roads bearing more than the normal proportion of through traffic." As regards the qnestion of financial responsibility for the classes of roads other than national, this must largely depend upon the arrangements with respect to administrative responsibility, which, belong to another eection. It may be said here, however, that there seems to be a consensus of opinion in favour of a substantial grant from the central Government towards the cost of provincial roads, less of coarse than the proportion paid by the State in respect of national roads, but based on the same principles.
Practicable Proposals.
It is interesting to notice the detailed suggestions made by Messrs. Berryman and Maybury as to the proportion of cost of roads in England which in their opinion should be borne by the State:— These proposals do not include town streets, and Messrs. Berryman and Maybury appear to place the State contribution to Class I roads much lower than would generally be accepted as equitable. The other English contributors sugzest 75 per cent., which is the proportion usually named whenever the subject has been considered by any authoritative body in England. It does not seem to be, as a rule, the practice or to be thought desirable that roads of a lower grade than provincial nsads should receive a grant from the central Government. Where, however, minor authorities are primarily responsible for such roads, grants are usually given to them by the larger local authorities at their discretion, and this seems to be a satisfactory system. It is ta.ken for granted that the larger towns, at any rate, are solely responsible for all their streets, although they may receive grants from the Government for those which partake of the nature of national roads, as already mentioned. Mr. Jarratt (Great. Britain) considers that the towns should also receive a Government grant in respect of streets which might be said to fall within the same category as provincial roads and on the same basis, and the remarks by Mr. Haward with regard to main streets which are national roads should be again referred to in this connection.
The question of the propriety of charging either the taxpayers as a whole or the tax-payers (or "rate-payers ") in a particular locality with the cast of the roads is practically solved when it is decided to treat the roads as a national concern. With regard to roads not so treated, however, a question often arises as to the propriety of charging the inhabitants of one area with the cost of a portion of the cost of roads situated in another. This resolves itself mainly into a question as between town and country.
A U.S.A. View.
Mr. Clifford Richardson (U.S.A.) in following out his thesis that the burden of financing the construction of improved roads of the highest type should be placed where it properly belongs, says:— "The larger proportion of the motor traffic on our roads is undoubtedly that of motorcars which are owned by city or suburban residents and, in consequence, the cities should pay a large proportion of the taxes for constructing and maintaining country roads, unless it can be definitely fixed upon the owners of the motor vehicles themselves by a special tax."
One special aspect of this point is sometimes overlooked, namely, that the heavy traffic from the towns is often in direct competition with the small tradesmen in the country, the large stores sending goods daily by heavy motors to country customers and being enabled to do so only by reason of the good roads which are paid for largely by those small tradesmen whose business suffers so severely from this class of competition.
Who Should Bear the Tax ?
Mr. Jarratt (Great Britain) urges that "steps taken to ascertain with accuracy the origin of traffic on either side of given boundaries separating populous centres from county areas, would undoubtedly show how vast is the interchange of traffic across such boundaries, and how intricate and complex is the question of differentiating, say, between a county and a county borough, as to their proper liability in respect of roads which bear such through traffic. It seems, too, to be readily assumed sometimes that the traffic originating in rural districts, on the outskirts of a large town, into and returning from the town, represents a town user of rural roads. But surely such traffic has all the essentials of mutuality, and should not be a sole charge upon one of the parties." Mr. Jarratt's statement as to the difficulty of fixing the liability of different local authorities with regard to the highways on each side of a boundary ia, no doubt, true enough, but there can be little dispute that the volume of traffic originating in a large town and running into the country is much larger than that originating in the country and visiting the town. Where, therefore, there is no provision by general taxation or special taxation of vehicles which neutralizes this inequality, the town might fairly be called upon to contribute towards the cost of the roads in the adjoining areas.
Sources of Revenue.:
A large proportion of the funds required for roads, whether by the State or the local authorities, is met out of the product of their general system of taxation—that is to say, is obtained from precisely the same sources as the funds required for any other public service. Some part of these funds, however, is obtained by special taxation of persons or property. It is unnecessary here to touch upon the question of the resources of the State from general taxation. There are, however, some points in connection with the general taxation by local authorities which it does seem desirable to take into consideration.
In many European countries the main source of revenue to the local authorities consists of " additional centimes" added to the direct State taxes. Thus, in order to meet the expenses of its highways in any one year, a French commune will calculate the number of centimes which, levied on the persons in its area liable for the four direct State taxes on the same basis as those taxes themselves, will bring in the required amount, and these centimes are then, for the benefit of the commune, added to the tax collected for State purposes. It is obvious that the effect of this system is that the burden of central and local taxation rests on precisely the same persons and property in precisely the same degree. In England, on the other hand, the rates or local taxes may only be levied on fixed property, whereas the general taxation of the State has a far wider range, including in its field, through the income tax, all current revenue, whether real or personal. It is not intended to discuss here which of these two systems is preferable. The difference, however, should be noted. In the first case the sources of central and local general taxation are the same, in the second they are different, and consequently the proportions of the expenditure on the roads which should be borne by the central and local authorities respectively should probably not be the same under the two systems.
The question next arises, what, if any, classes of persons or property should be specially taxed for the roads. As to this, there is one principle which is generally laid down in the papers submitted—namely, that, to a large extent at any rate, those who use the roads should pay for them. Almost every writer points out the unfairness of casting upon the community as a whole the entire charge of a service which, while it certainly does benefit the whole community to a certain extent, contributes directly to the business interests or the pleasure of certain very definite classes. Signor Frosali (Italy) deals with the point in a concise paragraph. The cost of road maintenance, he says, "should be borne, at least in great measure, by those who use the roads and who derive economic advantages from them for their undertakings. If it is considered fair that rural property should, as at present, contribute towards the roads, as they act as feeders for the conveyance of agricultural produce to the consumer, it is only fair that urban property and generally speaking buildings, should pay its share of the expense; since these roads are means of access to the houses and add to their value. Similarly, industrial undertakings should contriblite towards these expenses, because the roads are used for the transport of the raw material, the workmen and the finished product. Again, commerce should also contribute its share, as it is a great road user."
Mr. Clifford Richardson (U.S.A.) puts forward some interesting and to my mind, convincing arguments on the sub ject of long-distance traffic. " A large proportion," he says, "of the improved highways which have recently been built in the United States may be looked upon as luxuries, since more than half of the travel which uses them consists of pleasure vehicles and motors and but a small proportion is made up of productive travel. It would seem, therefore, that the costs of these expensive roads should be met, at least in some part, by revenues derived from the taxation of motor travel, and that a large portion of their maintenance should be paid for from the same source."
M. Bordas (France) says, that, "among the inhabitants of a country some derive special advantages from good roads, such as those who use horses, carriages, vehicles with mechanical traction, and other means of rapid conveyance for their professions or for pleasure. In these circumstances it would be only fair for such parties to pay an additional tax in the form of a special duty." M. Bordas is here referring to national roads, but points out that the same principle is applied to roads of other classes by the Act of 1880, since under that Act all those who are considered to derive the most benefit from the roads are called upon to contribute to the cost. Hence the system of contribution in labour and industrial subsidies.
The Lancs. County Council View.
As regards the question of heavy traffic in particular, the position is thus stated by Mr. Harcourt Clare (Great Britain) :— 1. Are the few traders to be allowed to make a saving in railway charges at an expense to the general body of ratepayers many times in excess of the saving effected 2. Is it fair to the great majority of traders who use vehicles not carrying excessive weights, to have the roads cut up and themselves made to contribute to the damage caused by the excessive weights?
3. Is it to be recognized that it is the duty of road authorities from time to time to incur whatever expenditure may be necessary to so maintain or reconstruct the roads under their control as to make them suitable for any vehicle which under the existing law can WM a highway?
Mr. Clare mentions that this point is recognized in English law in relation to "extraordinary traffic," but the method which is adopted in almost every other country of special taxation of industrial undertakings which use the roads to a greater extent than the general community, seems much more effective and satisfactory than a remedy which almost always involves a lawsuit. It is curious that whereas in every country there appears to be some taxation of motorcars and, as a rule, of horse-vehicles also, steam rollers and traction engines, so far as can . be gathered from the information received, escape very easily, although they do the most damage of all. This is certainly the case in England.
(To be concluded.)