Press Release

Governors Ask Congress to Spend Gas Tax Revenue on Transportation

02/05/97

Governors Call on Congress to Spend All Federal Gas Tax
Revenues on Transportation

WASHINGTON - U.S. Newswire: The National Governors' Association (NGA)
Committee on Economic Development and Commerce has called on the
federal government to spend all the funds collected from the federal
gas tax on the nation's transportation system.

Although the total amount of taxes collected and deposited in the
Highway Trust Fund has grown steadily during the past four decades,
the spending from the trust fund has not kept pace with the growth in
revenues.  States have been forced to assume a large share of the
financing burden for the transportation infrastructure system. This
policy will be considered under suspension of the rules by all of the
governors during the closing plenary session on Tuesday, Feb. 4.

On the second day of NGA's 1997 Winter Meeting, the committee
governors concurred with representatives of Ford Motor Co. and
Federated Logistics that it is crucial to invest greater resources in
the national highway system. "Waste Rn transportation is not just
about increased inconvenience. It costs businesses time, money and,
ultimately, productivity," said Kentucky Gov. Paul E. Patton, chair of
the committee. Stormy Hicks of Ford Motor Co. stressed that for every
day Ford cuts the time from order to delivery the company saves $550
million.

-- International Trade.

The governors also discussed the growing economic importance of
international trade and called on Congress to immediately renew
fast-track trade negotiation authority for the president. Ira
S. Shapiro, senior counsel and negotiator for the Office of the U.S.
Trade Representatives, acknowledged the historic, bipartisan
leadership shown by the nations' governors in attracting foreign
investment while insisting other nations open their own markets. He
also sent a clear message that the administration intends to seek
fast-track trade negotiation authority for the president in the 105th
Congress. "If the United States cannot negotiate comprehensive trade
agreements in Latin America and Asia, we will remain on the sidelines
while other nations take advantage of these opportunities to our
detriment," Shapiro noted. North Dakota Gov. Edward T.  Schafer, vice
chair of the committee, expressed to Shapiro his concern about the
impact of Canadian livestock and grain imports on domestic
prices. Shapiro responded that there are still issues to be resolved
in U.S. trade relations.

-- Telecommunications Taxation.

The committee also heard from Gary Cornia, of Utah Gov. Michael
O. Leavitt's Tax Review Commission, on an upcoming study of
telecommunications taxes to be conducted by state tax commissioners,
industry and academics under the direction of the National Tax
Administration. The telecommunications industry is undergoing rapid
changes as deregulation takes hold and technologies such as the
Internet change the way people do business. The upcoming study will
attempt to make recommendations to the states that will help avoid the
creation of 50 different sets of Tax laws. Maryland Gov. Parris
N. Glendening urged that the study group move as rapidly as possible
in developing guidelines on this important taxation issue.

-- Policy Positions.

In addition to the surface transportation policy, the committee also
passed the following policies and resolutions. These proposed policies
will now be considered by the association at the closing plenary
session on Feb. 4.

-- Economically Distressed Areas.

Asks for changes in section 30A wage credits to assist severely
economically distressed areas.

-- Tax-Exempt Financing.

Calls for an increase in volume caps for "private activity"
tax-exempt bonds and greater flexibility for their use.

-- Tax Reciprocity.

Calls for the redirection of federal individual income tax refunds to
states when federal taxpayers owe back taxes to states.

-- Affordable Housing.

Supports the permanency of the low-income housing tax credit and
mortgage revenue bonds. Seeks an effective state role in Section 8
restructuring and opposes an increase in the 30 percent rental cap.

-- Economic Development.

Calls for the removal of barriers to growth for the private sector, a
permanent research and development tax credit, and the continuation of
the Community Development Block Grant program, empowerment zones and
the manufacturing extension partnership.

-- Indian Gaming.

Recommends that amendments to the Indian Gaming Regulatory Act of 1988
should clarify which gambling activities and devices are subject to
compact negotiation; states that a governor should not be forced to
negotiate with a tribe for gambling activities that are not otherwise
permitted by state law; and states that the secretary of the
U.S. Department of the Interior does not have unilateral authority to
permit tribal operation of Class III gaming.

-- International Trade.

Supports fast-track trade negotiation authority for the president,
U.S.  participation in ongoing regional trade summits, and expansion
of existing trade agreements.

-- Military Base Disposal.

Calls for the federal government to continue to improve property
disposal procedures, ensure states and territories a meaningful role
in the base closure process, allow flexibility in the timing of base
closures, and provide incentives for timely commercial reuse.

-- Air Bag Safety.

Supports a campaign to inform the public about maximizing the
lifesaving capabilities of air bags while minimizing the risks of
these devices.

-- Telecommunications Taxation.

Supports the review of state tax practices with respect to
telecommunications.

-- United States Innovation Partnership.

Supports the signing of a memorandum of understanding with the
administration to implement the United States Innovation Partnership
to increase the economic benefits of science and technology.

The committee governors also reaffirmed existing NGA policy on the
uniform product liability code.