Gas Tax to Pay for Roads
From the time the Highway Department was created in 1905, property tax levies produced much of the revenue for state highway construction and maintenance. However, reliance on property taxes made it difficult to keep pace with the rising demand for roads as automobile use increased. In 1921 the state began taxing the gasoline those automobiles used.
The increase in the gasoline tax to two cents per gallon, which took effect on January 1, 1924, combined with automobile license fees, raised $12 million for the Motor Vehicle Fund in the 1923-1924 budget biennium. This allowed the Legislature to repeal the one mill levy on property for the public highway fund, although other highway levies remained in force
State to Fix Roads
The Legislature also changed how motor vehicle funds were allocated. Before 1923, motor vehicle fees in the highway maintenance fund were credited to counties and spent by the county commissioners under state supervision. Beginning with the 1923 legislation, all primary highway maintenance appropriations were spent directly by the state Highway Department, giving the Department full control over maintenance.
The 1923 Legislature also ended the two-year experiment in which the Highway Department was a division of the Department of Public Works. The Division of Highways in the Public Works Department was abolished and control over highways was placed in the hands of a State Highway Engineer appointed by the governor. To fill the new post, Governor Louis F. Hart named James Allen, who had been Highway Commissioner for years before heading the Division of Highways under Public Works Director E. V. Kuykendall.