Plenary Session Transcripts

Governors Attending:

Guests:

Points of Interest:

Considerable time was devoted to a discussion of taxes. It was noted that of federal taxes collected in 1950, more than 70 percent came from sources that overlapped state taxes. Of total state taxes collected in one year, more than 49 percent came from sources that overlapped federal taxes. State aid to local governments climbed 135 percent from 1942 to 1950. In 1950, that aid amounted to 37 percent of state revenue, which included federal grants except unemployment compensation. This in turn put pressure on the states to seek federal aid, which more than doubled between 1942 and 1950.

Governors talked about the loss of local revenue due to federal acquisition of property that consequently became nontaxable, about legislation pending in Congress to pay local governments in lieu of taxes, and about the federal government giving certain tax authority back to the states and the responsibility states would then bear for administration of services.

Governor Elbert Carvel of Delaware spoke of his state's decision not to permit income taxes paid to the federal government to be deducted from state income taxes, which increased state revenue.

Governors also discussed the fact that the federal government took in more in gasoline taxes than it returned to the states for highways. A representative of the Canadian government stated that trade between the U.S. and Canada was greater than between any other two nations. He went on to express concern that emphasis was now on military needs in place of liberal and expanded international trade, and that nations such as his were threatened with economic harm by the request of the U.S. for its allies to forego trade with its adversaries.

Governors discussed whether higher education was a privilege or a right and whether federal aid was warranted.

John Ivey, Director of Southern Regional Education, said that in 1948 the Southern Governors' Conference sponsored the creation of an interstate compact for improving graduate, professional, and technical education through interstate collaboration. The aims of the compact were to help develop resources in the region, promote the development of complementary strengths instead of competition between states, and determine how institutions of higher learning could cooperatively use research laboratories and scientific personnel employed by both government and industry.

Between 1940 and 1952, the number of registered vehicles rose 40 percent, reported Governor Arthur Langlie of Washington, who referred to traffic problems as ‘hardening of the arteries.' Yet state gas tax rates had increased only 27 percent in 10 years compared with a 125 percent increase in the cost of highway construction.

Governors went on to discuss bond financing of highway construction, federal gas taxes, the possibilities for toll roads, educating the public about traffic safety (which included talk of reckless driving and speeding among teenagers in particular), and evaluating existing state programs.

Governor John Bonner of Montana noted that this was the first time Indian affairs had been discussed at a Governors' conference. He said that several years earlier, he and former Governor Youngdahl of Minnesota had organized the Governors' Interstate Indian Conference, which consisted of representatives from 16 Indian states. Governors talked about the problems of Indian health, welfare, and education. It was noted that because Indian property was held in trust by the federal government, it was not subject to mortgaging, as a result of which Indians could not take full advantage of veterans' housing opportunities. In conclusion, concern was made clear that the federal government was trying to foist Indian problems on the states.

Memorable Quotes:

Governor Val Peterson of Nebraska said: "There can be no quarrel with increased power in the central government to the extent that the nature of modern life...requires that it be strong. We must also admit that some progress must be ascribed to the grants-in-aid program. However...states lost much of their sovereignty...when they took the first dollar of federal aid...All wealth, in the final analysis, is produced in the states. But, in the process of the federal government collecting taxes...funneling those taxes from the point collected into Washington, processing them through the governmental units there and back out into the field, there is an inevitable shrinkage of from 10 to 30 percent."

Governor Walter Kohler of Wisconsin said: "Wisconsin has been the laboratory for much of the social welfare legislation which today is part of the federal aid structure...Not long ago...we pioneered a program of state aid for the permanently and totally disabled. We didn't ask the federal government for any help...we didn't want any help. Yet, subsequently, the federal government began granting aid in this field...We would greatly have preferred a reduction of federal taxes levied upon Wisconsin's citizens in an equivalent amount. We couldn't have the tax reduction, so we took the aid. What we resented, however, was the fact that in order to qualify for that aid...we were compelled to rewrite our law, even though our experience with this type of aid was greater than that of the federal government..."

Governor Charles H. Russell of Nevada said: "...I do feel that it is the right of every young man or woman who wishes...higher education to have it made possible for him or her, either in his own state or through an agreed arrangement between states where centralized facilities could be had...there is a dearth at the present time of many professional people throughout the United States...The atom bomb is probably the greatest force this nation has ever known, but when we think in terms of it, and think of the fact that it was created by the human mind, a human mind well trained, there is no limit as to what can be done in the future."

Selected Resolutions Adopted:
(1) Urging ratification of uniform civil defense compacts among states; (2) requesting the Council of State Governments (CSG) to study bond financing; (3) urging Congress to act on legislation to establish a commission on intergovernmental relations; (4) urging the Federal Security Agency and other federal agencies to make information available for use by state welfare officials on the whereabouts of persons who deserted or abandoned spouses, children, or parents; (5) urging Congress to act on statehood for Alaska and Hawaii; (6) requesting CSG to study the dual death rate structure of the federal estate tax and to present recommendations to the association's Executive Committee; (7) urging Congress to act favorably on legislation to pay local governments in lieu of taxes on federally owned real and personal property; and (8) urging the federal government to withdraw from the field of gas taxes as soon as was consistent with national defense needs.