Justice Department follows growing trail of illicit highway contracts; many states consider higher gas taxes as roads seriously deteriorate; Inflated repair costs, fuel conservation force search for more revenue

Either higher gasoline taxes or increasingly bumpy highways are not too far down the pike for millions of American motorists. With most state highway funds from Maine to Hawaii shrunken by inflation and gasoline conservation, state lawmakers are being forced to either lay down more road-building money or face sharp cutbacks in construction and repair programs.

In North Carolina, one of the states where the pinch is particularly great, less than half as much resurfacing is scheduled this year as was two years ago. "We're falling farther and farther behind in even minimal maintenance," laments David Hayes, the state's assistant transportation secretary.

Fast-climbing road construction costs are coming at a time when less driving and more fuel-efficient cars are teaming to lower gasoline tax revenues, the major source of income for state highway funds.

Although total motor fuels revenues nationally have continued to increase, thanks in part to rate boosts in some states, these levies have grown at a much slower rate than state taxes as a whole. Between 1978 and 1979, the motor fuels portion of total state tax revenues dropped from 8.5 percent to 7.9 percent, a 14.2 percent decline.

Especially hard hit are populous states with huge networks of heavily traveled roadways such as Illinois, Michigan, New Jersey, Ohio, and Pennsylvania , notes Francis Francois, executive director of the American Association of State Transportation Officials.

"Many states have cut back, are cutting back, or soon will be facing cutbacks in road construction projects and personnel," he reports, noting that in a least two states -- New Jersey and Pennsylvania -- state legislatures last fall failed to come to grips with highway funding crises.

Within the past three years, 21 states have increased their gasoline taxes, four of them twice. In 1980, for example, 11 such highway-fund aid measures were enacted.

Similar, if not greater, activity is expected during the next few months.

Proposals to hike gasoline levies are either being readied or under consideration in at least 41 states and the District of Columbia. Several already have the backing of governors.

In 20 of these states and the District of Columbia lawmakers will be weighing not only measures to raise the gasoline tax on a cents-per-gallon basis but alternative legislation that would switch to a levy based on a percentage of either the wholesale or retail price.

Variable-levy plans are on legislative dockets alone in 14 other states.

The remaining seven states with gas tax boost measures under consideration are weighing only traditional cents-per-gallon proposals.

Among the 39 states where highway fund relief legislation is, or soon will be , on the agenda are eight of 12 states that have not hiked gas taxes for at least a decade. They are Alaska, California, Colorado, Illinois, Nevada, North Carolina, Oregon, and Tennessee.

Although most states still tax motor fuels on the cents-per-gallon basis, six states -- Indiana, Kentucky, Massachusetts, Nebraska, New Mexico, and Washington -- already have switched wholly or in part to a variable tax pegged to a percentage of either wholesale or retail prices.

This system, its advocates say, helps cushion state highway funds against inflation and softens the impact of less gasoline consumption. It also spares lawmakers from having to pass further cents-per-gallon gas tax boosts to meet future needs.

Critics, however, contend the arrangement is a means to quietly slide the levy upward, even though in most proposals a ceiling is provided.

The largest of the proposed tax boosts is in North Carolina, where Gov. James B. Hunt Jr. is weighing a five- cents-per-gallon hike, the state's first since 1969. It would bring the tax rate to 14 cents a gallon. An alternative proposal would add a 4 percent bite to the existing nine-cents-per-gallon fee.

In Vermont, Gov. Richard A. Snelling wants state lawmakers to approve a measure that would replace the current nine-cents-a-gallon rate with a rate of 9 percent of the retail price. The new levy would bring in an estimated $8.8 million in new revenue. The yield at today's gasoline prices would be equivalent to an 11 cents a gallon tax.

"We really have no choice but to go for this because our highways are deteriorating at an alarming rate," explains gubernatorial aide Michael St. Clair.

Some legislators who are resisting a boost in the gasoline tax favor sharp increases in registration fees for heavy trucks. They contend that these vehicles are more responsible for wearing out roadways than are cars and other small vehicles. Several states already have hiked license and registration fees to help ease the highway fund shortfall.

Current gasoline levies range from five-cents-a-gallon in oil-rich Texas to 13.6-cents-a-gallon in Nebraska, along with a 2 percent sales tax add-on imposed last Oct. 1.