Evening star., 1922-05-08
Rate by MaiI-Payable in Advance.
Marylapd and Virginia,
New Surplus Law Unnecessary.

OF the elaborate, threatening, LdA-iii-
creasing, surplus-building machinery
created under the proposed new nscal
system, to put the District In 1873 on
a cash basis, demonstrates that the
legislation setting up this machinery
is wholly unnecessary.
This legislation assumes that the
existing District five-million surplus is
a myth, and that Washington now has
no surplus whatever, and that the Dis
trict taxes are to continue to be paid
as at present, near the end of the f1s-
cal year.
But the explanation by the leaders in
the Senate, which robs this legislative
threat of some of its terrors, carries
the promise that the amount OF the
existing surplus shall be determined
by January, 1928, and that District tax
payments shall begin early in the nscal
year. Fulfillment of these promises will
obyiate the necessity of advances from
the Treasury for District expendi'
lures, will accomplish the end sought
by Congress, and will render supar-
f1uous the surplus-building tax exac-
tions. The expressed determination OF
Congress is that at the beginning OF
the fiscal year 1928 the District shall
be upon a cash basis, that 1t shall pay
as it goes its share Of the cost OF Dis
trict maintenance in that year and
shall not rely even for a few months
upon advances from the Treasury.
Let us assume that the law concern
ing the payment of District taxes is
changed, and half Of the tax is paid
October l and the other half April !.
That change alone would put the
District on an equitable basis in meet
ing the expenditures Of 1928, If 1t
should be conceded that the govern
ment-a joint contributor to the ex-
tent Of 40 per cent Of the total ex-
penditure-would reasonably spend all
of its own contribution before 1t
viewed itself as making advances to
its co-contributor.
Let US assume, however, that pay
as-you-go means that the District
should have on hand the money to
nay three-fifths Of every District ex-
penditure after July I. 1928. AS
suming that the expenditures were
spread evenly over the whole year. the
District would need to have on hand
July /. 1928, three-f1fths Of the 25 per
cent of annual expenditures needed
for the first quarter. or Is per cent
Of that total expenditure.
On October 1 the District would pay
30 per cent, or its three-flfths Of so
per cent to be spent in the second and
third quarters; and April / 1t would
nay 80 per cent, being its IS per cent
for the last quarter and is per cent
surplus to apply on the first quarter
OF 1923.
The surplus-forrning legislation as
sumes that the District must have in
advance on July l, 1928. in order
to pay as it goes, its contribution for
ten months Of the year. If the tax
paying date or dates are moved for
ward in the year, as suggested, ad-
vance provision must be made only for
three months Of the year. No new sur
plus contribution should therefore oe
exacted for the first year or two Qs23
and 1929 of the five years preced-
ing 1928. When the amount Of our
existing surplus is fixed the problem
will doubtless be disposed of by the
discovery that the District has in hand
hn
to finance its share of expenditures for
the first quarter Of 1928.
This provision Of the new fiscal law
should be so modified that its sole re-
auirement Is that the District shall
have on hand January /, 1928, a sur
plus sufficient to pay three-1fths of
the Districts expenditures during the
first quarter of the year. and the tax
paying dates should meanwhile be al
tered so that the first tax!payine day
is at least as early in the fiscal year
as October I.
In the almost inconceivable event
that the existing five-million surplus
should be repudiated as national obli-
B6t4OAs kIAS SoaliEoA oSASoAy oAiioAA oAA-
plus required in 1928 would probably
be made up by the inevitable small
surpluses during the next five years in
tax revenue over the exact amount Of
60 per cent Of District appropriations
In each year.
And, Of course, II the first tax pay
ment were made July 1, 1928. there
would be no necessity for any surplus
whatever. The wisest plan will be the
one that will require 1928 taxpayers
to take care to the largest extent Of
the expenses Of 1928. and rely to a
minimum degree upon 1927-654-3.
Since the fairest and best plan Of
causing the District to pay as it goes
in 1928 is to change its tax-paying
dates, why not make that change in
the pending District bill and omit the
provisions which unnecessarily menace
the taxpayers Of 1s27-6-54-3 with tax
exactions, estimated from one and one
quarter millions to approximately
three millions in each year, to be
spent for the current expenses of
1928?
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