Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-12-11
D. C. SURPLUS OF 1925 NOW SPENT,
BUT ANOTHER HAS ACCUMULATED

tide it over the time before it's own
tax raised revenue became available,
and these advances had been made
without interest. Realization OF this
fact was q considerable shock to
some of the members of Congress,
although the fault lay plainly with
Congress. Previous to May. l9UO' the
law required semi-annual payment or
taxes in the District, IN May and
November But in 1900 Congress
changed the law so that taxes could
be paid either in November or in
Nav. The human trait to put of
until Nav what should be done in
November resulted in delaying the
raising of District revenue until the
latter part of the fiscal year in which
il was to be spent Every year Uncle
Sam had to carry the District along
until it could raise the money 10 pay
him back.
To nut the District on the CASH
paying basis this year, so that when
there was money to be spent the
money would he there for spending,
Congress authorized the Commission
ers to accumulate, from year TO year,
a cash balance. And subsequently
Congress provided that the lump sum
of 5000 ,000 representing the Fed
eral contribution in the last four MS
cal wears, be made available at the
beginning of each fiscal year instead
of at the rate of $75O,OOO a mohln.
Tax payments were also changed
to September and March from No
vember and May. with penalties for
failure to pay in September, so that
District revenues become available
toward the beginning of the nsCal
year and are paid in several months
before the close of the fiscaI year,
with several months left over for de-
linquent receipts. Added to the casn
fund accumulated by the District
Commissioners, this enables the Dis
trict to start each fiscal year with
a cash fund amounting to around
$4,000. 900 or more. with half its taxes
becoming due and payable within the
first six months of the fiscal year.
+ X
In 1922 the Commissioners decided
that a desirable cash balance to ac-
cumulate in the five years remaining
before the pay-as-you-go system
went into effect would be S3,000,O00
and that this fund would be accumu-
lated at the rate of 100000 a year.
The tax rate was fixed accordingly.
But when the end of the fiscal year
1926 was reached it was found that
this cash balance was only S1,91S,119,
instead of being the $2,400,000 count
ed upon. This made it necessary to
raise 81 ,026.S31 instead of the $780,
900 that would have been necessary
during the fiscal year 1927 to bring
the cash balance to $3,0O0.OOO. Dur
ing the years between 1922 and 1877
appropriations had reduced the cash
balance, or surplus, but in the last
fiscal wear revenue credits exceeded
appropriations by Sl,7S7,6 99, so that
at the beginning OF the current fiscal
wear the cash fu~d amounted to
S3.760,S5S, more 4" 100000 In ex-
cess of the aur1!';s deemed safe and
There ~ r-m, interesting points
in conSidcr -;un of this surplus. In
the first place. it cannot be regarded
as separate fund, deposited and
drawing interest, to be withdrawn In
an emergency to carry the DISTRICT
Owe an interval between tax pay
ments. 1t is simply a balance remain
ing at the close of each fiscal year
in the general fund of the Treasury
to the credit of the District. The
amount, S3,000,0 900, was figured as
safe margin for budget of $50 ,000 900.
Already the budget has exceeded
$40, 900 900. There already exist ex-
amples in which this cash balance has
been diminished by appropriations.
1t is a bad policy to cross bridges not
even in sight, but after departing from
the fixed ratio system it is not stretch
ing the Imagination to picture the day
when Congress, having contributed its
SO ,000. 900, might seize upon this I'M
expended balance as an excellent
means of giving the District, say, an
airport. The tax rate for the ensuing
fiscal year would, of course. have to be
figured accordingly, and $4,000, 900. in
addition to regular needs, be raised
to rebuild the surplus.