Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-12-20
Would Be Unfair to Citizens
and Hard to Work Out,
Hearing Is Told.
DECLARES u. S. HOLDINGS
MUST BE CONSIDERED
Auditor Insists Enormous Tax Ex-
emptions Cause Federal Govern
ment's Burden to Rise.

A plan for Determining the caancial
liability of the United Sta1gs to the
District on the basis of Service provided
by the municipality to the FEDERAL Gov
eminent was vigorously opp1sed today
by Maj Daniel j. Donovan, District
auditor and budget officer, when he
resumed his testimony before the Spe.
cial Committee on Fiscal Relations Of
the House.
Maj. Donovan declared that any at.
tempt to allocate the expenses to the
District of services provided for the
Federal Government would lead to UNI
ending controversies. He insisted that
the only equitable plan for reaching q
solution of the fiscal relations problem
would have to take into consideration
the proposal laid down by the Bureau
Of Efficiency to consider as a major
element the vast tax-exempt property
holdings of the United States In the
Nations Capital.
Injustice Seen in System.
The proposal for dividing the expenses
on the basis of service was developed
through series of questions propounded
by Representative Frear of Wisconsin,
Maj. Donovan declared repeatedly that
it not only would be difficult to arrive
at fair division, but that such a plan,
excluding as it did the Federal property
holdings would work an injustice on
the District I'VE are dependent" he
said. "on the justice and equity Of Con-
gress for equitable fiscal treatment"
In developing the theory for deter.
mining the fiscal liability of the United
States on the basis of service, Mr.. Frear
first questioned Maj. Donovan regard
ing the proportion of the $4,000, 900 an.
nual expense of maintaining the Police
and Fire Departments that should be
borne by the United States.
Il don't think you can determine the
answer" replied Maj. Donovan. "T
don't know what yardstick can be used
in arriving at that amount
Would you say Is per cent?" asked
Mr.. Frear.
81 couldn't say" answered Mai. Dom
ovan. 1.-THE burden il to expect the
people of Washington to maintain the
National Capital without any assistance
from the United States"
Taxation Basis Discussed.
what is a fair basis of taxation for
the DISTRICT" asked Mr. Frear. eff the
people of the District do not pay a fair
share, do you expect the Federal Gov
eminent to pay more than its fair
Share?"
st don't claim that the people Of
washington are not paying fair share,
nor do I claim that the Federal Gov
eminent is not paying its fair share"
said Maj. Donovan. IF you were to
go into any comparable city and take
millions of dollars of property OF Of
the tax rolls you would soon have a
squeal for help from the taxpayers.
Il believe any attempt to allocate the
expenses of the District on the basis of
would always lead to a controversy.
don't believe you can establish an ac-
curate basis for determining the amount.
1t would simply be matter of opinion
and you would have many opinions"
Mr.. Frear again asked Maj. Donovan
what proportion of the annual six-mil-
lion-dollar expense of the Police and
Fire departments should be charged
against the Federal Government for
police and fire protection.
las said before" replied Maj. Dono-
van, Il cannot answer that question"
Other Burdens Enumerated.
Mr.. Frear then asked Maj. Donovan
what other burden the Federal Gov.
eminent places on the District besides
that of police and fire protection. He
enumerated a number of other ACTIVE
ties, which included the cost of paw
ing the streets and sidewalks, the con.
struction of sewers, street lighting, edu-
cation, public health, public welfare ana
judicial service.
Mr.. Frear emphasized, however. that
the cost of these activities is shared in
by the United States to the extent that
the amount of its annual contribution
is used.
Maj. Donovan again insisted that the
burden of the Federal Government on
the District rises as a result Of the
enormous tax exemptions. 1--WE all
know" he declared, that the City Of
Washington is the Nations capital. We
know that 1t has been the consensus
of Congress for years that the people
of Washington could not be expected
CONTINUED on Page 2, Column A.