Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-06
BUDGETS CONTROL
/. OF DISTRICT MONEY
CITED BY DONOVAN
Auditor in 1922 Called Sys-
tenn First Adopted Illogical
and Contrary to Law.
RESENTED TREATING CITY
AS FEDERAL DEPARTMENT
Gen, Lord. However, Said Differ
ences Due to Point of View
Rather Than Principles.
BY J. A. O'LEARY.


trict Building First, the periOd prior to
1909. in which the Commissioners de-
c:ded upon the total and makeup OF
the local estimates; second, the interval
from 1910 to 1928, during which tlme
Congress imposed the restriction that
The estimates must not exceed twice the
city's estimated revenue, and, third, the
present arrangement. which began with
the creation of the Federal Budget Bu-
reau. .
In the old days the completed esti-
mates went from the District Building
20 the committees of Congress by way OF
the Treasury Department, but this de-
tour was merely one Of routine pro-
cedure. The local budget was incorpo-
rated in the large book of governmental
estimates. but without the revision
which now takes place under the BuogeI
Bureau system.
'The restriction enacted by Congress in
1909 limited the total amount the Com
rnissioners could ask for but 1t still lelt
the heads of the municipal government
as the arbiters of how this total should
re allocated to various n'unlclpal 1unc-
lions. subject of course, 20 the changes
which always are made i:y the Congress
sional Committees in the process Of en-
Rcument.
Repealed Limit on Total.
For a number of years prior to 1922
the Commissioners urged Congress TO re-
peal the limitation on the total OF DIS
trict estimates. so that they could pre-
sent to the legislators complete picture
of the citys needs. In enactlng the ap-
propriation act for the fiscal year 1917
1923 Congress removed the restriction.
.,ut the District had already been made
a.nenable to the Federal Budget Bureau
~, +l,e budpet and accounting act OF
June. 1921.
'rhe same year that Congress repealed
.he Limitation on District estimates the
Budget Bureau, then II the second year
of its existence fixed tentative limit
on what the Commissioners could ask
for that was even lower than they would
have been able to submit under the Iimi-
tation formerly imposed nv Congress.
In August 1922. Auditor Daniel j.
Donovan. as District budget officer, sent
a letter to Gen. H. M Lord, then direc-
tor of the budget, taking the view that
the present practice Il treating the
District as a Federal department is abb
solutely wrong" The auditors letter,
written one year after the budget law
had been enacted, outlined the problem
as follows:
The District of Columbia is, as you
know, a municipal corporation, and so
established by an act of Congress. 1t is
not 2 department of The Federal Gov
eminent nor an independent establish
n1enf of the Government. This latter
statement is in consonance with decl-
sions of the courts, including the Su-
prame Court of the United States. the
Attorney General and the Comptroller
of the Treasury.
Practice Called Illogical.
at is true that Congress appropriates
for the needs of the District, and that
all receipts of the District must be de-
posted in the United States Treasury
and may only be paid out pursuant to
appropriations made by Congress 1t Is
also true that the budget plan in terms
requires appropriation estimates OF the
District TO be submitted to the Budget
Bureau But in none of these require
ments is the status of the District as
municipal corporation disturbed or de-
stroyed.
IF may be permitted the expression,
believe the present practice in consid-
ering District receipts and appropriation
estimates is Illogical and contrary TO the
plan language of law. To illustrate this
thought l wish to refer briefly to the
treatment of the receipts and estimates
OF the District for the fiscal year 1924.
II will take up the matter Of receipts
first. Some time prior to your advice
70 the Commissioners that they must
limit their estimates to S24.532,5l5 your
bureau has called upon me to indicate
The estimated receipts Of the District for
1924. The figure I furnished was SlS,-
500. 900, representing collections from all
local sources. including revenut proper,
water fund receipts and trust and spe-
cisl fund receipts The total Of $l8,-
100000 was predicated upon an approx
mate budget maximum for the District
OF $50. 900 600
When the amount was ~aduced to
slightly more than S24 500 900, it meant
tina. the estimated receipts Of the Dis
iric previously reported to you were cor
respondingly wrong; and. moreover, the
fictitious difference apparently was used
IN allocating totals TO Federal depart
ments. In this connection you probably
know that the amount Of money to be
raised by the District in any one year
depends entirely upon the total appro-
priationS for that year. as the tax rate Is
rot fixed until the appropriation bill has
passed into law.
"On page % OF your printed address
of July II. 1922 before the Business Or
ganization of the Government. you show
the estimated receipts of the Federal
Government for the fiscal year 1924
Included in the total is this item: Dis
trict of Columbia, sl850o 900 In othel
words. all moneys collected by the Dis
trict from whatever source and fol
whatever purpose are treated as part o.
The receipts of the National Government
This, I submit. is not only illogical, bu
ct variance with law.
Explains Source OF Funds.
THE receipts OF the District Of Co
i',mbia may be divided dnder thre'
heads. namely, % revenue derived from
taxation and privileges and miscellane
Gus sources; CD revenues derived from
the Use of water and 90 moneys re
reiyed on account of trust and Specia
funds. Moneys of the first class ar
available for appropriations for genera
municipal purposes and 1t is only 70
appropriations payable from sucl
moneys that the United States contrib
utes 40 per centum. No part of tn
moneys received from the use of waite
Is paid by the Federal Government o
the District government, the entir
amount being paid by private consum
e.s. The third class OF receipts, for tn
trust and special funds. is made up, a
the term implies. of purely trust moneys
TO part of which Is paid by the Unite'
states. Under this last class we hav
temporary guarantee deposits made u
connection with proposals for publ
works. deposits In connection with pri
yate building operations, moneys de
quoted from salaries of school teacher
for the teachers retirement FUND
troytin,,ad On TaOI,rth pace