Evening star., 1934-05-18
"Earmarking" Local Taxes.

"Earmarking" Local Taxes.
The Federal contribution to the
District under the lump sum becomes
part of local revenues as soon as 1t
is made. Federal" dollars and local
dollars are not earmarked or treated
separately The United States con-
tribution, in partial recognition of the
national obligation and responsibility
in National Capital maintenance and
development, is as much a part of local
revenues as the contribution in taxes
paid by the owners of local property
The proposition to "earmark' part
Of local taxes for refunding any loan
granted by the Public Works Admins
tration for National Capital develop
ment overlooks the obligation of the
National Government in contributing
to such development through its an
nual contribution to the District bill.
Furthermore, it is entirely unnecessary
to "earmark" any funds for repay
ment of the P. w A. loan. Legislation
authorizing this proposed loan sets
forth the terms under which the loan
Is to be repaid, and to that extent
local revenues are "earmarked" or set
aside for refunding the loan automat-
ically. There is not the slightest chance
that there could be any failure on
the part of the District to repay the
loan, once it was granted, unless the
exclusively legislating Congress chooses
to repudiate the loan and default.
The money to repay this proposed
loan will. of course. come from local
revenues The national contribution
is q part of such local revenues. To
"earmark'' a portion of local tax reve-
nues for repayment of the debt means
reputation, in effect, Of the obligation
of the United States to participate in
any way in that part of Capital de-
velopment represented in expenditure
of the loan. If the Municipal Center
Is to be included in the expenditures
authorized in the loan, and the loan
is to be repaid out of "earmarked"
local tax money, it would mean that
after embarking the District on this
expensive undertaking with the i'm
piled understanding that the United
States would, in view of the peculiar
conditions, contribute with special
and equitable liberality to its fnanc-
ing, the United States would by stat
ute deny itself any participation, direct
or indirect, in municipal center de-
velopment The same thing applies to
the proposed sewage disposal plant.
which would be largely utilized by the
National Government Gas the water
system is utilized, but the cost of
which would be thrown on the local
community, and it applies equally to
other projects to be financed from
the loan.
1t is true that thirty per cent of the
loan would be direct grant from the
National Government. But no favor
itism is thus shown to the District, as
the United States is furnishing thirty
per cent of similar loans to the States
and counties and to other cities. But
here in the National Capital, laid out
and developed by the National Gov
ernment on scale far beyond limited
resources of the local community to
finance unaided, local revenues are
augmented by a Federal contribution,
representative in part of the National
Governments obligations to mainte-
nance and development of its own
Capital.
1t is recognized that the refunding
of a P. w. A. loan might bring with
1t some increase in local taxation.
But to the extent that local taxation
is increased, the national contribution
should increase. BY earmarking a
portion of local tax revenues for re-
payment Of the loan, the result would
be to increase the burden Of local tax
alton without any compensating in
crease in the Federal lump sum. which
has already shrunk far below what
square dealing with the politically i'm
potent, unrepresented District Of Co.
lumbia demands.