Evening star., 1934-05-20
TAX 'EARMARK|NC'
PLAN PROTESTED
Taxpayers Group Objects
to Proposed Method of
Repaying Loan.
ENTERTAINMENT A

With early action in prospect in the
House on the $20,0o0,000 public works
bill for the District which already has
received Senate approval. the Wash
ington Taxpayers Protective Associa-
tion yesterday filed a protest with
House leaders against the proposal to
"earmark" 10 cents of the local tax
rate TO pay back. the required 70 per
cent of the contemplated expenditure,
which is intended to be a P w. A.
loan.
Through Rufus S Lusk. the aSsoeia
ton declared the "earmarking" prin-
ciple has resulted in heavy and un-
warranted tax boosts in other COM
munities," and expressed fear 1t would
set a bad precedent here. If that is
the only alternative, it was added. it
would be preferable to abandon the
idea OF the advance.
The letter went to Representative
Bankhead, Democrat. of Alabama,
chairman, and all members of the
Rules Committee who are preparing TO
vote on a special dule to put the bill
through and Representative Cannon,
Democrat. of Missouri, chairman of
the District Appropriations Subcom-
mittee, and Representative Palmisano,
Democrat, of Maryland. acting chair
man of the House District Committee.
Text of Letter.
1t said: AT the last meeting of your
committee to consider the adoption
OF a special rule to secure action in
the House on the proposed borrowing
of S20,000000 from the P. w. A. by
the District, it was suggested that 10
cents Of the tax rate should be ear
marked or set aside to make certain
that 10 per cent Of the loan would
be repaid to the Federal Government.
This association, which has for its
principal object the securing of econ
omy in the operation of the District
government, took a careful poll to
determine the sentiment of its men,
bers on the proposal of the Commits
sioners to have the right to borrow
this $20000,000. In taking this poll.
it was made plain to the membership
that it was bound to add expense to
the District. After these projects are
completed, the operating costs would
be conSiderable-the sewage disposal
plant alone is expected to take 1884,
600 a year to maintain. Despite this.
the vote of the members of this Or
ganiZation, who pay a good part of
all District taxes, was on the whole
in favor of obtaining this right Cerr
tain individual projects when they
are sent to Secretary Ickes might be
opposed.
bad Precedent"
However, in the long run. we do
not believe it good business to obtain
this money at the price of 'earmark-
ing any of our tax money. 1t sets
bad precedent that may lead to ear
marking of taxes for schools, hos
pitals, and what not. 1t has resulted
in heavy and unwarranted tax boosts
in other communities, and the prac-
tice is being gradually abandoned.
1T may Immediately cause tax
rate rise in Washington. Would not
the tax rate be fixed to take care of
necessary operating, maintenance.
and capital charges, and then add 10
per cent more to pay back the P. w.
A. loan?
GAS much as this loan may be de-
sired, as much as it may De neces-
sary, we respectfully urge that no
special rule be made, if there is to
be tackled on to the bill this "ear-
marking of taxes, to secure repay
ment.
Financial Condition Cited.
"The District has proved TO be ex-
cellent pay on the Cramton park
loan. When that loan was made, it
was intended that the Dist:1ct should
amortize it at the rate of 81, per cent
year Because only about Is of the
authorized $16,000,0 900 has been ad-
vanced, it has been paid off at the
rate of 20 per cent a year. In ad-
dition, since the District is and al
ways will be the creature of Congress,
how can it help pay of the P. w. A.
loan even though it tried to default?
Congress makes the appropriations
and it may, if it wishes set the tax
rate.
1.-THE District Of Columbia has the
capacity and financial history that
provides all the security necessary.
What American city is in sounder
financial condition or has a better
record of meeting its obligations than
the District of Columbia?"
Meanwhile it developed yesterday
that prospects for this special rule
seem brighter as members of the
Rules Committee. are better informed
regarding the justification for each
item in the program. The committee
expects to meet tomorrow and vote
on this rule, which was requested by
unanimous vote of the House Dis
trict Committee.