Evening star., 1935-12-15
Fiscal Equity Formula.

definite formula to govern the equitable
sharing of the expense Of running the
Nations City between the Nation, which
established it and controls it and the
local taxpayers who lack all power but
bear the major part of the burden.
Every fair study of the problem Of
financing the National Capital has led
to the inevitable conclusion that a
formula readily adaptable to changing
conditions is essential.
The congressional joint committee Of
1873 found that a definite proportion
plan at ratio of flfty-fifty was equit-
able. The findings of the joint commit
tee of 1915 did not result in chang
ing that plan The committee of 1922
decided that the definite proportion
idea should be continued but changed
the ratio to 40 per cent by the United
States and so per cent from the revenues
of the District. The temporary lump
sum method of recent years has been
based upon no reason Of either business
or equity-it has been merely an arbi-
trary abuse Of unrestricted power.
The question of setting up formula
Is again raised by Commissioner Hazen,
who is anxious once and for all to Danish
the annually recurring controversy over
the question Of what part of the District
budget will be paid by Uncle Sam. Uncle
Sam as the largest single property owner
in the District must naturally be reck-
oued with whenever budget making is
undertaken. That information is the
natural point of beginning and it is diff
fcult to proceed until it is known.
In the present instance, Mr.. Hazen is
inclined to follow the plan of the Bureau
of Efficiency. While that is far superior
to the planless method now in practice, it
omits from consideration a number Of
very important factors which in equity
should be taken into account in arriving
at the national obligation. 1t is neces-
sary that these factors be determined as
a preliminary to the setting up of any
formula which may be used annually to
fix the relative share of each of the
partners in the National Capital enter
prise.
There appears elsewhere in The Star
today discussion of the question of
the national obligation toward the main
tenance and upbuilding of the countryS
Capital. 1t is held that among the de-
termining factors to be considered are:
l. The obligation based upon the large
percentage of District area with improve
mentS held by the United States and
exempted from taxation.
2. The inability, through constitutional
limitation to extend the District taxable
area beyond its boundaries into adjacent
suburbs as would be the case of overflow
Of urban population in any normal city.
3. The implied promises made to the
original proprietors of the land compris-
Ing the original city of Washington in
return for their great liberality to the
young republic and to the purchasers from
the National Government of donated lots.
4. The magnificent scale of develop
ment required by the original plan of
the city, neglected until 1873 but main
tained since that date, imposing heavy
burden upon the local taxpayers.
5. Based upon the absolute national
control of the Capital City, which is
without political power of any descrip-
ton. Political power and financial OBJ
legation are iAseparably coupled 1t nat
urally follows that primary and full re-
sponSibility both in respect to the control
and to the maintenance and upbuilding
Of the Capital is in Congress, represent
ing the Nation. If the Nation controls,
1t should pay, and to the extent that it
controls, it should pay.
6. There is also an obligation springing
from the demands of patriotic pride in
the Capital and expressed in the demand
that it be developed and maintained on
magnificent national scale.
z. The heavy payment by the District
Of national taxes exceeding that of half
of the States, and coupled with denial
to Washington of participation in fixing,
collecting and spending this tax money,
is clearly another factor to be consid-
cred in laying the basis for an equitable
formula.
8. The millions of dollars of national
funds. to which the District is no mean
contributor which have been distributed
to the States as grants, bounties and
subsidies, and from participation in
which the District has been barred must
also be considered.
The obligation of the District is readily
determined and only limited by its abil-
ity to pay through its local taxes what
ever Congress may arbitrarily require.
without definite formula, which would
operate almost automatically, the Dis
trict as the silent and impotent partner
Is at the mercy of an all-pewerful alien
legislature in which it has no repre-
sentation.
Equity demands that We have fair
fiscal formula to be applied to the essen
tial factors, whether or not definite
percentage ratio Of contribution Is
e,