Evening star., 1936-07-05
DONOVAN ADVISES
$1.5OD. c. TAX RATE
Be KEPT THIS YEAR
Increase Held Unnecessary
Despite Net Deficit
of $3.50, 365.
SHORTAGE OF $4,000, 900
REDUCED BY SURPLUS
City Commissioners Will Get Fis.
cal Report at Next Meeting
Tuesday.
BY JOHN L. HACKNEY.

In spite of the fact that District
expenditures will exceed current gen.
eral tax revenues by close to $4,000.
900, the District will be able to main
tain its existing S1.50 tax rate dur
ing the fiscal year. according to a re-
port for the Commissioners made yes
| terday by Mai. Daniel J. Donovan,
District auditor.
| The Commissioners, however, be-
cause of the holiday, have not yet
received the report, but will have II
before them for consideration at their
next meeting on Tuesday.
Maj. Donovan showed that, includ-
ing the use of s2,758,044.60 surplus
with which the fiscal year began last
Wednesday (July y, the District will
end the current year with net paper
deficit of S960,365
Such deficit will be the second in
recent history of the District govern
ment, a shortage of $62.742 having
resulted in 1888.
Two Sources at Hand.
| Maj Donovan already has turned
to two sources to make up the funds
that will be lacking. The study Of
fiscal relations, for which Congress
earmarked $4,000 from the Federal
share and which is expected to estab-
hsh the amount of fair and equitable
national acceptance, and the Commis-
sioners' Special Committee on Texa-
ton, he said, will have to find the way
to meet the increased demand for
general revenue.
The auditor explained that the de-
ficiency figures are based wholly on
general revenues and do not include
the taxes levied for special purposes,
such as the gasoline tax and the in
come of the Water Department.
Nor does the report consider the
surplus funds on deposit with the
Treasury Department raised under the
/ act of June 30. 1922. which, since
1927, have enabled the District to
operate on "pay-as-you-go" basis.
| That fund remains in the neighbour
hood of 100000.
The current appropriation Of S43,-
100000 is the largest ever made for
the District except in the years OF
1881 and 1882 Only once before,
however, has the total expenditures
from the general fund exceeded the
general revenue. Meanwhile, the Dis
trict has been able to pay its bills as
they came due, because of the re-
serve surplus set ,up nine years ago.
Extracts From Report.
ok AF Ca1t,v,,I1ia Mai
Donovan said, based on presently
available information, and based also
on revenue only that may be raised
under provisions of existing law. will
close the fiscal year ending June 80.
| 1887. with an estimated deficit Of
S960.365.
| This deficit refers only to the gen.
| eral fund and does not deal with or
include revenue of the Water De-
partment. Notwithstanding this esti-
mated deficit, no increase is recon-
mended by the auditor in the tax rate
of S1.50. -"
"The statement for the fiscal year
1887 shows that the District will COM
mence that year with revenue sur
/ plus brought over from the fiscal year
1886 of S2,758, ,04460, and that the
total estimated general fund avalabil-
| ity for that year, including the net
Federal payment of s4950,000, is $685.
048, ,044 60. The total estimated ap-
preparation and other charges against
the general fund for 1887 amount to
40,008,410 thus leaving a revenue
deficit at the close of the fiscal year
1897 of $500 1865.
These figures show that the Dis
trict's current revenues with the $3.50
tax rate and a Federal payment of
S5,000,000 are close to $4,000,000 short
of the amount required to discharge
the obligations carried in the District
appropriation act for 1887"
Would Defer Levy Debate.
Later in his report Maj. Donovan
asked that any action on increasing
the tax rate be deferred until after
the study to be made under the recent
congressional authority and until after
the special committee on taxation,
which he heads, can make a further
study of possible new sources of rev.
enue. Under instructions from the
Commissioners, only four general
sources are to be considered-inheri.
tance tax, increased gasoline tax,
weight tax on motor vehicles. and an
increase in public utilities taxes.
"The conclusion is inescapable that
the District of Columbia now needs
n e money than it is able to raise
(See TAX RATE, Page A-5.)