Evening star., 1936-03-12
Member of the Associated Press.
S'SerVice Charges

When the housing division Of P. w. A.
began condemning land in cities for its
1ow-cost housing and m-clearance
work one of the questions raised by
Atlanta was what the Government
would contribute to municipal expenses
In lieu of the taxation lost through
transfer of the land to the tax-exempt
list. The Government, Of course, pays
no taxes. Atlanta was joined by Cam
bridge, Mass, and Camden, N. j., in
requesting a settlement of this issue.
AS more than forty projects are con-
templated in as many cities, the issue
is important.
P. w. A. authorities concluded, and
the cities accepted the proposition, that
the Government would pay five per
cent service charge" in lieu Of taxa
ton, the five per cent to be computed
on the gross rentals of the housing.
Controller McCarl ruled, however, that
such payments would require legislation.
Bills authorizing the payment have been
introduced in the House. Such a pro-
vision is included in Senator Wagner'S
omnibus building measure.
Five per cent of gross rentals is low
figure to represent taxation. It averages
much higher than that in most cities.
But there were special considerations.
Most of the condemned land was in
slum areas, where the yield from taxa
ton was low. The P. w. A. is under
stood to have found that while in some
cases the five per cent was lower than
the normal tax, in others it was higher.
1t represented, however, fair figure,
acceptable to both parties.
This situation is interesting because
Of its bearing on the controversy over
the Federal lump-sum contribution in
Washington. Some of the extremists in
the House would eliminate this payment
altogether. 1t has already been reduced,
in the pending appropriation bill, far
below any semblance of equity or fair
dealing. Government-oWned, tax-ex-
empt property in the District is not taken
from slum areas. Government property
is the most valuable in the city. As
SCISSOR Richards valued it at $3.50 ZOO, 900,
which, If taxed, would yield in excess Of
100000 annually. Government-owned
and other tax-exempt property in the
National Capital represents about forty
six per cent of the total valuation Of
taxable property. The ratio of tax-ex-
empt to taxable property in the Capital
is far higher than in any other city in
the United States.
A Service charge" on these vast hold.
tngs would represent more than S8,0OO,-
900. But fair considerations would in
crease that amount by additional mil
hons-such considerations including the
extraordinary expenses in connection
with development of Washington as the
Capital; the exclusive power exercised
by Federal Government, creating a
separate financial obligation; the disa-
bilities peculiar to the Capital which
make the tax burden relatively heavy
and curtail its tax-producing possibili-
ties.
Of course, any city that loses taxable
area, regardless of the improved condi-
tions resulting therefrom-such as elm
tnation of slum areas-demands some
compensating payment from the land
owning national Government. These
areas must still have police and fire
protection, water service, schools and
receive the benefit of other municipal
services. Being represented in Congress,
they will doubtless get what they want.
Why are the even more compelling
facts regarding the national Govern
mentS financial obligation toward main.
tenance and development of its own
Capital City so f1agrantly disregarded by
some members Of the exclusively govern
ing Congress?