Evening star., 1937-01-08
SCHOOL BUILDING PROGRAM BLOCKED BY BUDGET
made by the departments Of each gov
ernment for services rendered by
agencies of the other government.

mined in each instance by the Ma
tional Capital Planning Commission.
60 Discontinuance Of the system
Of Federal lump-sum contributions
and replacement by (a) contributions
representing the excess, If any, Of
District governmental costs per capita
over the average in comparable cities.
this average to be determined by the
method prescribed in this report; and
% reimbursements for unusual costs
occasioned by congressional enact
ments.
(4 Preparation Of q capital i'm
provement program and the annual
capital outlays budget Of the District
by the National Capital Planning
Commission, with the right reserved
to the District authorities to omit spe-
cif1c capital improvements from their
regular budget estimates but not to
modify the proportionate cost alloca-
tions determined by the planning COM
mission.
(5) Clarification of the responsible
ity Of District authorities for the
complete annual budget by including
in the budget, as prepared by them,
all appropriations from District funds
for District purposes and complete
and reliable estimates of revenues.
(6) Review of the District budget
estimates by representative advisory
council which will receive the COM
ments and suggestions Of residents
and taxpayers and may append its
own recommendation but will have
no power to amend the budget.
Sharper definition Of the budgetary
responsibilities Of the District author
tiles. supplemented by review by the
advisory council, should assist and
expedite the work Of the Bureau of
the Budget in the formulation of the
District budget.
The principles and formula rec
commended in this report carry for.
ward to logical conclusion the doc
trines and suggestions embodied in
earlier reports on the subject of Fed
eral-District fiscal relations. Despite
differences in specific recommended
tions, former reports over a period Of
many years have agreed generally
upon the following more important
doctrines.
CD That property Of the United
States can not be taxed and should
not be taxed by any regular taxing
method.
(2) That the United States has a
cnpnio1 nhlinotinr RI ha
trict in accordance with its special
status as Capital.
90 That the District may fairly be
taxed for local purposes about the
same as other communities and that
the Federal Government, in view of
its close control of the District gov
ernment, may be expected to defray
local expenses not covered by such
taxation.
Findings Based
On Foreign Experience.
Review Of the practices Of foreign
nations indicates that few countries
make special grants to their capitals,
unless for special municipal services.
The survey of foreign practices leads
to- the following findings of special
relevance to Federal-District fiscal
relations:
U Nearly all capitals are subject
to supervision by the National Gov.
ernment, at least with respect to
municipal finance
(2) In all capitals, excepting the
District of Columbia and capitals
under dictatorship, residents have
some participation in municipal
affairs.
go National government property
in capital cities is taxable for local
purposes only if similar taxation OF
government property. is permitted in
all other cities. and usually such tax
alton, where permitted, Is restricted
to revenue-producing property.
"a Capital cities are not specially
favored by national subsidies unless
they are cities in initial stages Of de-
velopment or rendering specific serv-
ices for the national government in
return.
(5) Apart from Australia. where
there are special arrangements, no
government recognizes a legal obli-
cation to develop or maintain its cap
ital; but all governments expend ma
tional funds upon national property
and works in the capital.
60 In capital cities generally, the
attitude of local interests toward the
national government indicates that
indirect advantages derived from be-
ing the seat of government more than
balance any special financial burdens
which might be imposed by the pres
ence of government offices.
The application of the recommend
ed three-point formula is illustrated
below in terms of financial operations
Of the current fiscal year, ending June
80. 1887. The amounts are estimated
on the basis of the best information
available at the date of this report,
but they are necessarily subject to re-
vision in the light of the operating
experience of the entire fiscal year.
In the case Of capital outlays of joint
interest, the estimated amounts rep
resent averages of the three fiscal
years, 1884 through 1886, derived from
appendix c, tables TX, x and XII.
Estimates of 1897 Are
Determined by Formula.
In summary. the estimates for the
fiscal year 1887 indicate that under
the three-point formula the District
would have received net payments of
$2,072,037, instead Of the $4,000, 900
lump-sum contribution actually re-
ceived. The net amount is derived as
shown in table ga.
The net amount comprises payments
TABLE 3A.-Estimated Net Effect c