Evening star., 1937-01-08
HHE conclusions and recommen-
dations of the report on fiscal
relations between the United

Proposals developed in this fact
finding survey are intended to Sys-
tematize the fiscal relationships OF
the United States and the District
OF Columbia Governments. Narrowly
interpreted, the problems of fiscal re-
lations involve only direct interrela-
tions of the public treasures OF the
Federal and local Governments and
might be defined and solved largely
on an administrative level. How
ever, the questions which require set
tlement go much deeper than this
In broader sense, fiscal relations
between the two Governments COM
prise all policies operations, and ar
rangements affecting the distribution
of costs of government between resi-
dents and property owners of the Dis
trict OF Columbia and residents and
taxpayers. of the country as whole.
Any policies or arrangements which
place part of the cost of local govern
ment service upon the National Gov
ernment are within the subject OF
fiscal relations. Likewise, any poll
cies or arrangements which place part
ment upon the local government or
discriminatory upon the local popu-
lation are within this subject.
A study of the fiscal relationships
OF the two Governments could be
made without considering such prob
lens as local suffrage. local admins
trative techniques and organization,
or the details of financial procedures
but it would be incomplete. These
questions must be distinguished in
order that the main problem may be
resolved into its essential elements
and treated dispassionately. but these
matters merge with questions OF fiscal
relationships and are so bound up
with them in popular discussion that
they cannot be ignored. 1t there
fore becomes necessary to consider
their significance and to develop
sound and workable suggestions for
the solution of these problems. As
these borderline points OF irritation
are clarified and settled. the central
fiscal problems will be solved more
readily, equitably. and finally.
Legal and Political
Status of District.
A clear conception of the legal and
political status of the District gov
ernment must underlie any proposals
for adjusting the fiscal relations OF
the local and National Governments.
Legally. the District is neither State
nor a territory OF the United States,
though for certain purposes 1t is treat
ed like one or the other. 1t is pc
culiar type of municipal corporation
charged with duties performed in other
communities by the State and local
governments and enjoying by virtue OF
its position as the national seat OF gov
eminent certain of the constitutional
tmrunities and privileges Of the Fed
eral Government. States and cities
outside the District, for example. may
not impose income taxes on the SAL
aries Of Federal employees nor does the
ordinary city enjoy as matter OF
right tax exemption on property which
II NAV own in another State. The
District of Columbia. by virtue OF its
Federal status. may be authorized oy
Congress to tax the salaries OF Federal
employes. BY the same token it holds
property in other States free from
State and local taxation.
It's Federal status makes the District
OF Columbia subject to congressional
control in degree that is unique IN
American government. The territories,
such as Alaska and HAWAII, occupy
much the same legal status as the Dis
trict in the Federal system. but in the
territories Congress may divert itself
of its authority whereas in the District
It NAV not Without constitutional
amendment Congress may not grant
to residents of the District suffrage
in national affairs or voting represen-
tation in Congress nor may it abdicate
its own position OF authority over local
affairs 1t may delegate administra-
ton and may permit local self-deter-
mination even upon matters OF oper-
ating and fiscal policy. but no par
ticular Congress may bind its success
sors or even itself to refrain from
overriding local decisions and actions.
The local government of the Dis
trict was established and is controlled
by acts of Congress. Local govern
mental operations have been subject
to congressional control in detail al
most since the District was organized.
Before 1874, however, the inhabitants
were permitted to exercise limited
suffrage in local affairs. Since 1874
they have had no suffrage whatever.
Essential Objectives
OF Settling Question.
The essential objectives to be sought
by any proposals for settling the fiscal
relat ations of the United States and Dis
trict governments are as follows:
/. In most general terms. to pro-
vide Congress with an adequate and
permanently applicable guide for de-
termining annually what is fair and
equitable amount. If any. to be paid
from the United States Treasury to-
ward the expenses Of the District
government.
2 To simplify the legislative prob
lem by rendering unnecessary the per-
ennial controversy over the form and
amount of Federal allotment to the
District government. This should make
1t possible to concentrate in the hear
ings and congressional debates on the
relative merits of the proposed appro-
priation items. rather than upon ques-
tions Of the relative legal and moral
rights Of the District or outside tax
payers.
8. To simplify Federal budget prob
lens by defining for the Federal budg-
etary authorities the role of the Ma
tional Government in financing the
District. by giving them guide or
working rule by which to gauge the
net amount Of Federal payment, If
any, to be recommended for any par
ticular year.
4. To define the respective roles OF
Federal budgetary authorities and Dis
trict budgetary authorities with regard
to the detailed items comprised In
District estimates.