Evening star., 1937-01-08


in the District as elsephere.
Normal Cost OF Supporting Govern
ment.-In order to apply in practice
the doctrine that the taxpayers of
the District may be expected to bear
costs equa, to normal costs for like
services in comparable communities.
It Is necessary to determine % the
terms in which costs shall be meas
ured. and t2) precisely what shall be
considered comparable costs.
% Criteria OF Comparable Costs
Comparisons between the District and
other communities might be made In
terms Of cost payments per capita or
effective tsx rates.
Earlier reports have suggested adop-
tion Of a standard in terms of effec-
tive tax rates. For example, a con-
gressional report OF 1914 on real es-
tate taxation stated:
Your committee was unable 70
see any good reason why a man liv-
ing in the District Of Columbia hav.
ing property there should not be as
Sessed substantially the same rate
as is assessed on like property OF
like individuals in other similar
municipalities.
All reports on fiscal relations sinco
/ 1914 have adopted this view either ex-
pressly or by implication.
Comparison of the District and other
communities on the basis of effective
tax rates has much to commend il
Citizens are more directly concerned
/ with what they individually have n
pay for governmental services than
with the expenditures made in provid-
ing the services. Moreover, differ
ences in the ability of different COM
munities to support public services arr
reflected in the various tax bases
property. income. privileges. etc.
A standard In terms OF effective te-;
rates implies that the District shall bo
required to raise from local sourcrs
whatever amounts may be derived b.
applying the effective rates prevailing.
on the average. in other comparab'e
communities and that these amounts
shall be supplemented from the Fed
eral Treasury If and to the extent
that they prove deficient for support
of the local government in any year.
This presupposes. however, that the
District has revenue system similar
to the State and local systems OF COM
parable cities This report shows that
the taxing system in the District is less
diversified than the systems in other
| cities 1t shows, on the basis OF field
appraisals Of typical properties. that
/ the effective rate of property tax on
real estate is materially lower in the
District than in II comparable cities.
I It shows also that the aggregate tax
load upon typical taxpayers is mate.
rally lower in the District.
Low Effective
! Property Tax Rates.
| Most OF the differences between the
District and the average Of other cities
| in total tax load reflects low effective
/ property tax rates and some Of the
! difference results from lack Of diversity
! In the revenue system Of the District.
/ Until the District system conforms 70
the normal State and local pattern
/ comparisons in terms OF effective tax
/ rates will be more difficult to interpret
/ than comparisons based on govern.
/ mental cost payments per capita. Fur
| thermore, reliable data are not regu.
, larlv available for comparisons OF ef.
! fective tax rates and will not be avail.
/ able until provision is made for pc.
riodic reappraisal of property accord.
| ing to uniform valuation technlques
and for reporting Of effective tax rates
determined on this basis. Cost pays
ments have been compiled regularly on
a well-defined basis by the Bureau OF
Census in its Financial Statistics OF
Cities and its similar series for States.
Comparison in terms OF cost pay
ments is. therefore. more practical.
The data for States are not at present
compiled This series clearly should
be revived and extended. II 1t Is not,
the State statistics necessary for the
Federal-District fiscal relations for.
mula may be gathered for this par.
ticular purpose.
~ Comparable Costs,-The actual
costs of general departmental activi-
ties of the District government ~
present are not comparable with those
OF other cities. Expenditures Of the
District government include some
items that are not for ordinary local
services but for the special beneflt OF
the national Government. These must
be deducted from District payments
for purposes of the comparison. Like
wise there must be deducted expenoi'
lures made to meet unusual require
ments imposed upon the District by
Congress-. e., the tuition of non.
resident children admitted to the Dis.
trict schools without charge; excess
payments for public Improvements TO
the extent that these are made In
order to enhance the District in its
special role as seat Of the national
Government, and excess costs OF orol.
nary services occasioned by meeting
the relatively higher Federal stand
ards q employment. On the other
hand, additions must be made for
those services ordinarily rendered by
State or local governments which are
provided In the District by the Federal
Government.
With the changes recommended
above under the headings, Inter
governmental Contractual Services
and Capital Outlays." the regular ac-
counts of the District government
will show directly the actual costs Of
local governmental services, since spe-
cial services to the Federal Govern
ment and other extraordinary serv-
ices will have been eliminated and
services rendered by the Federal Gov
ernment will have been added.
Adjustments in Aggregate
Cost Payments.
1t is necessary to make some adjust
ments in aggregate cost payments Of
| local governments elsewhere, as re-
ported by the Bureau Of the Census,
| if they are to be comparable with the
net costs Of local services In the Dis
trict. To city expenditures must be
-