Evening star., 1941-05-06
.0verton Plan
Gets BACKING
Of Mccormack
House Majority
Leader Pledges
His Support

House Majority Leader McCor-i
mack today promised to give his
support to the Senate-approved
Overton bill containing a formula
designed to settle the annual CON-
troversy in Congress over fiscal
relations between the Federal and
District governments.
The measure is scheduled to be
called up in the House Monday. The
formula it prescribes would fix the
share of the expenses Of the Federal
Government on the basis Of Govern
acreage here. after GER.
tain deductions, to the total land
area. It's application, it is estimated, I
would raise the present lum0 sum
Federal payment from 5000 900 to
approximately s9,000000 in the fiscal
year beginning July l.
Representative Mccormack point
ed out that in his IA years as a.
member of the House he has Cons
sistently" supported proposals for 1
increasing the amount Of the Federal
payment toward the cost of operat- |
ing the District government.
Realty Tax Yields 67ce of Revenue.
Mr.. Mccormack made known his
position after Chairman Randolph I,
of the House District Committee
Yesterday appealed to the members 1
to give him utmost support in seek
ing House approval of the Overton
bill. and Representative Hunter,
Democrat, of Ohio told the House
the present SITS real estate tax
here is producing about tvo-thlrds :
of the general revenues and that
the District Committee took that
fact into consideration before ap-
proving the Overton bill.
Representative Hunter. who Is
chairman of the Fiscal Affairs Sub
committee of the District Commit
tee. in his statement to the House
said:
Mr.. Speaker, few days ago. the
gentleman from Kansas, Mr.. Rees,
offered some objections to H. r.
349O, which includes the Overton
formula for determining the annual
payment the Federal Government
will make toward the expenses OF
the District of Columbia.
List of Cities Challenged.
THE gentleman's objections were
based on what our Investigations
have shown to be an erroneous as
sumption that residents of the Dis
trict are not paying fair and just
proportion of taxes, as compared
with the residents of comparable
cities elsewhere in the United States.
ITO Justify the statements ne
quoted real estate tax rates IN "a
cities. A few of these cities may
rightfully have been called COM
parable cities, but 1t Is dlfhcult TO
picture Sioux City. Iowa; Phoenix.
Ariz.; Cumberland. Md; Topeka,
| Kans.: Fargo, N. OAK, and some OF
| the other cities on that list as COM
parable cities.
Methods of Valuation Considered.
The gentleman from Kansas" he
continued. "also did not take into
( consideration a fact that is known
| to every real estate operator In the
country: namely, that real estate
tax rate means very little unless
methods of valuation are taken into
consideration. In one area, real
estate may be assessed for taxation
purposes at so per cent OF actual
selling price In another, 1t may be
assessed at Is per cent OF market
value. In the District, 1t happens to
be assessed for taxation purposes
at slightly mors than 100 per cent
of actual sales or market value.
Your committee on the District
of Columbia did not approve the
Overton formula blindly One Of its
steps was to secure study Of tbs
tax situation by the Bureau Of Gen.
sus, which reported that residents
of the city of Washington paid
higher taxes than the average in the
10 cities nearest Washington's size
in the United States.
81 refer you to House Document
108. Seventy-sixth Congress, first
session, District of Columbia tax
study report made to Congress pur-
suant to act of May 16, 1888, and
submitted January Is, 1889. The
report was prepared by the special
staff under the direction of Mr..
Colin F. STAN, chief of staff. joint
committee on internal revenue tax
alton, and Chester B. Pond, director
of the District of Columbia tax
study, commonly referred to as the
Pond report.
Sales Prices Under Assessments.
This report shows that taxes on
property represents 6783 per cent of
the total taxes levied in the District
of Columbia, as compared with 6l76
per cent of IL selected States and
6477 per cent of the 48 States of
the Union.
The joint committee above men,
toned found that on investigation
of 9,795 sales Of real estate in the
District of Columbia. covering the
period 0-l936. the total sales price
was 31,901,917, as against an as
sessed value of s136,715 500, or an
average ratio of 104 per cent assessed
value to sales value.
The Pond report recommends
that the maximum rate on real es-
tate and tangible personal property
should be SITS per 500 assessed VAL
uation.
AN examination of the 1912 Dis
trict of Columbia budget shows an
estimated total revenue from all
sources of general fund taxation OF
$33, $40 900, and a real estate tax
yield of S22 100000. Therefore. the
real estate pays approximately two
thirds of the total general revenue
taxes of the District
The District of Columbia budget
also shows that the real estate con-
tributes go per cent of the total gen.
eral revenue account.
So Sales Cited.
'Mr. Dent, assessor of the District
of Columbia. recently examined the
; recorded sales of property in the
business district of Washington, en-
braced in the area east of Rock
Creek and south of Florida avenue