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

mouse MAJORITY Leader MCCOr-
mack today promised to give his
support to the Senate pproved
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
ment-owned acreage here. after GER
tain deductions, TO the total land
area It's application, it is estimated.
would raise the present lump sum
Federal payment from s6,00000o to
approximately S9,000,000 in the fiscal
year beginning July |
Representative Mccormack point
ed out that in his IA years as
member of the House he has con-
sistently" supported proposals for
increasing the amount of the Federal
payment toward the cost of operat-
ing the District government.
Realty Tax Yields 61ec OF Revenue.
Mr.. Mccormack made known his
position after Chairman Randolph
of the House District Committee
Yesterday appealed to the members
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 s175 real estate tax
here is producing about two-th1rds
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. K.
/ 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.
To Justify the statements ne
quoted real estate tax rates in %
cities. A few of these cities may
riehtfullv have been called COM
parable cities, but 1t is dlfflcult 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, it may be
assessed at rs per cent OF market
value. In the District. it happens to
! be assessed for taxation purposes
at slightly more 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 a study of the
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 Washingtons size
in the United States.
"I refer you to House Document
lO2 Seventy sixth Congress, first
session, District of Columbia tax
study report made to Congress pur-
suant to act of May is, 1888. and
submitted January Is. 1889 The
report was prepared by the special
staff under the direction Of Mr..
Colin F. Stam, 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 6l.76
per cent of u selected States and
64.77 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 1930-l936. the total sales price
was s131 90l,9l7, as against an as
sessed value of sl36,715 500, or an
average ratio of 104 per cent assessed
value to sales value.
The Pond report recommends
that the maximum rate Oh real es-
tate and tangible personal property
should be s175 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
s33.940.000, 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-
tributess60 per cent of the total gen.
eral revque account"
Byron Gets 0. P. M. Post