Evening star., 1941-03-06

merely provides a simple and direct
method of equitably distributing the
actual costs. It's adoption at thi!
time would solve the long discussed
problem of fiscal relationship be-
tween the Federal and District Gov
ernments and would also provide
the District with revenue which will
be needed sorely in connection with
the national defense program II
this Jurisdiction"
Commissioner McCoach, at the
outset of his testimony, pointed ou
that the financial setup of the Dis
trict is separate and distinct from
that of the Federal Government.
1T is financed by taxation OF its
residents" he said, using in general
the same forms of tax as other mu-
inequalities and States plus direct
Federal appropriation which at the
present time amounts to $4,000, 600
a year. The revenues are divided
into three separate funds-hlghWay,
water and general.
The highway fund receives rev.
enues from the gas tax and sale OF
automobile tags. Under existing law
this fund can be used only for high
way purposes, including certain in
cidentals in connection therewlth.
The present local gas tax Is un-
usually low, cents per gallon. A
highway survey is now in progress.
Within a few weeks preliminary
report embodying a comprehensive
program of essential improvements
will be completed. At this time I
hope that the Commissioners will
be able to submit suitable recon-
mendations as to the required i'm
provements, the time required for
construction and the means OF
financing the program.
No Water Money Since 1928.
"The water fund receives its reve-
nues from the water users, except
the Federal and District govern
ments. While it is true that the
Federal Government originally con-
structed portions of the water sup
ply system and from time to time
general funds (made up in part
from Federal appropriations have
been utilized for water purposes, no
contributions of any kind to the
water fund by the Federal or Dis
trict governments have been made
since 1923, although the value OF the
water used by the Federal Govern
men has now risen to over $500, 900
per year at present rates.
The water fund now has a sur
plus of about 100000. The ma
tional defense expansion OF the city
requires the expenditure of por-
ton of this surplus during the next
fiscal year. In the next few years
large expenditures for water supply
estimated by some at from SIC, ,000,-
900 to s15,0OO,0O0, will be required.
THE general fund receives all
general taxes, including real estate,
personal property, alcoholic bev-
erages, income taxes, fees, etc, plus
the Federal appropriation, which at
the present time is s6,000,000. The
fund covers all operating and i'm
provement costs other than those
mentioned.
Logical Determination Upset.
Prior to 1920 the Federal Govern
ment shared the expenses of the
District on a $3.50 basis. From 1920
ito 1925 Fiscal year, 1t shared on q
so DISTRICT 40 FederaD basis. Since
1925 the Federal Government has
shared the costs by lump-sum ap'
preparations apparently determined
arbitrarily and without logic. During
this period the general fund ap-
preparations have been increased
from s31 100000 to an estimated
$44,714,000 for the next fiscal year
During the same period the Federal
appropriation has been reduced from
SO 900 900, or 1888 per cent. to s6,000,-
900, or 1912 per cent. The area OF
Federal holdings increased from
1O.978 acres in 1884 to 1881 acres
in 1910, an increase of 1858 acres, or
almost 20 per cent"
Historical Outline of Policy.
Senator Overton, in his detailed
explanation of the formula. ex-
planned that from the organization
of the District to the present time
Congress has provided Fecera.
payment toward the expenses OF the
city. He then gave an historical
outline of the fiscal relations policy
saying:
During the first SO years Of our
Government, or from 1890 to 1879
there was no definite plan for allot-
ments. There were years in which
the Federal Government made nc
contribution to the local government