Evening star., 1942-10-08
Senate Group
Asks D. Gu. ).
Fiscal Solution
MeCorron Report
DepIores Cut in
Federal Contribution

Federal Contribution
Deploring the sharp reduction
in the annual Federal payment
toward the expenses of the Capt.
tai in recent years, the Senate
District Committee today made
a strong plea to Congress to con-
slider some permanent solution OF
the fiscal relations problem at
an early date.
The recommendation was made by
Chairman McCarran in the printed
report of the committee on the bill
revamping the law governing tax
exemption for religious, charitable
and educational institutions here.
The bill was approved by the COM
mittee last month, and Senator Nc
Carran has been devoting consider
able time since to preparation of the
formal report.
Cites Reduction in Amount.
After explaining in detail the types
Of private institutions the committee
new bill, Senator McCarran turned
to the fiscal relations issue in these
words:
There is another class of prop-
erty which is accorded exemption
under this bill from taxation, and
that is federally owned property.
The inclusion of this property raises
the age-old question of what part
the Federal Government should pay
in the operating expenses of the Dis
trict government. For several years
the Federal Government contrib
uted to such expenses a sum equal
to 40 per cent thereof. And this is at
a time wnen the land holdings of
the Government were less than one
third of the present holdings, and
the value of the buildings erected
thereon was pitifully small as COM
pared to the colossal figure which
now represents their valuation.
While the growth of the Fed
eral holdings was taking place and
the value increased to staggering
figure, the Congress, periodically
and consistently, lowered the Fed
eral contribution annually until to-
day it is less than 10 per cent, or
S6,000,C00. This creates a situation
which ought to receive the early if
not the immediate consideration Of
the Congress of the United States.
Proper Adjustment Urged.
"In these days of adjustment. it
is important that the Capital City
should know what to expect in the
way of funds for its maintenance
and operation There is no reason
to pass legislation of a piecemeal
character, and it should not be diff
f1cult to arrive at fair and equi-
table figure which will render it un-
necessary, year after year, for the
officials of the District of Columbia
to resort to haphazard and make
shift measures to collect sufficient
amount of revenue to run the affairs
of the city. This committee feels
that proper adjustment in the fiscal
relationship between the two gov
ernments should be brought about
without delay and recommends inn
mediate steps be taken by the Con-
gress.
by the same token, the uncers
tainty which now exists with re-
spect to those privately owned in
stitutions which should be entitled
to the privilege of tax exemption,
should be cleared, and the passage
of this bill will accomplish that
end, while the settlement of the
problem of a Federal contribution
will simplify the work of the Dis
trict Commissioners for many years
to come
In 1925 Congress departed from
the long-standing principle of 9
fixed ratio of payment by the Fed
eral Government and the local COM
munity toward the expenses of the
city by appropriating an arbitrary
lump sum.
Overton Formula Recalled.
For a number of years the tenn
porary, unscientific lump-sum pay
ment continued without repeal Of
the substantive law calling for 81 q
fixed ratio of 40 per cent by the
Federal Government. Finally the.
law was repealed. and the practice
has gone on of fixing lump sum
for one year at a time.
In 1881 the lump sum was 50 $780,
600, but during the ensuing decade
it gradually was whitfield down. The
last attempt to return to a perma-
nent solution was made several years
ago by Senator Overton, Democrat,
of Louisiana, who worked out
mathematically exact formula, based
on the percentage of the land area
of the District used for national
purposes.
That formula, which could have
been adjusted each year merely by
determining whether the United
States had increased or decreased
its land holdings, would have raised
the Federal payment as Of 1910 to
about 81 per cent of that years gen.
eral fund appropriations.
The House. however, failed to an.
prove the bill after the Senate had
passed it. The Senate's effort re-.
suited In the House agreeing to
raise the lump sum at that time
from $4,000, 900 to 5000 900, but left
unsettled the question of a perma.
nent solution.