Evening star., 1946-03-09
4 Million Budget Cut
Indicated Despite DC.
Sales Tax Proposal
By Don S. Warren


be made in the record-breakins
s81 500, 900 District budget for 1947
despite proposals for a boosted Fed.
eral payment and city sales tax
it was indicated today by the Coffet
Subcommittee of the House Appro.
priations Committee.
Predictions of such action, de.
signed as insurance against munic.
ipal bankruptcy" were heard to.
day on Capitol Hill, although forma
decisions were deferred for abou
a week to await printing of the
transcript.
Committee reaction to burgeonine
budget requests, multiplied at yes.
terday's full day consideration o1
citizens views, and to the "virtua
certainty of enactment of the
penSng Federal pay bill that woulc
add about $4,000,OO0 to District
costs, indicated drastic action was
in the of1ng.
New Proposals Face Cut.
There was belief also that most
all the more recent proposals fol
additional outlays would be cut O,
rejected entirely.
Sentiment for a balanced budget
that would leave a cushion to ado
extra costs, reasonably to be ex-
pected. to next years bill zoomeG
yesterday when the Board of Trade
submitted its budget survey report
This warned of prospective addi-
tlonal financial burdens and recon-
mended both a higher Federal pay
ment and adoption of a sales tax
though legislative authorization
would be needed for both.
The report was submitted for the
trade body's board of directors and
its Municipal Finance Committee
by L. H. Parker, tax consultant
formerly for IL years member of
the staff of the Congressional Joint
Committee on Internal Revenue
Taxation.
ExemptS Food for Homes.
In recommending a sales tax
exempting medicines, food purchased
for home consumption and all sales
under 25 cents, he said this was
considered the lone sizeable source
of increased tax revenues that could
be adopted without doing injury
to the economic structure"
Mr.. Parker recalled that the Board
of Trade and the Commissioners
had recommended such a tax in
1889. 1t was suggested to round out
possible addition revenues along
with a proposed heavy increase in
the Federal payment.
On this point, he said it was be-
lieved quite likely there is a legit-
innate requirement to increase the
1947 budget to figure greater than
revenues anticipated for next year.
The primary responsibility" to pro-
vide the increased funds, the trade
body holds. he said, rests with the
Federal Government for reasons
recently outlined in the fiscal study
report by Representative Stefan, Re-
publican, of Nebraska, ranking
minority member of the District
Subcommittee.
I'VE desire to remind the commit
tee" Mr.. Parker continued, that
the steady decrease in the Federal
payment, which in 1920 amounted
to $2304 per capita, but in 1916 to
but $6.38 per capita, obviously i'm
poses a severe strain in this COM
munity. Here. the per capita
general-fund costs of operation have
increased so per cent in Is years
and the per capita general-fund
receipts have more than doubled.
while the per capita Federal pay
ment has shrunk by more than rs
per cent"
Cites General Fund Incnease.
General fund budget requests for
the next fiscal year, he said, repre-
sent an increase of more than IS
per cent since 1910. Voicing concern
over rapidly increasing costs of oper-
alton, he anticipated there would be
a further increase in estimates for
the 1948 fiscal year.
Congress, he added, Should recog-
nlze that the tax burden in the
District on residents who pay taxes
is now slightly heavier than the
burden placed on residents of the
surrounding Metropolitan Area"
Granting this, then Congress
should acknowledge that the "eco-
nomic stability of the District will
be harmed, because of a resultant
movement of homes and businesses
into surrounding Maryland and
Virginia" if there is an appreciable
increase in the tax load on District
residents.
In other words, the trade body
holds, he said, that there is a prac-
tical limit on taxes which can be
assessed here and that expenditures
necessarily must be held within
that limit.
Would Defer Construction,
The trade body also urged that
every capital improvement not "ab-
solutely essential to health and
welfare" should be postponed so as
TO leave construction materials
available for construction of homes,
the greatest need" in view of the
housing shortage.
This view of the budget was in
sharp contrast to most of yester-
days testimony. Most civic wit
nesses gave no outward considera-
ton to the budget totals or reve-
nues, but argued for increased funds
for various services.
Among these were delegations
from the Federation of Churches.
the Council of Social Agencies, the
American Automobile Association.
the American Association of Social
Workers and the group of working
mothers pleading for funds for con-
tinuation of the Districts child-care
centerS,
An exception was Mrs. Ernest w.
Howard, speaking for the Public
Welfare Committee of the Fedora
hon of Citizens Association, who
supported all requests included in
the pending presidential budget
and advocated that it be kept bal
anced" against revenues. She won
commentator from Chairman Cof-
fee for her reasonable approach.
More Employees Asked.
Representatives of the Voteless