Evening star., 1948-05-14
Bates Proposes
Bond Issue 10
Avoid Sales Tax
Hearings Completed
On Plans to Ruise
Revenue for. District
By Don S. Worren

CHAIRMAN Bates OF the House
District Fiscal Subcommittee, a
key figure in this city's tax pro-
grams, is seriously considering"
a selective and limited bond is
sue as a means of avoiding a
sales tax.
He made this pronouncement at
the end of hearings late yesterday
on the proposed sales tax, frankly
stating he would like to find alter
natives to the sales tax, if possible.
A longtime opponent of sales
taxes, he said he had not changed
his views-"yet." He insisted he is
still "open-minded" on the issue,
although repeating his basic dislike
of such levies.
District officials and numerous
members of Congress have declared
there is no alternative to sales tax
as means of meeting a prospective
deficit of from $500, 900 to $13, ,O0O,-
600 in the citys' finances next year.
The Joint District Fiscal Subcom-
mittees of the House and Senate,
that held hearings on sales tax
proposals is scheduled to decide
whether there must be such a tax.
If the answer is affirmative, studies
then will be made as to details of
the bills.
Three Other Possibilities.
Aside from a bond issue to take
care of immediate needs for con-
struction Of schools and certain
other pressing capital improvements,
Mr.. Bates said he is considering
three other possibilities in this
order: A moderate" increase in
realty taxes, a readjustment of the
Districts personal income tax and
finally the sales tax.
No decision is expected to be
reached before next week. Chairman
Cain of the Senate Fiscal Subcom-
mittee on the District, who has con-
Quoted the hearings jointly with Mr..
Bates, left Washington yesterday to
be away until early next week.
Mr.. Bates told reporters he had
estimated new tax revenues could be
avoided for the time being under
the pending budget by selling all of
the remaining securities of the Dis
trict's wartime capital improvements
fund. plus adoption of a bond issue
for $6,000,00O to $8,O00,000 for the
school and other construction needs.
He agreed, however, no moderate"
increase in realty taxes would be
able to fill the bill. If Congress en-
acted a pay raise of $3.50 or more for
Government workers, which would
be applied to city employees. On this
point, he said he had no thought
that any such burden should be
passed along to realty taxpayers,
whose rates this year were boosted
from SITS to 81, plus a 20 per cent
rise in assessments.
10 to IS Per Cent Boost Suggested
AS to moderate" increase in
realty taxes, Mr.. Bates has indicated
he is considering boost of 10 to Is
cents in the rate.
Sharp opposition to any boost in
realty rates was voiced yesterday by
Rufus S. Lusk, president of the
Washington Taxpayers Association
He testified a sales tax is "the only
fair and practicable solution He
reported that even now the larger
percentage of new construction ir
this area is going to the suburbs
where, he said, taxes are lower.
Benjamin Streiner of the Fed.
Grafton of Business Mems Associa-
tions said his group reluctantly ap.
proved sales tax as third al.
tentative. putting a proper" per
sonal income tax first and f1at
payroll tax second.
A sales tax was approved, with
some notifications, by Mrs. Ray
mond Cole, speaking for the Randlt
Heights Citizens Association. L
was opposed by Paul Herman o1
the District Grocery Stores, Edward
Hollander of the Greater Washing
ton Council, American Veterans
Committee; Ralph RUSSELL Local 3
United Public Workers of America
Herbert S. Wood of the Potomac
Cooperative Federation, and Irs
Koehne of the Freedom Foundation