Evening star. [volume] (Washington, D.C.) 1854-1972, 1948-08-25
Uncertain Funds
Prompt Plan for
.2D.C. Budgets
One Would Cover
Bare Needs if No New
Revenue Is Found

With prospects OF an imposing
deficit looming ahead, District Off
Gals are considering the feasibility
Of setting up two separate budgets
for the next fiscal year, Deputy
Budget Officer William G. Wilding
said today.
In such move, the officials would
set up No. budget covering only
essential expenditures for operat-
ing the city within the present tax
framework, and a No. 2 budget
permitting expenditures for con-
struction and other needs if and
when additional funds become
available.
Mr.. Wilding said that jobs now
under construction are among the
Districts desperate building needs
and must be provided for by the
new budget.
Ten years ago, when the city
faced a $1,80O,000 deficit, the local
government submitted separate
budgets to the Budget Bureau.
S1,600,0O0 Deficit Seen.
1t IS almost certain there will be
$1,600,00 deficit at the end of the
present fiscal year, whether Con-
gress grants the District a sales tax
or not. 1t may swell to as much as
$l4 100000 more by the end of the
fiscal year 1850.
The Districts budget for fiscal
year 1949, which began last July /,
is a little under $100,OOO,O0O Dis
trict reserves were depleted and
various proposals were cut off by
Congress in keeping the overall
total under the S1O0,O00,0O0 amount.
When preliminary planning for
the next fiscal year began. the Com
missioners ordered the total $780,
100000 requested by department
heads cut to about $95 900 ,OO0-S5,-
100000 under the figure for this
year. The revised figures will be
made public in about two weeks.
1t is doubtful whether budget
officials can stay below $1,000 100000
for fiscal 1850, in the face of spiral
ing COSTS
No Reserves Left.
With no reserves in hand, the
normal deficit for the fiscal year
1850, beginning July l, 1949, may hit
100000 even at the present cost
of running the Government.
Raises for the approximately IT,
500 municipal employees would cost
the District another $5,500,0OO if
Congress granted local workers the
same $3.50 a year cost-of Living in
crease it gave Federal employees.
The possibility of per cent
sales tax presents a likely partial
solution to the budgetary problem,
and some District officials feel the
new Congress will authorize that
measure as the only" practical ap-
proach to the fiscal troubles.
Collection Would Be. Late.
A 2 per cent sales tax, with IAN
income tax for residents making
$4,000 a year would yield about
$13,500,o00 year, its advocates say.
Under the most optimistic condi-
tons, however, the District could
expect only three-fourths of the
amount in the first year the sales
tax is in effect, as the fourth quar-
ter payment by merchants would not
come until the end of the year. The
sales tax collected for the last three
months of the fiscal year would be
calculated as District income for
the next year.
In this case, the District would
collect at most about $1o,0O0,O0O in
sales taxes in the fiscal year 1850
100000 less than needed
Drastic Cuts Feared.
Congress is expected to examine
the possibility of reducing local OPP
Grating expenses. The Commits
sioners last June warned depart
ment heads that expenditures
planned for the fiscal year 1850
would have to be kept at minimum.
With rising costs, however, the
1850 budget promises to equal the
present one despite drastic expendi-
ture cuts.
Some District officials fear large
arbitrary slash in the District
budget by Congress or the Budget
Bureau which might seriously dis
locate the operations of the District
government