Evening star., 1949-01-10

realty and tangible personal prop
erty rate if necessary to avoid ;
deficit in city revenues.
Operation Costs to Rise.
The budget officer highlighted tn
revenue problems by reporting tina
despite the postponement of man!
construction projects, which woult
add to operation costs later, the ne
increase in the mere operation ex'
penses of the District for the mex
fiscal year was $4,243,677
About half of this added cost, HI
noted, is caused by legislated pay
raises and higher rates of pay fol
the care of District patients at st
Elizabeth's Hospital, 'over which
the city government has no control.
Less than 100000 of this rise
in operation costs, he said, was
caused by enlargement of the staff
of city workers. A considerable
proportion of the higher costs, he
explained, was due to imitation in
the prices of materials and repairs
He renewed arguments heard on
Capitol Hill last year that there
should be an increase in the Fed
eral payment, among other reasons
because the increase in Govern
ment pay levels-to which there
has been no official objection
means that the United States will
draw increased income tax pay
ments from Government workers
getting higher wages.
d. C. Fails to Get Same Benefit.
In other words, he said, the Fed
eral Government, by granting
higher pay to its employees, and to
city employees, indirectly was en-
riching itself" by getting in re-
turn higher Federal income tax
payments from these workers. The
District Government, however, does
not receive the same benefit, since
such a large portion of persons
working here, but claiming legal
residence in one of the States, is
expected from payment of the Dis
trict income tax. Less than 100000
persons are held liable for the city's
income levy, due to this exemption
of the salaries of Government
workers not "domiciled" in the
District.
Assuming that Congress will pass
the sales tax as matter of neces-
sity. Mr.. Fowler has the added
worry as to when it will become
effective, coupled with when the
pay raise for city employees is ef-
fective.
The pending budget assumes that
the sales tax would be enacted and
signed by President Truman by
May l, allowing two months for
the city to set up the collection
machinery before July l. Under
the present plan, sales tax receipts
would be collected on a quarterly
basis; only nine months receipts
would be taken in the next fiscal
year.
Tax Collection May Vary.
But if the presumed enactment
were to come in July instead of
in April, the amount of tax COL
lections available in the new fiscal
year would be reduced. This ac-
counts for the difference between
last year estimate of a first year
return of about 100000 from the
sales tax as against the s8,000,O0o
now anticipated for the 1850 fiscal
year.
AS to the city raise, it is estimated
to cost about S5,300,000 If it were
to be made effective next July l or
about double that amount If it is
made retroactive to last July l.,
when the Federal workers got their
increase.
Some congressional leaders have
proposed that 1t should be made re-
troactive to last July "as a matter
of simple justice" District officials
say they see the justice of this, but
note that it will add an unbudgeted
s10,621 900 to the 1850 city obliga-
tions.
Under the heading of added f1nan-
cial headaches Mr.. Fowler men
toned possibilities Of renewal of
District rent control not included
in the pending budget; future Dis
trict payments toward the cost of
Federal courthouse here; the pro-
posal for reduced hours for members
of the District Fire Department;
increased pensions for retired po-
licemen and flremen, their widows
and orphans, and higher retire.
lnent pay for policemen and fire.
men THAT would result from any
increase in the pay Of policemen
and firemen.
Income Tax Poses Problem.
One more worry to Mr.. Fowler was
the date on which the existing Dis
trict income tax will be repealed, in
keeping with the plan to adopt a
sales tax.
Tied to this is the question Of
whether the proposed new high
level" District income tax shall ex-
empt incomes up to $4,000 or only
to 5000. The final decision would
make big difference in the amount
of taxes collected by the District
AS set up, anticipating passage Of
the sales tax, the pending budget
presents possibilities of surplus Of
81 $4,000 at the end of fiscal 1850
But this is considered mere paper
in view of the expected new demands
for spending.
There have been reports that
President Truman, in forwarding
the Commissioners budget, woulc
give his blessing to the sales tax
But the document as submitted
noted only that the District Com
missioners we're proposing it ano
suggesting that further considera-
ton" be given to the enactment o1
this levy.
The message made the point, how.
ever, that the balancing of the Dis.
trict's general fund budget for tht
new year depends upon Congress.
sional approval of new tax legisla'
ton or disapproval of sizeable par
of the appropriation requests
efe fN