Evening star., 1949-01-10
103Mi||ionFund
With Sales Tax,
Asked for DC.
$3.50 Pay Roise Poses
New Budget Problem
Despite 20 Levy Plan

VI S1Uo, ,4ol ,UUU WhlCn depends
on a 2 per cent sales tax to keep
the city away from a big deficit
was sent to Congress today by
President Truman.
But even with early enactment Of
the sales levy, calculated to bring
in $l3,500,000 in full year of oper-
alton, the District once again will
be plunged into financial morass
as soon as city workers are given
the $3.50 pay raise already granted
Federal employees.
Prospects of going into the red
are sharpened by the Presidents
specific call for the pay raise to city
workers and school teachers. There
is wide Endorsement of the pay
raise plan.
District Budget Officer Walter L.
Fowler, who anticipates congress
sional approval Of the pay bills, said
this would mean still further tax
increases, higher Federal payment
or a drastic slash in the budget,
already cut back heavily from de-
partment requests.
Loan May Be Needed.
A Treasury loan is possible move
to cover costs of any extensive addi-
tional school construction or other
large capital improvement program
that might be ordered.
The city budget officer said the
District faces an immediate deficit
of about S8,0O0,OO0 if Congress
should fail to adopt the sales tax.
Without the sales tax and with the
expected city government pay rise,
Mr. Fowler said the District faces
a fund shortage of some $18,00O,000
in the new fiscal year.
The financial headache facing the
new year, beginning July /, is worse
this year than last, because almost
every cent of any cushion has been
used.
Department Budgets Slashed.
The budget total is $3,441 900
above this years, but this was cut
back by the Commissioners from
first requests of department chiefs
that ran to about $120.000,O00. See
ing that such outlay was impossible
they sent the proposal back with
orders for economy cuts. Revised
requests of the departments still
ran to $110,188,000. The city heads
slashed about $7,0O0.0O0 from this.
The budget calls for an outlay of
1854 $50 for permanent improve
mentS, which represents a cutback
of more than $40O0,OOO from de-
partment requests and provides for
almost no new projects. Funds were
provided to complete six school
building projects and the new Gall
llnger Hospital laboratory to con.
tinue work on Gallinger'S new Grip
pied childrens building and to build
second residence building for
medical officers at Glenn Dale San
atOrium.
Although department heads had
asked for a minimum of $50 more
employees at total cost of $685.
COO, the Commissioners requested
only 1876 new city workers at an
annual cost of $467061. The Police
Departments request for 148 police
men and 48 civilian workers was cut
to 30 uniformed privates and 10
plUiljST1c More fhoyo oI
nurses and hospital attendants
sought by the Health Department
were knocked out of the budget.
New Tax Collections Seen.
The Districts revenue problem
has been lessened by last-minute
surprise showing that the Federal
Budget Bureau, in cooperation
with the Commissioners. found
nearly 100000 in prospective tax
collections this year and next.
This amounted to the difference
between estimates of receipts, as
between last April's guesses and
those of last month from various
city tax sources. Notable among
those where increases were found
were said to be inheritance and
estate taxes, personal income pay
ments and tangible personal prop
erty returns.
But this only served to soften the
blow of financial troubles. Accord
ing to Mr.. Fowler With demands
plling up. ne stressed that even
whit adoption of the proposed sales
tax the city would face new deficit
problems.
Higher Liquor Tax Studied.
Higher taxes on alcoholic bever-
ages are among extra levies that
will be considered, he said. He
anticipated that a Treasury loan
would be considered when the time
comes TO plan for the financing of
a new school building program.
Asked about an increase in the
real estate and tangible personal
property rate, Mr. Fowler said the
question might be raised, but that
it should be remembered only about
100000 persons pay realty levies di-
1ectly.
"One of the aims of the proposal
for adoption of the sales tax" he
said, lis to make more people who
enjoy the benefits of the city's serv-
ices share in their costs"
Under the existing law, the Com