Evening star., 1951-06-21


$9.5 million, or ZIG per cent of
the general fund bill.
Now, only 20 years later, the
District has House-approved
budget of $137.7 million-more
than 200 per cent above the 1882
the Federal payment
would be $9.8 million for the gen.
Ieral fund, or 8.43 per cent.
The staggering gaps in reve-
nue., of course, have been filled
by boosts in taxes on District
residents. So much SO that while
some congressional critics still
complain about ''low rates" here
they now seldom. call District res
Iidents "a bunch of taxdodgers"-
once a favorite pastime.
Such name-callding somewhat
went out of style in recent years
when mushrooming budgets and
Ia dwindling Federal share forced
adoption of a flock of new and
higher taxes.
Some Examples.
To mention some Of them:
Automobile weight tax. increased
gasoline taxes. the inheritance
and estates taxes, higher and still
higher realty an5 personal prop
erty taxes, the city tax on cigar
cites, higher liquor license fees
and taxes, higher rates on beer
and then the big retail sales tax.
The authors of the new city
revenue programs sincerely hoped
they had found financial solu-
tions that would last for some
years. They did not pretend to
foresee, of course, the exact ef-
fects of imitation nor could they
predict any cutback on the Fed
eral payment.
How it has worked out may be
disputed but from the record OF
actual performance some students
Of city financing find this picture:
That. in effect, a city financial
crisis results in a heavy new layer
of taxes which, in turn, creates at
times an unobligated surplus and
this is an open invitation or ex-
cuse. sometimes used, for Congress
to chop down on the Federal share.
Effects Felt Later.
That the reduction in the Fed
eral share of the burden may be
a delayed-action bomb, explodlng
two or more years after the adop-
ton of new taxes, but that the
records indicate that it is there.
A case in point:
To meet two crises in city
finances. largely caused by inf1at-
ed costs of wages and materials
Congress ordered higher taxes in
1947 and 1949 and boosted the
Federal payment from Sc million
to So million and then to $11 mil
lion general fund.-. Things
looked better: even good.
But a small deficit left from the
fiscal year 1949 was converted into
Ia surplus by the end of fiscal 1850
first estimated at about $6 mil
lion and later swelled to sos mil
lion as the new taxes reached their
flood levels.
So then we find that the newly
Increased Federal payment, though
written into basic law, lasted but
three fiscal years before it was cut
down by $1.2 million for the fiscal
year ending June 30.
What wonder, then, that Dis
trict taxpayers have learned to
look with a jaundiced eye at re-
ports of a prosperous year the
city government may enjoy. They
could be an omen of trouble toI
come.
1882 Budget Pre-Trimmed.
The 1852 District bill of $137.7I
million, big as it is. still does not
meet all documented needs. The
Commissioners made heavy cuts
before the budget went to Con-
gresS. They not only cut down
heavily on requests for more per-
sonnel but also cut projects of
priority lists for construction.
A further cut in the spending
vas made by the Bates Subcom-
mittee so there was indicated al
prospective surplus for the end
OF the next fiscal year of $3.2|
million. But then the House cut
the Federal payment by 10 per-
cent, thereby reducing the sur
plus to 50 million.
If the Senate restores budget
items reduced by the House there
would be no surplus at all-inI
fact, a deficit if a full Federal
payment is not granted. And
overnight the District once again
will face the need of more taxes
II Congress tops these situations
with a pay raise for Government
workers.
There is no doubt but that
Uncle Sans share of District costs
have gone down while new, more
and bigger taxes have been laid
on its residents. It has become
automatic that the hiokar flen rfNsl