Evening star., 1952-04-15

A partial tert OF the state
ment of John A. Reilly, repre-
Senting the Board of Trade,
today to the Senate Appropria-
tions subcommittee on the Dis
trict'S budget follOWS::
The keystone of the 161-year
history of fiscal relations between
the Federal Government and the
District of Columbia has always
been the attempt to arrive at an
equitable amount to be paid by the
United States to the District.
The Federal payment, as the
members of the committee know,
was made in very small amounts
in the early history of the Ma
tion'S Capital; was then set at so
per cent of the budget in 1878. at
40 per cent in 1921, and in recent
years has generally been a lump
sum payment approximating 10
per cent.
The existing law provides fer
payment of $12 million annually
by the United States. Such a sum
is inadequate to discharge the
Federal obligation for services rem
dered by the local community and
for the loss in revenues resulting
from the fact that more than so
per cent of the potentially taxarle
land in the District has now been
removed from the tax rolls.
Water Payment Falls Short.
We question quite seriously the
wisdom of the action of the Con-
gress in earmarking only 81 million
for the water fund as payment
for water consumed by the Federal
Government when for several years
the actual cost of such water
service has actually exceeded this
amount and, as shown on page 354
of the House hearings, will for
fiscal 1852 be at least ST. .267 900.
We do not believe that the con-
Stituents of those in the Congress
expect the water users of the Dis
trict to Subsidize the Federal Gov
ernment to that extent. They
would certainly object to such a
procedure in their own cities.
I will not impose upon you to-
day by reciting the countless argu-
ments and presenting the monu-
ment of statistics which in our
judgment support the argument
that the Federal payment should
be substantially higher than the
$12 million provided by law.
There appears to be general
acceptance of the principle at this
time that the United States should
pay to the District the amount
needed to operate the Nations
Capital in the manner desired by
Congress and the people, and in
the manner befitting the dignity of
the most powerful Nation on the
face of the earth, after the res
1dents of the District have paid in
local taxes and fees amounts which
are comparable to those paid by
their counterpartS in other Amer
lean cities.
Taxpayer Here Not Favored.
We have carefully reviewed local
revenues being collected by the
District and related them to fig
ureS of other cities, also the vari-
Gus types of taxes collected there
in, and we believe it is abundantly
clear that the people of the Dis
trict are paying taxes which are
least comparable to those III other
cities and which, in fact. excee;l
those levied in many Jurisdictions.
We submit that there is, there
fore, a compelling obligation on
the part of the Senate to correct
the grossly unfair action of the
House by restoring at least the
$2,400.00O reduction i'll the Fed
eral payment voted by that body.
The amount suggested by the
House represents only 1893 per
cent OF the general 1und DuQget-
the lowest percentage in the Dis
trict's history.
In acting upon the District ap-
preparation bill. the House APP
preparations Committee applied
three specific premises as basis
for its recommendations.
Cd That sufficient reduction
should be made to permit each Of
the separate funds to show an
adequate operating surplus for
possible contingencies:
CD That wherever possible, no
activity should be granted an
amount in excess of the 1852 ap-
preparation without substantial
Justification; and
90 In connection with the pro-
posal to deny increases, the COM
mittee specifically referred to the
requirement of the Budget Bureau
applied to all other Federal agen-
cies, that amounts for Within