Evening star., 1954-06-06
Deficit toGrow
S5.4 Million in
District by 81
New Fiscal Problem
Posed as Revenues
Dip and Costs Rise
By John w. Stepp

A fresh look at the Districts
finances prompted forecasts yes
terday that by the end of fiscal
1857 the city will have a poten.
tial deficit $5.4 million greater
than was expected barely six
months ago.
This ominous prediction made
by District budget officials to
Chairman Case of the Senate
District Committee was based on
three principal factors:
/. Revenues in several impor-
tant categories are falling faster
than the budget experts ex-
pected.
2. Proposed new legislation re-
quiring bigger expenditures will,
If enacted, raise operating ex-
penses and capital outlay costs.
8. The upward spiral of oper-
ating expenses continues.
Cutbacks Uncertain.
These hard financial facts per-
sist despite the enactment only
last month of local tax increases
designed to provide nearly SIS
million annually to help finance
the $305 million 10-year public
works program that was author
lied at the same time
Whether this means cutbackS
in the works program or a trim
ming of municipal services or
more taxes. no one in authority
would say yesterday. 1t was in
dicated, however, that the works
program would be reduced only
as a last resort.
District Budget Officer Walter
L. Fowler made this observation,
however:
I'VE must move with extreme
care. We must scrutinize more
carefully than ever all appropria-
tions requests that will require
additional expenditures"
$14 Million Deficit.
Chairman Case asked for an
up-to-date report on the city's
financial status last month.
When he learned that by the end
of fiscal 1857 the city faces Q
potential deficit totaling $14 mil
lion-instead of the $8.5 million
deficit that was forecast last
January-the South Dakota Re-
publican gave this reaction:
II have not had time an ana.
lyze the report and draw definite
conclusions. But it seems obvious
that the legislative and appro-
priations committees of the Sem
ate must move with extreme care
In the years just ahead If the
District is to be kept on a sound
fiscal basis and the purposes of
the public works revenue bill
achieved.
When bills are considered and
passed that add expenses to the
District budget, the revenue
measures to finance the new
costs must be enacted along
with them"
Mr.. Case said he wanted the
report to give him background
material for the forthcoming
hearings by the Senate ap-
preparations subcommittee ham
ding District appropriations
for fiscal 1855 and because of
other pending legislation that
involves additional expense to
the District" The Senator serves
as an ex-officio member of the
appropriations subcommittee due
to his position as chairman of
the District Committee.
Further Budget Cuts Feared.
The House appropriations
subcommittee has concluded its
hearings on the record high
$l72.4 million 1855 budget re-
quests. Final action by the full
committee. however. is not ex-
pected before the latter part Of
the week.
Speculation centered on the
effect which the new deficit re-
port may have on members of
the Senate subcommittee. Con-
gress traditionally wields the
pruning shears on District
budget requests. The revised
figures could increase the prun.
ing activity.
On the other hand the legis.
lators may we'll respond to the
dire picture by appropriating the
full $40 million Federal payment
authorized by the public works
revenue act.
In any event. District Build
ing sources pointed out, by what
ever amount Congress decides
to cut the budget requests to
that extent will the potential
(See BUDGET, Page A-7O