Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-09-11
New $4,000
Deficit Found
In Alexandria
Failure to Collect
Revenue Held Cause
Of Big Increase
By Ben Franklin

By Ben Franklin
Alexandria's 1854 deficit is
$4,000 more than city officials
thought it was when the fiscal
year ended June 80.
E. G. Heatwole, city finance
director, said in his annual re-
port released today that the def
cit amounts to $420,860 not
1903 900. as first estimated. Ma
jor cause of the increased deficit,
Mr.. Heatwole said. was the city's
failure to collect all the rev.
enues estimated in making up
the budget.
The deficit comes on top Of
a record budget of $7.6 million
for the new fiscal year which be-
gan July l and brought with
it three new taxes for city resi-
dents.
Would Slash Expenditures.
City Manager Ira r. Willard
said he will recommend plan
for slashing expenditures to Off
set the new and unexpected
deficit. Alexandria preparing to
levy a 10 per cent tax on utility
bills, a tax on rental income
and tax on builders and de-
velopers to support this years
budget. Officials said added rev.
enue to make up the shortage is
'out of the question"
Release of the city's annual
financial statement conceded
with release of the final survey
of the city government by the
Government Consulting Service
of the University of PennSyl-
vania, which ended its series Of
nine reports with a 200-page
critique of the financial admin
istration.
The report. most sweeping in
its criticism and in the number
Of recommendations-42 in all
in the $4,000 survey series, calls
for a change in the tax year to
match the budget year. The
present system, which will bring
in revenue from two tax years
1854 and 1955-with possibly two
different tax rates to support the
SIG million budget. shows the
dislocation which now exists"
the report declares. Officials
said it was the cause of the city's
unpredictable financial turmoil.
Tax Year From January.
Alexandria's tax year begins in
January. The fiscal year begins
July l. But tax rates are set
In January or February.
Say the experts: 1.-THE effect
of this is to hamstring budget
consideration by losing all con-
troll over revenue sources at the
time of preparing and adopting
the budget"
Secondly" the report points
out, sit is difficult to see how a
tax rate increase can be justified
in the middle of the fiscal year
The budget for the current year
Is already adopted and presum-
ably balanced, and the budget
for the following fiscal year has
not yet been considered, so who
can argue convincingly that in
creased revenues are necessarily"
Harassed city financial Of
ficers echoed that with: who.
indeed" Alexandria's budget
situation was so confused last
May and June that the Council
finally instructed Mr.. Willard
to prepare two budgets-one
with and one without a tax
increase. The tax increase won
in the end over the lone dis
sent of Mayor Marshall j. Bev-
erley. outspoken foe of taxes, of
the Government survey and of
Mr.. Willard.
Not Easy, Says Report.
The change would not be an
easy or a popular one. the re-
port comedies. Manipulating tax
payment headlines to fit the
new calendar would result in
net revenue loss of $3.50, 900
in the year of the changeover,
the survey estimated, but amor
tized over two years the amount
would become reasonably man
ageable"
Financing the change would
be eased by also changing the
method of collecting the per-
sonal property tax, which the
report says now approaches
administrative chaos" The sur
vey recommends that the per-
sonal property tax be made due
on May l to help the city over
the first five months of the year,
when revenue is lean instead of
being billed May l and due
November /. as at present.
The experts, in effect, called
the personal property levy a bad
tax because of inefficiency in en-
forcement, but in the face of the
deficit recommended increasing
the rate from SO to $40 per
500 and instituting a per cent
discount for prompt payment.
Divided" Structure.
:. The report blamed the city's
tangled fiscal affairs not on the
administrators. who were de-
scribed as having sense Of
dedication in an earlier survey
Of the overall administration.
but on "a financial structure
which is diluted and divided"
1.-The weakness of the financial
structure is apparent" the uni
versity experts declared. THE
director of finance does not have
direction and control of several
very important segments of the
financial process, and in the
vital area of tax administration
he has only as much authority
as persuasion and personality
can command"
Alexandria commissioner of