Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-02-14
Second Citizens Unit
Backs Federal Loan
For Works Program
CONTINUED From First Page.)


''the only sensible approach"
His committee has worked
closely with the city heads in
developing the three-pronged
loan-tax-Federal payment for
mula sent to Capitol Hill. His
group is the outgrowth of an
earlier citizens committee which
came to the same general con-
clusion nearly two years ago.
Mr.. Reilly said it was "a fall
lacy to apply a pay-as-you-go
policy to capital outlay these
days" He paralleled the Dis
trict's capital outlay financing
problem with that of industry,
noting that industry has turned
to long-range borrowing as the
only solution.
I'VE were going to have a
whale of a time with the pro-
gram as it was" he declared.
I'VE couldn't possibly absorb
that which was included in the
loan through more taxes.
1.-THE whole philosophy Of the
program depended on long-range
borrowing, with the hope and ex-
pectation that the improvements
would generate additional rev.
enues to help meet the costs"
Other Loans UnchalIenged.
In addition to the general
fund. Federal loans also are be-
ing requested to help pay for
highway, water and sewer i'm
provementS. There has been no
indication that these have been
challenged, however, largely be-
cause they would go into self
sustaining funds.
Subcommittee sentiment for
earmarking new revenues Spe-
officially for public works expen-
diture has grown steadily dur
ing the hearings. The main
reason is fear that unless they
are pinned down, the added rev.
enueS might be spent for other
uses and become the target of
pressure groups, both in and
out of government.
The Commissioners also have
urged that the new revenues not |
be thought of as a permanent So
luton to other fiscal problems |
which may develop later. If rev.
enue needs develop for other /
than works financing, the city |
heads stress. these should be |
met as they occur in the future. |
Higher Taxes Slated.
The Commissioners original |
S4.5 million tax-raise plan called /
for increases on beer, liquor, Gig
arettes, individual income. bus
lines, communications and the /
premium tax paid on life insur- !
ance. The latter generally is con-
ceded to be dead.
All the others. it was under
stood, still are under active con-
slderation. Members insist, how
ever. that the study of possible
additional taxes is wide open"
and takes in the general funds
entire revenue structure.
Special emphasis is being CIV
en- to possible extension of the
sales tax, largely because of the
high revenues that would be-
yielded. Application Of the q
per cent sales tax to groceries.
Tor example, would raise an es-
t1mated 81 million a year, while
removal of the SIPS exemption I
on meals would bring an addi-
tional SIS million.
Study Grocery Meals Tax.
Interest also has been shown
1t was learned. in applying a re-
duced sales tax to meals and
groceries. City officials, for ex-
ample. are preparing revenue
estimates of per cent grocery
tax. and various lower exemp-
tons on the meal tax.
One reason this source is get
ting special subcommittee atten-
ton is that two-thirds of all
States which have sales taxes
apply them to meals and grocer
les.
The city studies also include
possible boosts in the present
$215 cent per $100 assessed
value real estate taxa tradi-
tlonal Capitol Hill target in Dis
tr1ct revenue matters.
City officials have contended
the present tax rate is high
enough, and imposes a higher
burden than taxes do in compet-
ing suburban areas.
So Pct. of City Tax Exempt.
More than So per cent of the
DISTRICTS area-excluding streets
and alleyS-already is exempt |
from tax rolls. and a tax office
check yesterday disclosed that
about SIS applications for further
exemptions now are pending.
Forty OF the applications ask for
removal of church property from
the tax rolls. The others include
requests from foreign govern
ments, charitable groups and
schools.
Another check showed that
during the last four years the
District has lost $26,465 in taxes
through the exemption of Fed
eral property, $15.638 through
exemption of District property
and $499,111 through other ex-
emptions.
Beyond this. however, officials
caution that the real estate tax
is the only major revenue source
the Commissioners may regulate
in the event of a sudden emer-
gency. If this power is removed,
they warn. the fiscal program
would be left with virtually no
fexibility at all.
Three Catholic Luymen
PIT m NnfinnnI Groun