Evening Star Newspaper, November 24, 1935, Page 4

TAX STUDY REPORT 1S DUE WEDNESDAY Committee to Seek Greater U. S. Share With Any In- creased Levy Plan. Convinced of the need of greatly in- creased funds yearly for permanent improvement, the Commissioners’ Tax Committee will meet Tuesday to seek solution to District financial prob- lems, with indications any proposals for tax increases will be coupled with recommendations for a boost in the Federal payment. Commissioner Hazen promised yes- terday a public hearing would be granted after the committee’s report 1s received and before the Commis- sioners adopt any new program. The committee findings are expected to be placed before the Commissioners ‘Wednesday. . The committee has before it a mass of data on total District revenues, the downward trend in recent years of the Federal lump sum payment, and a corresponding downward trend in funds available for Capital outlay such as school buildings, libraries and other permanent investments. 5 All Members Not Agreed, Cursory study of these figures in- dicated to some officials the District would need in future years some $7,000,000 more in revenues. This was on the assumption that the Dis- trict’s outlay for improvements should be doubled, and on the assumption revenues from present sources would fncrease only normally. It was disclosed last night, however, | not all members of the committee | are yet convinced the increased reve- nue needs will amount to as much as | $7,000,000, year by year. While officials were considering their prcblems the Washington Tax- payers’ Protective Association yester- day turned its guns on suggestions for millions in new taxes. Charging that Washington has a “very expensive municipal govern- ment,” the association, through its secretary, Rufus S. Lusk, declared “one reason for the high cost of our government is the tremendous staff it maintains and the high salaries paid.” Lusk declared the contemplated new taxes would boost the per capita tax o? Washington to an all-time high level. The Tax Comumittee is headed by Corporation Counsel E. Barrett Pret- tyman. Other members are Maj. Daniel J. Donovan, auditor; William P. Richards, assessor; Richmond B. Keech of the Utilities Commission, Willlam A. Roberts, people’s counsel, and Capt. H. C. Whitehurst, director of highway Some District officials, 1t was dearned, are impressed by a new align- ment of comparisons of the trends in recent years of four main elements in the situation. These are: Federal payment, the amounts for capital 1m- provements, the unappropriated sur- plus and the total size of the budget. From 1925 through 1930 the Fed- eral payment was $9,000,000. The next two years it was $9,500,000. ‘Thereafter the record reveals how Congress wielded the knife on amounts it appropriated toward sharing Dis- trict costs. The figure was cut to $7,775,000 in 1932; and then in suc- cessive years to $5,700,000. ‘The outlay permitted by Congress for permanent improvements reached its peak in 1931, with a figure of $16,- 040,378. Officials observed that that was the year when the Federal pay- ment was $9,500,000. The next year the figure was $14,189,102, and then dropped in 1933 to $8,831,194, then to $4,037,881, to $5,513,071, and to $5,- 582,591 in 1934, 1935 and 1936. This £mall outlay for the last three years 15 a major concern of the tax com- Imittee. % Large Surpluses Built Up. 7 As to surplus the committee recalls that in the six years ending with 1930 the District had built up com- iparatively large sums, which Congress had uot allowed to be spent for im- | procvements. At that time, however, Ahe committee record shows Congress | Jaunched the District on a program of building an immensely costly new fmunicipal center, and appropriated | +$3,000,000 in 1930 and 1931 for the Jsite purchase. Other sums were added later. The process of consuming the Dis- trict’s annual surplus proceeded rap- 1dly, a member of the committee ob- served, and at the end of the fiscal | year 1933, the District wound up | Wwith a deficit of $62,742. Beginning with 1934 fiscal year figure for the end of 1934 was $4,646,495. At the end of 1935 it was $5,148,349. And it is estimated there will be a surplus of $3,175,922 at the end of this fiscal year, 1936. Rebuilding of surplus funds in 1934 and 1935 is attributed largely to the economy salary cuts and small out- lays for improvements. Mr. Lusk will appear before the Budget Bureau tomorrow to state the views of the Taxpayers' Association on the proposed $47,000,000 budget for the next fiscal year. He said in his statement last night: “The contemplated new taxes pro- posed by a committee of District of- ficials would boost the per capita tax of Washington to its all-time high. It would be over $75 per capita assum- ing that the population is 550,000, an ample estimate. This local tax bur- den, plus the federal income and other federal concealed taxes would mean that everybody in Washington may look in 1937 to having easily 25 per cent of his income extracted by the tax collector. This would be greater than the proportioh paid by the Britisher, who is supposed to be the most heavily taxed individual in the world “It is unfortunate that District of- ficials, largely as the result of the activities of pressure groups, have had to devote so much time to devising new ways of raising more money and increasing taxes rather than studying methods of saving that might prevent such tax increases. “The Taxpayers’ Association clearly understands that the alleged neces- sity for these mew levies is not due so much to the desire of most Dis- trict officials to increase and expand their activities as it is to the per- sistence of starry-eyed uplifters, al= ways seeking to do good with other people’s money, and spending it for everything from a housing program In the name of alley clearance in 200 squares in the city to providing a country club in the hills of Virginia for chronic drunks. The height of the District again began to accumu- | late an unappropriated surplus—the | Heavily Failure to Meet Urgent Needs Is Alternative. Citizens Preparing to Appeal to Pres- ident, Congress. The local civic forces are being marshaled for the annual plea to| Congress for its more equitable partici- pation in the financing of the Na- tional Capital, Today's situation is practically the same as when the pe- tition of the Citizens' Joint Com- mittee on Fiscal Relations between THE SUNDAY STAR, WASHINGTON, D. U, NOVEMBER %4, 19355—PART ONE, Increased Taxation for the Dis Petition by the Citizens’ Joint Committee on Fiscal Relations Between the United States and the District of Columbia. Petition to the Congress of the United States directing attention to the District of Columbia appropriation bill (H. R. 3973) for the fiscal year 1936 now pending before the Congress and urging that while the lump-sum payment plan of National contribution toward Capital upbuilding continues as the an- nual exceptional appropriation practice, temporarily substi- tuted by the Congress for the sixty-forty definite proportionate contribution plan provided by the unrepealed substantive law .of 1922, the amount of this lump-sum paymeny shall be largely increased; also urging rejection of H. R. 4245, To the Congress of the United States: Your petitioners, the Citizens’ Joint Committee on. Fiscal Re- lations between the United States and the Distric of Columbia and the presiden‘s and other representatives of its constituent and co-operating organizations, whose names are subscribed below, re- spectfully represent: The platform of principles laid down by the joint committee and adhered to in the committee’s brief in the hearings before the the United States and the District of [joint select committee in 1915, the House District Committee in Columbia was signed last Winter. That petition bore the signatures of the presidents of the Board of Trade, Fed- eration of Citizens’ Associations, Cen- tral Labor Union, Merchants and Manufacturers’ Association, D. C. Fed- eration of Women's Clubs, Voteless D. C. League of Women Voters, Bar Association, D. C. Bankers’ Association, Washington Real Estate Board, Asso- ciation of Oldest Inhabitants, Society of Natives of the District. Rotary Club, Kiwanis Club and the 'Northeast Washington Citizens’ Association. In the regular rotation in office John Saul has succeeded Mr. Fleming in the Board of Trade; Thomas E. Lodge succeeded Mr. Yaden of the Federa- tion of Citizens’ Associations, Mrs. Lloyd W. Biddle succeeded Mrs. Wiley 'of the Federation of Women’s Clubs, | Mrs. william Kittle succeeded Mrs. | Hogue of the Voteless D. C. League iof Women Voters, Charles H. Doing | succeeded Mr. Siddons of the Bankers’ § Association, Elliot Middleton succeeded | Mr. Doyle of the Washington Real Es- |tate Board and Fred A. Emery suc- | ceeded Mr. Burroughs of the Society |of Natives. While these changes in the offices of president have occurred since the petition was signed, there | has been no change in the attitude |of any of the organizations support- | ing the petition. | This petition, supported by logical | argument, lays down as fundamental ithe necessity of the Federal Govern- ment adopting a definite policy as to |its payments to the District budget. It is held that the amount should be equitable and bear a proper relation to the interest of the United States in its Capital City. It is the com- posite opinion of civic and business Washington, as expressed in the peti- ition. that it is very essential to intelli- | gent and efficient budget making that the beginning be made with the known | proportion which each of the partners, in the enterprise of Capital mainte- | nance and upbuilding, will contribute. Therefore the Citizens’ Joint Com- mittee has since its organization in {1915 contended for the fixed definite fpmportion method of payment by each |of the parties. This contention was | for & continuance of the half-and-half method of the law of 1878 until that was superseded by the 60-40 law of | 1922. | The committee continues to hold to | | the opinion that the definite fixed proportion method is the most equita- | ble because’ of its flexibility and also | because of its equal protection to both parties, It is regarded as of special value to the District, which is the i weak and _impotent partner who really needs the protection. The United States, as the all-powerful partner who levies the taxes, holds the money and completely controls its appropriation and disbursement, really needs no protection, but a definite rate of participation would be a very helpful aid in budget making from the national Govern- ment angle. The Citizens’ Joint Commitige re- gards as baseless the theory that District taxpayers are not bearing an adequate tax burden. The petitioners contend that the District taxpayers are now reasonably and, in view of their peculiar disabilities, even heav- ily taxed, and that no increase in their tax burden should be considered unless it is clearly demonstrated that such additional taxation is absolutely necessary to meet urgent municipal needs which cannot otherwise be sat- isfled. The citizens claim that these needs should be met by increase of the lump sum and not by increased taxation. Such increase of the Fed- eral lump-sum payment is considered as the first step which should be taken toward balancing the District's budget. Last Winter and at the present time the Joint Committee is putting par- ticular stress on the necessity of substantially increasing the lump sum, if that method is to be continued, in- stead of the 60-40 requirement of un- repealed substantive law. The com- mittee, while not deserting its sound position on the definite fixed pro- portionate plan, recognizes that under the existing conditions on Capitol Hill there is little hope that the lump- sum method will be abandoned. Since the introduction of the lump- sum method the cost of running the District has continued to grow and the lump sum, which attained a maxi- mum in 1931 of $9,500,000, has now shrunk to $5,700,000, which repre- sents a very small percentage of the total required. The results are shown in an accumulation of unmet needs for Capital expenditures which threaten future heavy tax burdens or a continued lowering of the standards of municipal maintenance. As the District's petition sets forth so clearly the attitude and the de- sires of the local residents and tax- payers, it is again reprinted, with the accompanylng argument, in full as to @& substantial increase of the lump sum and & brief synopsis of the December, 1919, and the Senate Appropriations Committee in April, 1920, is as follows: We contend, first, that the United States should contribute largely to the expenses of the District; second, that this contribu- tion sfiould be a fixed and definite Proporuon; third, that this pro- portion should be at least one-half. This platform was modified by the District’s new organic act of 1922, which re-affirmed the principle of definite proportionate contribution by local community and Nation toward Capital up- building, but changed the fifty-fifty ratio to sixty-forty, imposing the sixty per cent burden upon the local taxpayer. The committee’s platform of principles, thus modified, was announced by the Executive Committee of the Citizens’ Joint Com- mittee October 31, 1923, as follows: We contend, first, that the United States should contribute largely to the maintenance and upbuilding of the National Capital; second, that this contribution should be a fixed and definite pro- ortion; third, that this proportion should be sixty-forty—sixty gy the District taxpayers and forty by the United States. ‘While Congress has refused all propositions to amend the defi- nite proportionate contribution provision of the law of 1922, and while the sixty-forty provision is the existing substantive law, Congress in 1924 provided as a temporary provision on the annual THEODORE W. NOYES, Chairman Executive Committee, Citizens’ Joint Comamittee on District of Coluntbia Fiscal Relations. appropriation act for the fiscal year 1925 a lump-sum payment contrlguuon in lieu of the forty per cent conmguuon i’;rmded by substa.ndve law, and has renewed this exception to the pro- :}?;gndsa get substantive law in each annual appropriation act since The Citizens’ Joint Committee urges rejection of H. R. 4245 and a return in appropriation practice to the sixty-forty definite pro- }):’rt::: :g:::::i:goz, 1?:!:“1' a.:hprovlded bytexisfing substantive law, n e argumen! X "I? ORI :fi% Pfi:l“fllh l g appended to and made . R. and several bills increasing the tax burden e District and a cutting down or ellmlnaniongol the annual lumg!e:‘lhm payment have been proposed on the theory that District taxpayers are not bearing an adequate tax burden. The Citizens’ Joint Com- mittee contends that the District taxpayers are now reasonably, and, in view of their Eeculiar disabilities, even heavily, taxed, and that no increase of their tax burden should be considered unless it is clearly demonstrated that such additional taxation is abso- lutely necessary to meet urgent municipal needs which cannot otherwise be satisfied. At congressional hearings, especially those on the District of Columbia appropriations bill (H. R. 3973) for the fiscal year 1936, now pending before Congress, and that on H. R. 4245, the committee will ask the privilege of submitting the facts and reasoning upon which is based its contention that the District is not undertaxed. Your petitioners further respectfully represent that as long as a lump-sum payment is the appropriation practice temporarily on annual appropriation acts immediate correction should Ee ma!e f some of its grosser and more obvious injustices. To prevent glaring inequity, your petitioners therefore urge, for reasons stated in the argument hereto attached as part of this petition, that Congress should (1) make a substantial increase in the basic lump-sum payment by the United States in the pend- ing 1936 supply bill for the District of Columbia; (2) that great national or semi-nationa! projects be excluded from the District bill and financed through some supply bill other than the District supply bill, so wording the items thus excluded as to set forth the exact methods of financing in relation to the amounts of contribu- tion by Nation and Capital that is thought to be just, or (3) pro- vide for a local as well as a National maximum of contribution, on the assumption that it is the impotent partner (the District of Co- lumbla} who alone needs this protection, or (4) by referendum or olhe_rwnse the local taxpayers be permitted to have some effective say in regard to the amount of local taxes and the purposes for' which the tax money is to be expended. o S EDWARD F. COLLADAY, Chairman Cnhenst Joint Committee on Fiscal Relations an Yice Chairman of its Executive ROBERT V. FLEMING, President Washington Board of Trade. JOHN LOCHER, President Central Labor Union. _ Lua Kot G, ANNA KELTON ct of Columbi ’ / . WINSHIP WHEATL WILEY, President Federation of Women's Clubs. @%7. COLLIFLOWER, PyAideht Merchants and Manufacturers’ CAROLINE HOGUE, President Voteless D. C. League of Women Voters. , President D.C. Bar Association. F. P. H. SIDDONS, President Disjuict of Columbia Bankers’ Association. e CHESTER D. SWOP! President Rotary Club. EVAN H. TUCKER, President Northeast Washington Citizens' Association. Washington Real Estate Board. _Jetarelr W Warel, HAROLD N. MARSH, President Kiwanis Club. L. A. CARRUTHERS, Chairman Committee on Fiscal Relations, Federation of Citizens' Associations. EDWARD F. COLLADAY, Chairman / Committee on District Finance, Board of Trade. _ Jhu THEODORE W. NOYES, President Association ef Oldest Inhabitants NRY HARDL iety of Nati BURROUGHS, Pi ?@Z/ Some of the Reasons Demanding an Increased Lump Sum While This System Remains Temporary Appropriation Practice We of Washington urge: 1. That existing substantive law authorizes in- crease of the $5700,000 lump-sum payment up to an amount equal to 40 per cent of the total sum carried by the 1936 estimates pending before the Bureau of the Budget if the President wishes to recommend 1t. 2. That the amount of the annual lump-sum pay- ment should be increased in some roughly approximate relation to the increase of the District budget. If Jjustice requires the Nation to con- tribute so much when the District's annual budget is so much, the same justice requires it to contribute more when the District budget is doubled. The practical suggestion is that the amount of the fixed payment should be readjusted if there is any notable increase in the National Capital's an- nual expenditure. An immediate in- crease of the basic lump-sum appro- priation of $5,700,000, for example, would be in just relation to the in- creased estimates proposed by the‘ Commissioners to care for the mini- mum improvements and maintenance funds required by the Capital. In transmitting to the Congress the estimates for the District for the fiscal year 1934 the President in- cluded in his special message the rec- ommendation from the director of the Bureau of the Budget to reduce the national contribution to $5,700,000, the director of the bureau explaining in this connection: “The estimate of appropriations for 1934 for the Federal contribution to the District of Columbia herewith sub- mitted is $5,700,000, which is a reduc- tlon of approximately 26.8 per cent Irom the Federal contribution for 1933 of $7,775,000. This reduction is ap- proximately the same percentage of reduction which the total of the esti- mates herewtih, both annual and per- manent, for 1934 ($32,999,700) bear to the total of the same appropriations for 1933 ($45,122,622)." It is contended by your petitioners that in reducing the.Federal contri- bution by the same proportion that the estimates for the District had been reduced the Bureau of the Budget established precedent which likewise should be followed when the total of these estimates is increased. The total estimates submitted by the Commis~ sioners for the fiscal year 1936 have ove the spprepritions fur which, in substance, were those n& ommended by the President through the Bureau of the Budget. Increase Specifically Lump Sum. should be increased specifically in proportion to national projects in- gluded in the District appropriation i1 Whether or not there is a general readjustment of the lump-sum con- tribution, there should be specific in- creases in that sum representing in each year the placing in the District budget of primarily national projects which it is conceded should be paid for wholly or in part from the na- tional Treasury, but which by inclu- sion in the District bill and under the lump-sum payment plan as prac- tically applied are paid solely by the | District taxpayers from current taxes. The. past Congress authorized the Public Works Administration to lend 10,750,000 for the execution of certain projects which are specified in the act. Funds have been advanced or tentatively allotted to the extent of 185,500,000, but participation by the United States in .epayment of 70 per cent of the money borrowed is specifi- cally prevented by the requirement that “10 cents of the tax levied and collected upon each $100 of the as- sessed valuation of all real and tan- gible personal property subject to tax- ation in the District of Columbia shall be deposited in the Treasury of the United States to the credit of a spe- cial account for such reimbursement to the Federal Emergency Administra- available for any other purpose.” While the projects, as, for instance, the sewage-disposal plant, are distinct- ly semi-national in purpose and scope, serving both the local community and the United States Government, the repayment of the loan is placed en- tirely upon. the local community. There are several other national or semi-national projects which, as a result of appropriations on the District bill to finance them with an inflexible lump-sum national contribution, have been in effect paid for solely by Dis- trict taxpayers. Included in this list ‘the appropriation of the accumu- : surplus of local taxes, without 3. The amount of annual payment | | plete the parkway connection between | and subsequent appropriations, and Potomac and Rock Creek Parks. An- | additional amounts appropriated and other threat of imposing an expendi- | expended for the preparation of plans, upon the etc. local taxpayers is found in uhe com- |exhausted, and with demands on cur- pulsory substitution of the new |rent revenues for other needs already Municipal Center for the present Dis- | exceeding revenue availability, the trict Building. This substitution is project has been indefinitely halted made in order that the municipal | through failure by the Uniled States buildings may harmonize in magmfi-[to continue its own plan of develop- cence with the new national public ment on the magnificent scale pro- structures and involves a total esti- | posed with the understanding of na- mated expenditure of over 22 millions | tional participation in its financing. of dollars. It is submitted that this Exclude National Projects. excess of expenditure on the Nation's| 4 y¢ the lump-sum payment can- city over that necessarily expendedi not be equitably increased to provide Lor Basimilar purpose in the COMPAI- | for suitable national participation in reial city cannot -na- in equity be exacted to the extent of | fusucing hete sSoal & o | ture equitably national But with local revenue surpluses | to the District of Columbia a total of | tion of Public Works and shall net be | posed three-fourths or more from the tax- payers of the District. When the District Commissioners were advised some years ago that the present Municipal Building would be needed by the Federal Government in connection with its building program, and, after a proposed enlargement, for with the Federal building program, the Commissioners sought, in 1929, per- mission from Congress to purchase two squares of land as the site for a new group of municipal structures. The total cost of the land and the build- ings to be erected thereon was esti~ mated to be $12,000,000. At that time there had been accumulated in the Treasury to the credit of the District surplus, or unexpended, local revenues amounting to $6,500,000, and influ- ential members of Congress had pro- the purchase of the Municipal Building by the United States (H. R. 7878—71st Congress, Second Session) at a cost to be determined by a board, and which was tentatively estiniated at $5,000,000. Congress did not approve the plan submitted by the Commissioners, and took the responsibility of amending their bill to include the purchase of additional land to accommodate build- ings conforming in scale and grandeur to the new Federal buildings, and rais- ing the estimated cost of the new proj- ect to $22,000,000 or more. By joint resolution of Congress approved June 15, 1929, $3,000,000 was appropriated for purchase of thesite, and an addi- tional $3,000,000>appropriated in the 1931 supply bill fof the District. All of the land has béen acquired at a cost in excess of $6,000,000 through these local use, of the present Municipal | Building nad been declared in conflict | | tional projects, then the President is | asked to recommend through the Ku- reau of the Budget that these appro- priations be excluded from the Dis- trict bill, where their inclusion results in obvious inequity, and to propose their financing in some other suppiy bill, where the sharing of the expense, which the law or equity demands, can be specifically provided. 5. And, finally, some recommenda- tion to the Congress by the President is asked toward limiting the appro- |. priations of District money by Con- gress (the District's Legislature, in which it is not represented) in the same way that Capital expenditures of national tax money are limited under the lump-sum payment plan. When the appropriations of local and national tax money for the Capital were by law and in practice in definite percentage relation this limitation automatically resulted, and this check upon the appropriation of Distriet tax money, unless accompanied by a re- lated expenditure of national tax money, was the main benefit derived by the District from the definite pro- portionate contribution plan. When for the latter plan, at the instance of the House Appropriations Committee, the lump-sum payment plan was tentatively substituted it was suggested that loss of this limi- tation upon District expenditures and taxation would be cured by permitting the Distirct to participate so effective- 1y in the raising and expenditure of its tax money that it could be extrava- gant or economical, as it pleased. But, in fact, the District has no more to say about its taxation and the ex- penditure of its z;u mu::cr “;:en mm sum t pl of me':nnpmorflmh contribution. A And under the inflexible lump-sum payment plan Congress limits itself concerning expenditures on the Na- tion’s City of tax money contributed by the Natlon, which it represents, but removes the limit upon the raising and expenditure of the tax money by | the District, which it does not repre- | sent and to which it is not at all responsible. Afd as a result we have appropriations from the District tax money abnormally swelling to meet whole-cost expenditures on national and semi-national projects. ‘To prevent injustice, the President is asked either (1) to recommend a substantial increase in the basic lump- sum payment in the pending 1936 es- timates for the District, and (2) to propose the exclusion of great national or semi-national projects from the District bill and their financing on some other supply bill, so wording the items thus excluded as to set forth the exact method of financing in re- lation to the amounts of contribution by Nation and Capital that is thought to be just, or (3) propose to Congrass the provision of a local as well as a national maximum of contribution, or (4) recommend to the Congress that, by referendum or otherwise, the local taxpayers be permitted to have some | effective say in regard to the amount of loca] taxes and the purposes for which tHe tax money is to be ex- pended. The President is respectfully urged to give consideration to the fact that of the raising and spending of all Capital revenue, including the District tax money, the United States is the primary and the District only the in- cidental contributor, and not vice versa, as the present lump-sum pay- ment plan seems to assume. District Only Incidental Contributor. Protection was afforded the local | taxpayer under the 1878 law not only by the provision that the Nation would contribute 50 per cent of the total appropriation, but also by the assur- ance that the local taxpayers would not be compelled to contribute more than 50 per cent of the total. So in the law of 1922 the effect of the statute was to pledge the local tax- ,lpayern that not more than 60 per cent of the total tax would be exacted from them. When the lump-sum pay- ment plan was substituted tentatively for the 60-40 ratio this pledge was suspended, but it was suggested that an effective substitute for this pledge was found in the declared determina- | tion of Congress under the lump-sum payment plan to give the local tax- payers a certain control over their own tax raising and tax spending, in- volving the power to be extravagant or economical, and to spend as much or | little of their own tax money as tney pleased. But Congress in fact limited its power to expend national tax | money, and left undetermined the amount of local tax méhey that it | could expend. And it has exercised | this power without regard to the | wishes of the taxpayers to raise and | spend local taxes not only for strictly | municipal purposes, but for semi- national and primarily national { projects. | It is to correct this condition that | we, representing Washington, now urge | the President, in considering the Dis- trict budget, to recommend increase of the Nation's lump-sum contribution Abandonment of L Note.—The petition as presented to Congress last Winter included an ex- tended argument in support of a res- toration of the definite proportion method of dividing the support of the National Capital. While the Joint Committee continues its support of that as the only logical and equitable | method yet devised, that is not the {issue at the present time. Therefore this argument is here produced in a much condensed form. 1. The lump-sum payment practice destroys all relation between the na- tional and local contributions and, leaving all taxing power in the hands of the United Stafes, deprives the un- represented Capital of its safeguard against excessive taxation by a taxing | body in which it is not represented. Under the lump-sum payment prac- tice additional dollars of tax exacted from the District no longer increase, | but correspondingly reduce the na- tional contribution, actually or rela. tively. Teaches a False Theory. 2. Tt teaches a false theory concern- ing the relation of Nation to Capital It obtrudes annually upon the at- | tention of Congress the suggestion of a large cash donation to the Capital, |as if the primary obligation of Na- | tional City upbuilding were upon the | local taxpayers and the Nation were | only an incidental contributor, a vol- | untary and benevolent donor. * ¥ X X Is not the superlative inconsistency, the climax of topsy-turvydom attained by a financing plan which places a limit upon the amount of his own money which may be spent by the omnipotent national partner, with ex- ‘elnlive power of legislation and ap- | propriation in his hands, and removes all limit from the amount which the national partner may exact for Capi- | tal upbuilding from the impotent local partner, the District taxpayers? Pro- tection against himself for the power- ful partner, who needs no protection! A denial of protection for the weak partner, who is absolutely helpless and | impotent and who desperately needs to be protected. 3. It taints with unfairness or bad faith mnearly every understanding or transaction which it touches. Unlawful Offspring of Holman Rule. (a) It came into existence as a rider on an appropriation bill in defiance of substantiative law under a strained construction of the Holman rule, * %k Xk X The rule thus misconstrued and misapplied, while barring equitable increases in appropriation, facilitates the denial or evasion of legal indebt- edness; it invites violation, with good or bad motive, of existing substantive law, and it tempts to repudiation of just debt. Unfairness in Respect to Surplus. (b) In appropriating for National Capital purposes the District’s five millions surplus (accumulated during the war years by failure of Congress to appropriate for Capital needs) it robbed this fine action by Congress of much of its merit. * % * % Taints With Unfairness Expenditures for Parks. (¢) The lump-sum payment experl- ment, as practically applied, converted the Park Commission law from s since the Nation is in exclusive control | trict Threatened [ (as lcng as Congress co, lump-sum practice) or mng:):?ufl:: Congress’ that the local taxpayers be given an effective voice in deciding how much they will raise in taxes and how they will spend the taxes when | raised, ‘or to suggest restricting the | kind and amount of appropriations on the District appropriations bill, witn ‘the result of limiting arbitrarily the | amount of the local contribution | toward Capital upbuilding on the same | lines as under the lump-sum payment plan the national contribution 1s limited. Wise limitation upon the local tax- payers’ contribution toward the main tenance and development of the Na- tion’s City could be made effective by relating it (1) to the total appropria- tion in each year in the District ap- | propriation act, as in 1878 in the 50. | 50 ratio and in 1922 in the 60-40 ratio, or (2) by relating it to the District's contribution in each year in national (internal revenue) taxes Return District’s Internal Revenue. Since the District paid in such taxes in the fiscal year 1933 $8,464,108.56, | more absolutely than over one-haif of | the States, more than 10 of the States combined, and more per capita than | all of the States except seven, and re- | celves in return no representation in the House, though the Constitution couples inseparably Representatives and direct national taxes, the last- named suggestion seems equitable. In fairness in this connecticn it should | also be considered that the Nation has heretofore not only denied national representation to the national tax- ;pay;ng District, but has also until very | recently excluded the District in dis- | tributing hundreds of millions of dc’= |lars in bounties and subsidies to the | States. It is also to be remembered | that the national taxes paid by resi- | dents of the District in contributions | to the customs revenues of the Nation will still remain in the Treasury for | national uses. By this procedure the Nation would contribute to the Na- tional Capital municipal maintenance and upbuilding no dollar that had not been paid in national taxes by the people of the District themselves, It could not reasonably be protested that such repayment of its own money should not be made to the D! since already in national b subsidies to the States (in which the District has not heretofore been per- mitted to participate) several States have received even more from the Na- tional Treasury in the shape of such bounties and subsidies than they have paid into the Treasury in national internal revenue taxes. If the Nation can thus make subsidy payments to | even a few of the States of more than these States pay in national taxes, surely there could be no reasonable objection to a return to the District of this part of its contribution of na- tional taxes, the Nation retaining in the Treasury the contributions of Dis- trict residerts to customs revenues. Political equity and financial equity for the District have always been in- separably interwoven. The people ot the District urgently petition for both equities. In the New Deal era of America no other Americans need a new deal more distinctly than the un- Americanized Americans of the Dis trict. Give us, then (we petition), a New Deal. ump-Sum Plan And Restoring of Definite Proportion | benefit and blessing to the National | Capital community into a threat of injury. On its face the National Capital Park and Planning Commission law is broadly national. The terms of the law suggest the patriotic interest in it to the extent of a cent a year contri- bution of every man, woman and child in the Republic. The title to all the land purchased by the Park Commis- sion is vested in the United States. * 1t has converted a fine, wise, broadly national project, which the self-de- ceived District enthusiastically in- dorsed, into an unjust increase of the local taxpayers' tax burden, against which the District taxpayer has vig- srously protested. Ak Paralyzes Permanent Improvements. (d) It paralyzes all great and costly permanent improvements®nd all loans for such improvements by creating in the community a reasonable doubt | whether the national partner in financing the improvements and re- paying the loans will not exact every cent of payments for primarily na- tional or semi-national projects from the impotent local partner, the Dis- trict taxpayers. (e) It tai with bad faith and hurtfol injustice the District's new organic act of 1922. RN Unjust and Hurtful Discrimination. The District has been compelled to | carry out faithfully all the provisions | of the five-year program that mean loss and injury to it; but in appropri- ating for the fiscal year 1925 Congress | nullified for that year the 60-40 pro- | vision of the law of 1922 (the only | pledge in the compromise distinctly | beneficial to the District) by attach- |ing to that bill the vicious and de- | moralizing lump-sum payment rider. ‘The all-powerful national partner. has in each of the fiscal years since | that of 1925 repeated this unjustly and discreditably discriminating ex- action from the impotent local part- ner. When Congress ceases to enact this annual exception to the law of 1922 the 60-40 rates directed by that law will automatically operate and the promised era of peace and good will | and good faith will be enjoyed. | * ok ok ok No Offsetting Benefits for Injuries. 4. There are no offsetting benefits {to the injuries inflicted by the lump- | sum payment practice. All the pre- dictions of evil concerning it have been 100 per cent fulfilled. Not one of the benefits promised for it has been enjoyed. * ¥ ¥ % Authorized by substantive law to collect only 60 per cent of District appropriations from the local taxpay= ers, it is now collecting (In the cure rent fiscal year) approximately 83 | per cent of total appropriation. A The prophets of evil were the tru prophets. o The maximum national contribti~ tion is made definite during the time in which Congress refrains from di- minishing it; but all limits are des clared off in respect to the local con= tribution, and it remains definite only in the demonstrated certainty that the local tax burden will be largely gnd steadily increased, and that the local taxpayers will not par- ticipate at any time in the decision of the amount of the increase, the methods of taxation by which the . increase is secured and the purpose for which the tax money is spent. v ¢ [ [}