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$1, 412 1. 31
1,17% 1, IS 1, 138 1, 123
$606, 711,000 2, 519, 229,000
755, 436.000 1,074, 744,000
338, 582, 000 1,035, 137, 000
429, 760 1,931, 334
587, 472 859, 100 282, 349 878, 336
816,048 1, 623, 452
634, 536 399, 178 380, 972 319. 077 304,087 302, 288 244, 791 322, 412 302, 163 305, 394
Average assessment per capita.
Mr. Dent. If you get into the question of tax rates, the tax rates are very hard to compare. As you know, lots of cities have homestead exemptions, that is, there is no real-estate tax on properties having a valuation of $5,000 or under.
Mr. BATEs. That applies pretty much to the States south of us; does it not?
Mr. DENT. Mostly the Southern States.
Mr. BATEs. In fact, that is a recent development within the last 10 years in order to lighten the tax load on local residents and then expect Uncle Sam to pay the bill to carry them.
Mr. DENT. Insofar as valuation is concerned, I think it is significant that the District of Columbia has the highest assessed valuation, and the highest valuation, based on this ratio that they gave, and the only real measure of comparison is just what tax does the individual pay for a similar place; forgetting valuations, forgetting tax rates, what does the man in another city pay for a house that is identical with that same house in the District of Columbia.
Well, now, of course, that is a very difficult thing to determine from other cities, but I have made that comparison with the adjoining counties, that is close to home, and I have sent out my assessors, and because of their familiarity with our problem in the District—two of them live out in the adjoining counties—we picked out houses that were, we thought, identical, as far as you can determine identity, and we found out exactly what tax they pay, forgetting valuation and forgetting tax rate.
We find that in Arlington County comparable properties, and we took the three categories of residences, apartment houses, and business properties—Arlington County was somewhat lower, considerably lower, I would say, than the District.
Montgomery County was slightly lower; Prince Georges County was slightly lower on taxes.
We tried to get away from valuation; we tried to get away from tax rate and find out just what the real-estate tax was on a house, on the same kind of a house in the District of Columbia, and we found that our taxes were higher than the surrounding counties of Montgomery, Prince Georges, and Arlington.
Mr. Smith. Let me ask you right there, that was based upon the existing, the prior existing assessment in Arlington County. They just had a new assessment.
Mr. DENT. We used the new assessment.
Mr. DENT. It is still a little lower. Over in Arlington County they
Mr. Dent. Montgomery County has a $2.62 rate; they are supposed to be a hundred percent valuation. Now compare the rate of $2.62 with the $1.75 in the District, and they are theoretically on a hundred percent valuation, the same as we are theoretically on a hundred percent valuation, yet the tax, the resulting tax, is higher in the District.
Now, that is the only way, Mr. Bates, that I know of that you can compare tax rates and valuation.
Mr. BATEs. Mr. Dent, you and I both know there are many intangibles connected with the question of values that it is almostMr. DENT. It is just a man's judgment.
Mr. Bates. It is scientifically impossible to arrive at a proper solution, but, in the final analysis, the assessment has to bear its relation to what that fair value is and the only way you can determine that is where
you have a free seller and a free buyer, and that is the basis of your computation here, which is the best kind of a test that you could show this committee.
That being so, on residential property here, if this is typical of all the others, your residential property here is assessed for around 63 percent of its present value. Mr. DENT. Present.
Mr. BATEs. Value to the revalue assessment; that is the new value you are going to put on. Mr. Dent. That is at present day selling prices.
Mr. Bates. That is right. So, that you have flexibility. I am not finding any fault with that, because it is exactly what I did over the period of a good many years when I had the same subject matter in hand, that you must allow that flexibility of assessment to take up the period when a depression or a deflated period comes in; but the facts are today that your assessment is about on a 63 percent basis on resi
Mr. DENT. That is true. I would like to say this: That if you take these old properties, Mr. Bates, and I will take this neighborhood right east of the Capitol, houses that are 50, 60, and 70 years old, those houses have been selling for more than they could be reproduced on the present market.
I think that is—for instance, houses that have sold for a long period of time for five thousand dollars or fifty-five hundred dollars, havet been selling for eleven and twelve thousand dollars, and that, to me is ridiculous because it was simply caused by the necessity of buying housing and not buying real estate.
Another thing, I think that we have got to bear in mind in the District, and the thing that worries me quite a little, and that is the fact that the amount of available land in the District of Columbia is very, very small. What is left is topographically rough, and consequently, when this building program starts, which we all know it will some day, I think that the majority of building is going to be in the metropolitan areas. There is very little land left in the District to build upon now. The result of that, as far as residential properties are concerned, is that they are getting older and older, and because of depreciation and obsolescence, the original city is becoming more blighted all the time. It is one of the reasons for the establishment of the redevelopment agency, so that in the future residential propertie in the District, in my opinion, have got to be on a downward trend, because persons are going to move out of these old houses when new houses become available, and they are going to buy in the metropolitan area, and I think we have got to be very careful in imposing taxes on the people in the District that will have a tendency for them to move outside of the District.
Now, I have any number of inquiries that have come to my office through the mails of persons who contemplate the purchase of homes and they are asking just what taxes they have to pay in the District of Columbia so they can compare those taxes with what they will have to pay in Maryland and Virginia.
Now, if you ride through the District of Columbia, and I certainly am not trying to sell the District short, because I have lived here all my life, but these older houses are becoming older all the time, they are becoming obsolete, and persons are going to move from those houses into newer homes, and the newer homes are going to be available in Maryland and Virginia, if you please, and very few in the District of Columbia.
Mr. Bates. To get away from that question for the moment, I want to reconcile some figures here, Mr. Dent, which you sent to me on this schedule of real-estate assessment, taxable in the United States, District of Columbia, and privately owned, exempted. I just want to reconcile the area of the District with the so-called Overton-O'Mahoney formula.
Inasmuch as we have a bill relative to Federal payments before the committee, which we are not going to go into at the moment, I would like to reconcile these figures because the Overton-O'Mahoney formula is based on a certain area in the District, and it does not check with the area that you give me on your schedule. Have you got an extra copy so that you can show it to Mr. Dent, please?
Mr. Dent, take this copy; it is the total land area of the District of Columbia of 39,000 acres.
Mr. DENT. Yes, that is the total area, Mr. Bates.
Mr: BATES. Now then, on your schedule here, this is a statement of real-estate assessments, practically 31,000 acres.
Mr. DENT. Well, the difference is 8,000 acres in streets and alleys; 19,273 is the total area of the District of Columbia, exclusive of water trea, and the statement I furnished you excludes streets and alleys.
Mr. BATES. But for the purposes of the formula, of course, streets and alleys are thrown in.
Mr. DENT. Yes, sir.
Mr. BATES. I see. And it does not state what percent of those streets and alleys are in the so-called District area and what in the Federal area; it does eliminate the park area of the District of Columbia, and the United States land owned by the District of Columbia.
Mr. DENT. That is the formula that was made up by the gentlemen, I think, that were appointed by the Senate committee.
Mr. BATES. They were appointed by a Senate committee, were they?
Mr. DENT. Yes, sir; we had nothing to do with that formula.
Mr. DENT. I do happen to know they used the entire area of the District of Columbia, and the figure I gave you did not include streets and alleys.
Mr. BATES. All right, Mr. Dent, you can proceed in any way you desire.
Mr. Dent. Well, getting back to the revenues, I will give you some figures on the progress of revenues in the District of Columbia under present legislation, and start from the fiscal year 1940, because that was the first year we had the benefits of the new revenues, income tax, and in 1940 real-estate revenues amounted to $21,400,000.
In the present fiscal year the revenue is $24,430,000. Now, that is based on the actual assessed valuation.
Mr. Bates. That is what it was in 1947? I want to get those in the schedule.
Mr. DENT. We have not completed the fiscal '47; we do not have the total collections.
Mr. Bates. Your last figures is '46? Mr. DENT. I can give you the amount to be collected in ’47; that is $24.430,000.
Mr. BATEs. That is your estimate?
Mr. Dent. That is estimated on the current assessment, but in the budget we carry actual collections, which included not only the current tax, but the payments received for prior years.
Mr. BATEs. Yes. What is your total estimate from real estate for
Mr. BATEs. What is your estimate for '48? Is that from the same source?
Mr. DENT. Well, in the budget, which we made up in September, we carried $27,000,000.
Mr. BATEs. And that is based on the revaluation?
Mr. DENT. No, sir, it is not. As Mr. Fowler explained to you yester Mr. day, we have revised that estimate on account of the revaluations to $28,350,000. Mr. BATEs. All right, go ahead, Mr. Dent.
B Mr. Dent. Now, the first year in income taxMr. BATEs. Let me say at the outset that that showed a change in B 10 years or 11 years from '37, of taxes from realty of $17,489,000 to
D an estimate of $27,000,000 this year; is that right? Mr. Dent. Yes, sir. What was the figure you stated?
B Mr. BATES. $17,489,320; that is 1937. Mr. DENT. $17,167,000 was the original levy, but that was based, Mr. Bates—do not forget, Mr. Bates, in '37 we had a dollar and a half rate, and we went to $1.75 rate in '38.
Mr. BATEs. That is right. But nevertheless, they are taxes from that source.
Mr. DENT. That is true.
Mr. BATES. And you had one increase in the rate, and that increase took place in '38, $1.75, and that rate has remained constant up to the present time.
Mr. DENT. Yes, sir; that is correct.
Mr. Bates. In values, however, it substantially has increased during that period of time.
Mr. DENT. Values increased by $250,000,000 from 1937 to this fiscal year, and our new valuation for 1948 will be $1,578,000,000 against a valuation in 1937 of $1,144,000,000.
Mr. BATES. That is right. Most of that is probably due, of course, according to the information you have already given me to new values. There has been revaluation, but most of that is due to new values.
Mr. DENT. When you speak of new values, you mean new construction.
Mr. BATES. Yes.
Mr. DENT. I would not say most of them, because in this last assessment of '48 we have increased the valuation on existing properties by $182,000,000.
Mr. BATES. I mean up to the present time.
Mr. Dent. Up to the present time, yes; although we have made very substantial increases. We increased business properties several years ago in the central business area about eight or nine million dollars. I think it was. Of course, these figures, Mr. Bates, as I explained to you before, these levies are net levies. I think I furnished you some statements showing that we may put on $50,000,000 in new construction and lost $15,000,000 by Government acquisitions.
Mr. BATEs. That is right.
Mr. DENT. So, you have got to take into consideration that the net figures do not include the losses.
Mr. BATES. That is right.
Now, at this point, you might put into the recorl the ralue. the assessed value, if they are assessable. properties of the Federal Gor ernment in 1937, and the figure of today, showing what has been taken out of taxation.
Mr. DENT. Well, in 1937—you want percentage of area?
Mr. BATEs. Do you have values here, total values of United States property, June 30, 1947, of $649,000,000; is that right?