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heard it, but I do not have it before me, and I think we ought to have it in the record.

Mr. FOWLER. I think somebody else can give that. Mr. Dent, can you give that?

Mr. EDWARD A. DENT (District Tax Assessor). Mr. O'Hara, going back to 1937, the percentage of taxable land was 56.2 percent, and the Federal Government was 35 percent. The District of Columbia had a little over 3 percent, and privately owned exempt property owned by institutions, a little over 5 percent. The past fiscal year the taxable area had dropped from 56.2 percent down to 19.1; Federal Government holdings increased from 35 to 42 percent, and the District of Columbia and institutions remained practically static.

Mr. O'Hara. Now, with relationship to the sources of revenue you have spoken of some of them that you can increase, such as increasing the liquor tax, what is the income from or what do you expect in the way of increase in expense of your highways, maintenance of streets!

Mr. FOWLER. I was speaking on these increases to the general fund, and I expressed the hope that you would let the Director of Highways give you the whole highway information, and the same thing with water.

Mr. O'HARA. There is no recommendation in your budget figures for an increase in gasoline tax, for example, for the purpose of

Mr. FOWLER. Yes, there is 1 cent, and he will give you the full details and the reason for that.

Mr. O'HARA. Yes; there is one further consideration to which the District is peculiar, because it is the National Capital; you have a great many people here, Members of Congress, their staffs, who drive automobiles with their State licenses, and they feel they must drive it that way, which you do not get as revenue from the owners of those vehicles for an automobile tax; that is true, is it not?

Mr. FOWLER. That is true.
Mr. O'HARA. That is all, Mr. Chairman.

Mr. TALLE. Mr. Chairman, I wanted to ask Mr. Fowler if he would mention the principal law enacted by the Congress to which the District government, through its Commissioners, registered protest.

Mr. FOWLER. The principal law to which they registered protest?
Mr. Talle. Yes.
Mr. Fowler. You mean a law that has to do with what principles?
Senator Caix. Increasing your expenses.
Mr. FOWLER. Increasing expenses?
Mr. TALLE. Yes.

Mr. Fowler. I do not know that I could recall any principal law. There have been a number of laws to which they have protested; they prote-ted this matter that 1r. Bates jut referred to, and they have had some protest in reference to certain provisions of the teachers' salary act, certain provisions of the police and fire act; they had other objections to that.

Senator Cain. I would suggest that Mr. Fowler give a little thought to that and prepare a separate memorandum in order to be of assist ance to our thinking here.

Mr. TALLE. I was just about to suggest that. I would like to have a carefully thought-out statement in reply to my question.

Mr. FOWLER. I will be glad to get that.

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Senator Cain. Partly in order that it may help us to be more cautious.

Mr. FOWLER. I would like also to give you a break-down, if you would like to have it, as to what we may be called upon to face in the way of additional burdens, if you would like to have it, and it would be helpful to your thinking.

Senator Cain. All right.

Mr. FOWLER. Right now we say $95,000,000, but that does not mean that this budget is going to be $95,000,000.

Senator Cain. No.

Mr. FOWLER. If the Appropriation Committee should, for instance, adopt in its entirety our recommendation, and that is optimistic, but if they should do it, we would have to ask that they increase, so many of those items because since the preparation of that budget those items have gone way up; building items, and food costs, and everything else, so it would not be a 95 million budget which we have by the time we get to the Appropriations Committee; and there are a great many things that may possibly happen here; there is a retirement bill pending, and a veterans' bill, and you have all sorts of ideas being advanced. That every time I hear them I shiver wondering how we are going to pay so we ought to be prepared to take paying into consideration.

Mr. Bates. That is all the more reason, Mr. Fowler, that we are exploring into these facts which we can develop in the minds of the officials of the District, and in the thoughts of Congress, that we must say “No," once in a while; that is essentially the background we are trying to develop here.

Now, what I would like to have you do also is to provide the increased costs. That applies to the cost of living, and figures on that within the District. I would like to have you prepare, or at least your department heads prepare, the percent increase in wages over that same period of 10 years, so I can have some relation as to the percent increase in wages as compared with the increased cost of living.

Mr. FOWLER. We have that all prepared, and we will be very glad to have it introduced into the record this morning; we have it here.

Mr. BATES. You are probably speaking about something that I do not have in mind; I am not speaking about the over-all percent in personal service in the District. I am speaking about any particular department, taking the base salary.

Mr. FOWLER. I see.

Mr. Bates. Taking the base salary of a fireman or a policeman or a teacher, and saying that as of a certain date in 1937 the salaries are, say $2,500. What is it today, and what is that percent increase on base salaries.

Mr. FOWLER. Yes, sir.
Mr. Bates. Not total salaries.
Mr. FOWLER. We will give you that.
Mr. SMITII. I would like to ask a question of Mr. Fowler.
Mr. FOWLER. Mr. Smith?

Mr. SMITH. Mr. Fowler, on this chart of receipts and disbursements, Washington Aqueduct $1,600,000. Are those receipts from the sale of water or is that the cost of operating the water works?

Mr. Fowler. I presume--the receipts.

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Mr. SMITH. That would be the expense, would it not?
Mr. FOWLER. You are looking at where the money comes from.
Mr. SMITH. No, I am looking where it goes. That is the operation
of the water system.

Mr. FOWLER. That is right.
Mr. SMITH. On the opposite side you have water rates three million.
Mr. FOWLER. That is collections.
Mr. SMITH. Those are collections.
Mr. FOWLER. Yes, sir.

Mr. SMITH. Does that indicate that you are operating your water system here at a deficit of about a million and a half dollars a year!

Mr. FOWLER. No, it does not.
Mr. SMITH. What does it mean?

Mr. DAVID AULD (Superintendent, Water Department, District of Columbia). That $4,600,000 for 1948 for the Washington Acqueduct includes a great deal of capital outlay expense that is contemplated.

Mr. SMITH. Could you give us some figures on the comparative costs, of receipts and expenditures?

Mr. Auld. I am prepared to do that.
Mr. SMITH. Is it operating at a loss or at a profit?

Mr. Auld. No, sir. Our total income over the next 5 years, or rather right now, is about 312 million dollars. Our fixed operating costs are about $2,700,000. Therefore, we are operating free by about $950,000 a year.

Mr. Bares. Mr. Chairman, I note in the table prepared by the District auditor in 1946 your water revenue is about $3,412,000. Your expenditures were $3,328,000, but I note that as a result of perhaps these capital expenditures in 1948 your water expenditures having gone up to over eight million six, and if your water fund remains constant at 31/2 million, you are going to have a very substantial deficiency in revenue compared with your maintenance expenditures and your capital expenditures in 1948.

Mr. AULD. Yes, sir.

Mr. Bates. I presume what Mr. Smith has in mind is whether from the water revenues you are developing an excess over maintenance costs each year that goes into a so-called capital revolving fund, but in the examination of those records it is not shown that you do; it only shows that you have an excess of $200,000 over and above maintenance costs. Where are you going to get this money to expand the system as the years go

on ? Mr. Auld. I had a prepared statement along that line. I would like to give it a little later.

Mr. BATEs. Fine. Also, we would like to know from you, just to prepare you, that we are going to inquire as to whether or not water services are being extended outside of the District area, and under what conditions and whether or not the charges, the revenue that you receive from those outside areas, not only to take care of your

maintenance costs but help you also to assume part of the capital investment. We want to go into that part of it.

Mr. FOWLER. Mr. Bates, he could go into that right now, but in order to maintain the continuity, I suggest that you take the highway department and then Mr. Auld, and you would have our full budget picture.

Senator Caix. Mr. Fowler, you certainly may be excusel on a temporary basis.

Mr. FOWLER. Thank you very much.
Senator Cain. Mr. H.C. Whitehurst, come to the table please.

Captain Whitehurst, for the benefit of you who do not know him, is the Director of Highways for the District, and he will proceed as he sees fit.


DISTRICT OF COLUMBIA, WASHINGTON, D. C. Mr. WHITEHURST. Mr. Chairman, I am dealing with the highway fund alone. There are two bills, one to increase the gas tax, to which I will address myself first, and one for a change in the inspection fee of automobiles, which I will take up next.

I have prepared a statement which, I believe, will give you the full information that is needed. We have other data here that may be of interest as questions may develop.

Dealing with the proposed gas-tax increase, the Commissioners' recommendation has been predicated upon the necessity for additional revenue within the highway fund to, first meet immediate obligations, and, two, provide for highway development in subsequent years to cope with the existing congestion and traffic problems.

I think, so that there will be a clear understanding of the highway fund, it would be appropriate to state that this fund was created by act of Congress under the Revenue Act of 1937, since amended by several acts, one of which increased the gas tax from 2 cents to 3 cents in 1941. That increase became effective February 1, 1942. There have been other amendments to the act, but mostly they are of a minor nature.

Due to the necessary restrictions on account of the war, the benefits expected from this increase of 1 cent in the gas tax, estimated at $1,700,000 per year, was not realized. This estimate of $1,700,000 was predicated upon an annual consumption of 170,000,000 gallons of gasoline, the rate of taxable return in the fiscal year 1941.

In the four complete fiscal years following the passage of the act, namely 1973 to 1946, inclusive, the gasoline tax collections amounted to $12,700,000, while under estimated increase which the 1-cent increase forecast, an income of $20,100,000 was anticipated, a deficiency even greater by nearly $1,000,000 than the 2-cent tax would have produced if consumption had not necessarily gone down.

This statement is furnished only to show that there was no realization from the increase that was made in late 1941 and effective early in 1942.

The Congress, in setting up this fund, also prescribed the purposes for which it could be used, namely, the construction, maintenance, and administration of highways, the expense of the Office of the Director of Vehicles and Traffic, and not to exceed 15 percent of the pay of the Metropolitan Police uniformed force for the control of traffic.

It has on several occasions been erroneously stated that there was a large portion, or at least a portion, of this money which has been used for purposes other than traffic and highways. . That statement is entirely erroneous. Not one nickel of this fund goes into any other purpose than that preseribed by the act of Congress, which limits it exclusively and solely to highways and traffic.

Our expenses may be broken down into four categories:

First, there are the fixed expenses, as we have termed them, for highway purposes; that is, strictly highway purposes. Those are the expenses of the Office of Vehicles and Traffic, the amount included for the Metropolitan Police, the Trees and Parks Division of the Department of Highways, and a small amount for administrative expenses in connection with other departments, as well as a small amount for park roads. Those we refer to as fixed expenses, and the balance of the fund is applied to the Highway Department in three categories: Maintenance and operation, minor capital improvement, and major capital improvement.

During the years with which we are now concerned, the major capital improvement item may be broken ilown into two parts, namely, Federal-aid matching fund for the postwar period of 3 years, and wholly District of Columbia major capital improvements.

Appropriation estimates for 1948, chargeable to the highway fund, show an increase of approximately 17 percent over 1917. These increases are scattered through the four categories of expenses payable from the highway fund. They are due, in the main, to an increase in salaries and wages and the increased cost of work. They are fairly well distributed in all categories; however, little has been allowed to take up the slack that has occurred through the holiday in certain types of work during the war years.

In 1917, the current fiscal year, the fixed expenses amounted to $1,561,152. In the 1918 estimates, as submitted to Congress, the amount is tentatively fixed at $2,021,300, an increase of 29.4 percent. Highways operating expenses, in 1947 amount to $1,530,000; in 1948, $1,900,000, an increase of 47 percent.

Federal aid in 1947 amounts to $2,200,000; in 1948, $2,125,000, a small decrease.

District of Columbia projects, of major nature, amout to $1.290,000 in 1947, and I may say that is wholly for the South Capitol Street Bridge, and $1,510,000 in 1918, which is also a South Capitol Street Bridge item, which was authorized by Congress in 1910, at a total cost of four and a half million dollars.

Let me say that this gives a grand total of $7,706,000 for expeditures from the highway fund in 1947, and $9,210,300 in 1948, plus a deficiency of $131,300 for 1947 as follows: Police, $109,500; and Direc. tor of Vehicles and Trallic, $24,800. They are responsive to Public I aw 390, increasing salaries,

Turning how to the revene side of the picture, the total revenue from this fund in 1917 has been estimated at $6,510,000. Without the Prent increase in the gas tax, it is estimated at $6,964,600 for 1948.

Vír. Bates. And $6,040,000 for 1917?

Mr. WHITEHURST. Yes, sir: that is without the 1 cent increase, based upon an estimated gasoline consumption of 165,000,000 gallons.

In estimating revenue for 19:17 from the gas tax, the figure of 160,000,000 gallons was the basis pen which the return from this tax was estimated at $1,800.000. Through the first 8 months of the fiscal vear 1947, that is to February 28, 1947, the gasoline consumption has been at a rate indicative of a total of 115,000,000 for the year, 15,000,000 less than the original estimate covered.

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