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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 $1,600,000 for 1918 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 31, million dollars. Our fixed operating costs are about $2,700,000. Therefore, we are operating free by about $950,000 a year.

Mr. BATES. 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 312 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 Cars. Mr. Fowler, you certainly may be excused on a tempolary 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, tirst 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 1913 to 1916, inclusive, the gasoline tax collections amounted to $12,700,000, while under estimated increase which the 1-cent increase forecast, an income of $20,400,000 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 1911 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 prescribed 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 down into two parts, namely, Federal-aid matching fund for the post war 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 1947, 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 29.1 percent. Highways operating expenses, in 1947 amount to $1,530,000; in 1948, $1,904,000, 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, amount to $1.290,000 in 1947, and I may say that is wholly for the South Capitol Street Bridge, and $1,510,000 in 1948, 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.

a 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 $134,300 for 1947 as follows: Police, $109,500; and Director of Vehicles and Traffic, $21,800. They are responsive to Public Law 390, increasing salaries.

Turning now to the revenue side of the picture, the total revenue from this fund in 1947 has been estimated at $6,540,000. Without the 1-cent increase in the gas tax, it is estimated at $6,961,600 for 1948.

Mr. BATES. And $6,540,000 for 1947?

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

In estimating revenue for 1947 from the gas tax, the figure of 160,000,000 gallons was the basis upon which the return from this tax was estimated at $1,800,000. Through the first 8 months of the fiscal year 1947, that is to February 28, 1947, the gasoline consumption has been at a rate indicative of a total of 145,000,000 for the year, 15,000,000 less than the original estimate covered.

Gasoline consumption in the fiscal year 1947 has not increased as we anticipated it would. However, in line with our thoughts that there would be an increase in gasoline consumption annually as additional cars would be put into use, we have for the fiscal year 1948 based our estimate upon 165,000,000 gallons, and in our forecast for the future, have allowed for an annual increase of 5,000,000 gallons for the year.

Such an annual increase is consistent with what may be expected from a study of the past records.

In order to meet our matching requirements of the three post war years, we have accumulated a balance in the fund for the years 1945 and 1946, so that we have a total availability for 1947 of $8,367,829, against an expenditure now authorized by Congress of $7,706,000 plus $134,300 deficiency, a total of $7,840,300.

This will probably illustrate to you better the way gasoline consumption goes, which, of course, is the basis for our estimates, fiscal years 1938 to 1948.

This little dotted line on 19-17 indicates where we will go in 1947 if the present rate during the first 8 months of the year is kept up.

One hundred and forty-five million instead of where it is drawn at one hundred and sixty million in the forecast based on 1948.

It is illustrated here, the growth each year, a forecast of 5,000,000 gallons a year. You will see by this growth that it is consistent when we run regularly on the other chart.

To further illustrate how this money is divided between the various expenses, we have prepared this chart, which is broken down to show the amount that goes to major capital outlay and State and Bridge Division, the amount that goes to minor, the amount of operating expenses, the amount of Metropolitan Police, the amount of vehicle and traffic, the amount of miscellaneous expenses.

Mr. BATES. Mr. Whitehurst, before you put that chart down, the Metropolitan Police is 10.05 percent. What is that used for?

Mr. WHITEHURST. For the control of traffic. Mr. BATES. In other words, the expenditures for salaries of police officers doing traffic work is chargeable to "Highway"?

Mr. WHITEHURST. The law states not to exceed 15 percent of the pay and allowances of the Metropolitan Police Force may be paid from the highway fund.

Mr. BATEs. They are members of the Police Department !
Mr. WHITEHURST. Yes, sir; uniform force.

Mr. BATEs. Yes. And the salaries are paid from the highway fund?

Mr. WHITEHURST. That portion of it.
Mr. BATES. That 10 percent?
Mr. WHITEHURST. That amount.
Mr. BATES. Out of those funds?

Mr. WHITEHURST. That is transferred to the Police Department appropriation.

Senator Caix. You have probably never used your limitation of 15 percent ?

Mr. WHITEHURST. It is nearer in the 1948 budget than it ever has been.

Senator Cain. 10.05 ?

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Mr. WHITEHURST. No; 10.05 is the percentage of the total highway Federal appropriation in those years.

Senator Cain. Yes.

Mr. WHITEHURST. But it has been running from 13, around, and it ran as low as 12.5 and as high as 14.6.

Mr. BATES. Having in mind the expenditures being made for police services, is there any similarity between the allocation of funds froni the highway fund here in the District or in any other city of the country, that you know of, where funds are not directly appropriated to the Police Department whose work includes that of traffic, patrolling streets and the like, and what was the basic reason?

Mr. WHITEHURST. In the States, Mr. Bates, the State police force operates the highways. The highway patrol is a part of the highway department of the States, and they pay for it. The latest figure is not to exceed that.

Mr. BATEs. Your police here do not operate on what we call the State highways. They patrol traffic.

Mr. WHITEHURST. They operate in connection with traffic, however, and the way we arrived at that was this, in the basic law: We figured out for the House committee upon the testimony of the Superintendent of Police, that he had at that time a need for 186 police officers in what was known as the Traffic Branch of the Police Department. Those 186 cfficers were a certain percentage of the total force.

I have the figures over here.

But so as not to complicate it and bring it all in the allied activities of the Police Department, we translated that into what it would be as to the total possible appropriation at that time. The figure was 14.7, so the committee wrote into the bill, “not to exceed 15 percent".

It was very scientifically worked out, I think, and very fairly worked out.

In order to meet our matching requirements of the three post war years, we have accumulated a balance in the fund for the years 1915 and 1946, so that we have a total availability for 1917 of $9,367,829, against an expenditure now authorized by Congress of $7,706,000 plus $134,300 deficiency, a total of $7,810,300. Provided there are no further supplemental appropriations chargeable to 1947, we would go into 1918 with a balance of $527,500 from this fund to be added to the anticipated revenue.

So that, summarizing the situation for 1918, without the increase in the gas-tax rate, estimated receipts in revenue for the year have been placed at $6,964,000. This, plus an estimate from lapsed balances of $182,256 and new balances from 1947 of $527,500 would provide a revenue availability for the year of $7,673,756. The balance anticipated from 1947 has been reduced due to deficiency appropriations of $131,300 recently made by Congress as a result of Public Law 390, of which $109,000 is for increase in amount allocated to the Metropolitan Police for traffic control and the balance to the Office of Director of Vehicles and Traffic, both entirely the result of salary increases. So without an increase in the gas tax the total availability of $7,673,756 would fall short $1,536,544 to meet the estimated requirements presented to the Congress by the Commissioners of $1,210,300. With the 1-cent increase, estimating a return on the initial year of $1,500,000, the apparent deficit under existing conditions could be

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