Mr. WILDING. Not quite, sir.

Mr. BATES. So, it balances up that way.

Mr. WILDING. Again, I repeat this is a cash basis on which you are discussing this now, on a revenue-appropriation basis we will only have in the general fund investment fund, at the end of 1948, 31⁄2 million dollars, call it $3,700,000, precisely it is $3,698,307.46.

Mr. BATES. Well, I just wanted to develop that reserve, that $15,000,000, to show just what we are about in case we are asked a question. Commissioner YOUNG. Mr. Chairman, while we are on the subject of that problem, I think it would be interesting to your committee, and also enlightening, if Mr. Mason just presented some of those problems in his three big departments.

Senator CAIN. We would, if we sat this afternoon, Commissioners, beginning at 2 o'clock, satisfy your requirement problem within an hour's time, would we not?

Commissioner YOUNG. Yes.

Commissioner MASON. It suits me all right. But the general has to be at a PUC meeting.

General YOUNG. I can send my assistant Colonel Madsen here with a statement, if that is satisfactory to you.

Senator CAIN. Or it would suit my convenience, subject to Mr. Bates' interest, to meet at 4 instead of 2.

General YOUNG. I cannot tell you how long this meeting will last, sir. It would be a rather difficult problem.

Mr. BATES. General, may I suggest that you send up a complete tabulation, that you have in mind estimated costs projected over a period of 4 or 5 years. You must have those set up in a program of the Public Works Department.

General YOUNG. Yes, sir; we have, and I wish to submit to the committee a series of revised estimates of the costs of projects now on the books, but as I was going to say, and my assistant will state this afternoon, it will be several days before I can give you the exact figures. I would, however, like to place in the record a general statement about that situation, which is important.

Mr. BATES. That will serve the purpose.

General YOUNG. With your permission, I will prepare a statement for him, and submit the rest later.

NOTE. A schedule of the revised cost estimates referred to was later submitted to the committee and is filed with its records.

Mr. BATES. That will be fine.

Before we adjourn, may I ask a question of the chairman of the Commission. I notice that in the public-utility tax you suggested that perhaps you are not going to press that too strong. On that I notice in it-in this new bill here, the bill for sales tax, that you have a section here for a 2-percent tax on the receipts from every sale of gas, electric refrigeration and steam service of whatever nature for domestic or commercial use, a 2-percent sales tax on gas and electricity. Now, did the other bill embrace about the same tax? Commissioner YOUNG. I do not know.

Mr. WALKER. Yes, it did.

Mr. BATES. Then, you are going to have two taxes on the same thing.

Mr. GEORGE C. UPDEGRAFF (Assistant Corporation Counsel, District of Columbia). That provision was included in the sales tax to impose the tax on the service of those utilities in the event we did not get the public-utilities tax, and there was an exemption provision added to exempt those utilities services from the tax in the event the utilities bill was enacted. Now, whether the Commissioners want to continue to have that imposition of tax remain in the sales tax or remove it, is a matter they will have to decide.

Mr. BATES. I think the statement was made that they were not so deeply concerned or would not push the so-called tax on utilities. There is no reference made of its being inserted in this other bill.

Now, Commissioner Young, was your statement made on the presumption that you thought perhaps a tax on gas and electricity was not altogether warranted or you did not mind the loss of revenue from that or just what is your position on that?

Commissioner YOUNG. We are not pushing it. We thought yesterday when I mentioned it that they were already paying this tax, Federal tax, on all amusement houses and utilities that we would not come along and put this on top of it.

Mr. BATES. In other words, your feeling is that you would not be so fussy about pushing, to use the expression that you used yesterday, pushing the utility tax in the bill, specifically setting up a utility tax, and you are not fussy about section B in the sales tax.

Commissioner YOUNG. No, that has not been considered by the Commissioners by itself.

Mr. BATES. Well, it is the very same thing, of course.

Commissioner YOUNG. Since yesterday's statement that should be considered more seriously by us.

Mr. BATES. Then, we will let that thing rest until we hear from you within 24 or 48 hours.

I think, Mr. Chairman, that if we meet at 2 o'clock and finish up with the Commissioners, we can get this part of the record completed. Senator CAIN. And that will close up the entire part of that phase of the hearing.

Mr. BATES. And then next Tuesday we will meet to hear any opposition to these taxes.

Senator CAIN. That is right. We will not hear any private people this afternoon. We intend to hear the Commissioners.

(Whereupon, at 12 noon, the committee adjourned to meet at 2 p. m. the same afternoon.)

AFTERNOON SESSION

(The subcommittee reconvened at 2 p. m. upon the expiration of the recess.)

Mr. BATES (Cochairman of the joint subcommittee). Well, now, Mr. Commissioners, we will start the meeting again, which I think we both hope will be the last at which your presence will be required. I am not saying that in any fashion other than pleasantly.

Commissioner MASON. Of course, it is our duty to be here whenever you want us.

Mr. BATES. The very purpose of this meeting being joint in character was to obviate the necessity of your coming before us two or three or four times and occupying your time as well as our own.

These hearings have been rather protracted, but I think a great deal has been gained on both sides by a better understanding of the fiscal problem of the District, and the surveys of the cost over a period of 10 years.

It is our responsibility, and I think it is up to us to assume it, in order to get at the basic facts, and we have to know, of course, what they are, and we have to call on the men who are assigned to the job of running the District.

Now, you are going to include in your statement the over-all general reasons why an increase in revenue is necessary, and not only necessary but the new taxes, the new sources of taxes which must be developed in order to meet those requirements.

You can proceed in your own way.

Commissioner YOUNG. Well, I presented that this morning, Mr. Chairman.

Mr. BATES. I spoke to the budget officer, and I asked him to sort of recap what you had to say, showing what your budgetary requirements are for 1948, your deficiencies of revenue on the basis of your present source of taxes, and why it is necessary, because of the projected program of major improvements in the future, why it will be necessary to develop these new sources, such as set out in the new tax bills, and the amount that will be required.

Commissioner YOUNG. He can pick that up.

You asked me to give you the over-all picture, and Mr. Fowler can pick up the details.

Mr. BATES. Will you please give your name to the reporter?

STATEMENT OF WILLIAM G. WILDING, DEPUTY DISTRICT BUDGET OFFICER, DISTRICT OF COLUMBIA

Mr. WILDING. William G. Wilding. The proposed expenditures for 1948, as included in the budget which has been transmitted to Congress by the President, are $95,082,500.

The estimated income of the District of Columbia from all sources, and that includes the highway fund, the water fund, and the general fund, the estimated revenue will be $65,979,600 from sources under the present tax laws, and does not include any revenues from the legislation as proposed, and now pending before your committee. The other sources of income are surplus funds from unexpended balances and so forth, from the 1947 fiscal year of $1,675,701.

The proposed sale of securities which have been bought by the Treasury Department at the request of the Commissioners under appropriations made for that purpose in the fiscal years 1945 and 1946, the sale of those securities is $1,945,460.

And the final source of revenue is the Federal payment.

Mr. BATES. Now, what is that amount?

Mr. WILDING. $8,000,000.

Mr. BATES. $8,000,000.

Mr. WILDING. Those sources of income total the estimated income of $77,600,761, and indicate therefore, subtracting that total of estimated income from the total budget as mentioned, $95,082,500, the subtrahend is $77,600,761

Mr. BATES. That is right.

Mr. WILDING. And leaving a remainder or a deficit under present tax laws of $17,481,739.

Mr. BATES. That is correct.

Mr. WILDING. Now, the proposed taxes under the bills as now pending before this committee:

It is estimated that those will produce $13,948,000 in the details as given this morning, being $11,300,000 for the general fund, $1,665,000 to the highway fund, and in addition a further method of meeting that deficit is proposed under the water bill, which has been discussed before the committee by the Commissioners, and by the Superintendent of the Water Department, Mr. Auld. The Federal loan which could be under that legislation figured in the fiscal year 1948, amounting to $3,533,739, and those are in the two last named figures. Mr. BATES. What is the sum total of those?

Mr. WILDING. Pardon me? The sum total?

Mr. BATES. $11.000,000 is the first figure.

Mr. WILDING. Yes, sir; $11,300,000.

Mr. BATES. Yes.

Mr. WILDING. $1,665,000.

Mr. BATES. Yes.

Mr. WILDING. And $3,533,000, and one figure which I have not mentioned.

Mr. BATES. Pardon me, sir.

Mr. WILDING. The additional revenue to the water fund I had not mentioned.

The additional revenue to the water fund, under the legislation that is pending before the committee, being represented by payments to be made by the Federal Government of $886,000.

Mr. BATES. $886,000.

Mr. WILDING. Yes; and from the District government, since even we have to pay the water bill, $97,000, or a total of $983,000 accruing to the water fund.

And you had, Mr. Bates, previously the figures of $11,300,000, $1,665,000, and $3,533,000, and those three figures will add to $13,948,000.

Mr. BATES. You gave a figure of $3,533,000 from the bond issue for water?

Mr. WILDING. Yes, sir. I get $13,948,000.

Mr. BATES. Let us see about that.

Mr. WILDING. Mr. Bates, there are three figures. There is $11,300.000.

Mr. BATES. That is right.

Mr. WILDING. New taxes to the general fund.

Mr. BATES. Yes.

Mr. WILDING. Splitting this up again, $1,600,000 under the new 1-cent gas tax.

Mr. BATES. All right.

Mr. WILDING. $65,000 from the 50-cent increase in the inspection fees.

Mr. BATES. All right.

Mr. WILDING. $983,000 water fund. That is that last figure.

Mr. BATES. That is where you threw me off; $11,300,000, that is for the general fund?

Mr. WILDING. For the general fund.

Mr. BATES. And then $1,665,000?

Mr. WILDING. For the highway fund.

Mr. BATES. And then you add $3,500,000?

Mr. WILDING. No; leave that out for the moment.

Mr. BATES. That is where we are off.

Mr. WILDING. I will come to that in just a moment. I was breaking that down two ways.

The method of getting this deficit of $17,481,000: One, the proposed new tax bills. Those tax bills provide for certain revenues other than out-and-out taxes, inasmuch as the Federal payment for water and the District of Columbia payment for water could not be properly designated as taxes, but they are revenue to the water fund.

Mr. BATES. Will you restate those different sources of income and revenue that will make up that deficiency of $17,481,000. Start all over again.

Mr. WILDING. The proposed new taxes. The new revenue under the new tax legislation pending before this committee, it is estimated would produce, in the fiscal year 1948, revenues which would be credited to the general fund in the total sum of $11,300,000.

Mr. BATES. All right.

Mr. WILDING. Under the increased gasoline tax of 1 cent, and the increase of the inspection fees from 50 cents to $1, the revenue would accrue to the highway fund in the amount of $1,665,000.

Mr. BATES. That is right.

Mr. WILDING. And under the pending legislative bill for the water service, revenues would accrue to the water fund, through payments made respectively by the Federal Government in the amount of $886,000 and by the District government in the amount of $97,000, or a total of $983,000.

Mr. BATES. All right.

Mr. WILDING. And those three figures will add to the total of the new revenues under the proposed legislation of $13,948,000.

Further, under the water service legislative bill pending before the committee, there are authorized loans to be made by the Federal Government to the Commissioners, and it is estimated that during the fiscal year 1948, a loan in the amount of $3,533,739 would be needed to meet the amount of the appropriations requested in the budget, in the 1948 budget.

That last-named figure, added to the $13,948,000 will give $17,481,739, which is the amount of the deficit which we mentioned above. Mr. BATES. That checks all right.

Now, you are inserting at this point in the record, Mr. Budget Commissioner, a schedule of these capital improvements that you are making, say, in the fiscal year 1948, and also recapping the information we have received from the auditor?