order that we might gear the estimated revenues to show the needs, and then from the standpoint of different sources come to a conclusion as to what is the best thing to do under the circumstances. I think Senator Cain has done a magnificent job here. The CHAIRMAN. I think you both have. We will meet tomorrow morning at 10 o'clock. You can bring those petitions home tonight if you wish and study each and every one of them. Senator CAIN. If I have your concurrence, I would suggest that the stenographer make mention of the fact that approximately 20,000 petitions in opposition to the gasoline tax were received and are on file in the clerk's office of the District of Columbia Committee, so we will not have any physical representation of those documents in the record. The hearing will be recessed until 10 o'clock tomorrow morning. (Whereupon, at 4:45 p. m., an adjournment was taken, to reconvene at 10 a. m., Thursday, April 10, 1947.) (The following letter was later received for the record.) Hon. C. DOUGLASS BUCK, INDIANAPOLIS 5, IND., April 8, 1947. Chairman, Committee on the District of Columbia, Senate Office Building, Washington, D. C. DEAR MR. BUCK: The Homer J. Williamson, Inc., candy manufacturers of which the writer is founder and secretary-treasurer, has just completed 39 years of continuous operations. We are writing to protest Senate bill 843, introduced by Senator Cain of Washington. As manufacturers of food we are not objecting to a special tax on food, but we do strenuously object to the phrase in this bill which reads "other than candy and confectionery." It has been well established in the courts and was especially acknowledged by the Government and the Army and Navy in World War II that candy is a most desirable and necessary food. We think it is a very dangerous precedent to discriminate against one food as against others. The bakery industry manufactures cakes which are in direct competition with candy and very similar in their ingredients. We appeal to your fairness as an American citizen whether or not you want to discriminate against one group over another. We distribute our candies in the District of Columbia, as well as 36 other States, and we feel this bill, if made into a law, would be unfair to the candy industry and a hardship on those manufacturers who distribute their candies in the District of Columbia. Yours very truly, HOMER J. WILLIAMSON, INC., Secretary-Treasurer. BUDGET REQUIREMENTS OF THE DISTRICT OF COLUMBIA THURSDAY, APRIL 10, 1947 JOINT SUBCOMMITTEE ON FISCAL AFFAIRS OF THE HOUSE OF REPRESENTATIVES, Washington, D. C. The joint subcommittee met at 10: 15 a. m., pursuant to adjournment, in the Senate District Committee room, Capitol, Washington, D. C., Representative George J. Bates (cochairman of the joint subcommittee) presiding. Present: Senator Cain (chairman of the joint subcommittee); Representative Bates (cochairman of the joint subcommittee). Mr. BATES. The committee will kindly come to order. We will continue the hearings on the several tax bills that have been filed by the District Commissioners seeking to raise more revenue for the operation of the District government. May I ask you, Mr. Keller, how long do you think you will take? Mr. KELLER. I think about 5 minutes or so. Senator CAIN. Mr. Keller, we are delighted to have you, and we will listen most attentively to any remarks you would like to make. STATEMENT OF JOSEPH E. KELLER, EXECUTIVE SECRETARY, DISTRICT OF COLUMBIA PETROLEUM INDUSTRIES COMMITTEE, WASHINGTON, D. C. Mr. KELLER. My name is Joseph E. Keller, and I am secretary of the District of Columbia Petroleum Industries Committee. The District of Columbia Petroleum Industries Committee includes all of the petroleum companies marketing within the District of Columbia. I understand that the purpose of the general hearings which are being held this morning, is not to discuss any specific legislation. Senator CAIN. Right. Mr. KELLER. And we have lined up a few witnesses, for the information of the committee, which we would like to reserve time for at the particular time when you take up the gasoline bill. Senator CAIN. Granted. Mr. KELLER. When we take up the gasoline tax. I have reserved time. I filled out cards for the people who are going to appear, and I think that there will be no difficulty about that. I did want to make a few general statements today, and I have conscientiously tried to frame my remarks this morning to stay within the bounds that have been set by you gentlemen, and I am sure that you will accept them in that spirit. There are three principal things which I would like to say. I have attended most all of the hearings, and I have been impressed with the fair-mindedness and objectiveness of this committee, and I feel that they are going to look at the specific matter which we are to present to you at a later time with the same spirit of impartiality as you have heard the District witnesses. I did want to say that of all the testimony that has been given so far, the District witnesses have stressed the fact that Washington has grown to twice the size that it was and, therefore, it needs twice the revenues, or more, than it did, and I think it is pertinent, Mr. Chairman and Congressman Bates, to point out at this stage in the hearing, that the highway fund which has been outlined already by the Director of the Highway Department, has for the next 3 fiscal years, fiscal '47, '48, and '49, more than twice the amount of funds in hand that it ever had in any three prewar years. Now, I think that is important because we have been talking over all about the need for increased revenue, and I think the committee ought to know that the highway fund already has that increased revenue, and it has it because the gasoline tax, and the other automotive taxes, are automatic things, which increase correspondingly with the number of people who come to the District, so that you do not have the same position that you had in welfare, for instance, or the same thing that you had in schools. People do not pay to go to school; there is an appropriation for schools which is set. If more people come in more children go to school, and the bills go up. That is not true, however, with the highway department, because when more people come in they buy gasoline, and they pay automotive taxes, and so the revenues are up. The figures which I am giving you I have studiously tried to take from the highway department's own figures, and I do not want it to appear that we have in any sense tried to give the wrong figures, as was indicated somewhat the other day, because we have been conscientious about that and tried to take the exact figures. Now, the $34,000,000 which I said is in the hands of the Department in the next 3 fiscal years is made up in this way: They are estimated revenues for 1947-49 of $21,442,000. The highway fund balance as of June 30, 1946, is included of $1,893,830, a set-aside by the highway department in 1946 for Federalaid matching of $1,600,000, and a 3-year Federal-aid allotment of $8,922,000. Now, that gives a total available fund for the District highway fund for '46-49 of $33,857,830, or in round numbers, $34,000,000. The facts will show, and I will have specific exhibits on this laterI do not want to burden you with those today, but I will have specific exhibits on that-that that constitutes a fund which is more than twice the sum of money that the highway department had in any three prewar years, taken from the highway department's own statistics, and own report. Now, with reference to the construction fund that the highway department has, the highway department has talked about the need, the tremendous need, for building up the backlog of work which was not done during the war period. I shall have a specific exhibit on that later to show that actually the minor capital outlays and the ordinary maintenance expenditures were carried on at precisely the same level during the war period as they were before the war, averaging 5 years. I will have an exhibit on that point. The second point which I wanted to make today was that we are talking about sales taxes, one of the items in your program. A dollar's worth of gasoline today—and the money goes into the highway fund-a dollar's worth of gasoline today already costs $1.312. Those are actual statistics. When we talk about a 2-cent tax, a 2-percent sales tax on other things, I think it is pertinent to point out that gasoline is already paying a 31.5 percent sales tax. Now, I do not want to be inaccurate on that point, particularly in view of the fact that, technically, the gasoline tax is not a sales tax in the accepted sense. It is levied on the producer, and it is passed along to the consumer, but I am sure you gentlemen will understand the way in which I have used the term "sales tax.' The third point which I think is pertinent to make at this time is, and this, in the light of Governor Lane's statement yesterday, it seems to me is particularly appropriate-is that a tax program, whatever it may be, ought to be based upon the needs of the particular political subdivision in which the tax is being sought. It ought not be on the basis of what some other State or what some other locality has. I am not saying that in criticism of Governor Lane in any sense of the word, but the Highway Director, in his remarks the other day, pointed out several States which have a 4-cent gasoline tax, and I think that it is only fair to point out that there are large numbers of States which have a 3-cent gasoline tax, and the Highway Department studiously refrains from mentioning any of those States before this committee. For instance, the State of Massachusetts, Mr. Bates, will be interested in this, and two other States up in New England, Rhode Island and Connecticut, have a 3-cent gasoline tax. The State of New Jersey, big State that it is, has a 3-cent gasoline tax. Delaware has a 3-cent gasoline tax. Michigan, Illinois, California and, I think, Mr. Chairman, the problems are somewhat different there in that the States have to maintain hundreds and sometimes thousands of miles of primary and secondary highways and farm-tomarket roads, and all that sort of thing. So that the amount of money which they need on the basis of that tremendous burden which they have would indicate that they, if they can get by with the 3-cent gasoline tax, then we can. When the Highway Department proposed its highway report in 1941, and that report contained many of the improvements which are now under way, they proposed at that time an increase in the gasoline tax in the District of Columbia. When they proposed that increase in the gasoline tax they did so with the idea that that would be sufficient money to finance the program. Now, we come along with a second request for additional increase in the gasoline tax. I think it is pertinent to observe at this point that the gasoline increase of 1 cent a gallon-namely, from 2 to 3 cents-became effective only in 1942, and I need not remind you gentlemen that at that time we were in the depths of rationing in the 13 Eastern States and that, therefore, we never had had a fair opportunity to see the amount of revenue which the 3-cent gasoline tax will produce, because we have not had a fair year. I shall present specific statistics later on to show that the gasoline tax revenues are increasing rapidly in the District, and so are the fees from registration of motor vehicles. Mr. BATES. Mr. Keller. Mr. KELLER. Yes, sir. Mr. BATES. The purpose of this meeting today, as I understand it, in order that we should have a sequence of our thoughts in the matter is that the District Commissioners and their various department heads were examined very closely during the last 2 weeks of these hearings as to the reasons why the expenditures in the District of Columbia have increased over a period of 10 years, all of which is set forth in these tables here. It was my understanding that today we would give the people a chance; after all, we must rely-that is, this committee and other committees of Congress-must rely on the people of the District. Mr. KELLER. Right, sir. Mr. BATES. With their close observation of what is going on, to give us testimony showing where, perhaps, during that 10-year period there has been extravagance or inefficiency in the administration of the District's business. Now, I wish that you would comment on that end of it, and then at a later date, after we hear the presentation of the case for the tax bills that the Commissioners have sponsored, we would be very glad to hear what you have to say in regard to your opposition to the gasoline tax, or to the people in opposition to any or all taxes. But if you could help the committee to uncover-if there is extravagance in the administration of the District or inefficiency or wherein there is a misuse of public funds, that is the purpose of the meeting today. This is the people's day in criticism of 'the Government in the way they run the District. Mr. KELLER. Yes, sir. Mr. BATES. I would like to have you stick to that, if you can. Mr. KELLER. Well, I had about completed the formal remarks that I wanted to make today. I would be the last one to say that there was any inefficiency as such in the management of the Highway Department, because I think the people are conscientious there in the Department; but I do feel this, Congressman, in specific answer to your question, that we have gotten an extravagance complex. We have fit-we have laid out a program not in accordance with the money which we have to spend, but with the money which we would like to spend. If all of us did that in our personal budgets, for instance, we could all use a couple of more automobiles and some more suits and a bigger house and that sort of thing. |