Hearings

propriating the Federal share in a lump sum each year, to and including the fiscal year 1939.

These lump-sum appropriations varied from $9,500,000 down to $5,000,000. Beginning with the fiscal year 1940, the Federal payment has been $6,000,000 as authorized by the District of Columbia Revenue Act of 1939, except that last year it was raised to eight.

For the fiscal year ending June 1940, and for each year thereafter until fiscal year 1947, the appropriation act provided that the payment of the United States to defray the expenses of the government of the District of Columbia is in the amount of $6,000,000.

I have here a table that runs from 1922 up to date, which gives you the total appropriations for each fiscal year; the District of Columbia's share, the United States share, and the percentage of the United States share, showing the steady decline.

Senator CAIN. May I interrupt to ask one question? In what year did you get your greatest sum of dollars from the Federal Government, and under what formula did you get it? Did you get it under 50-50, 60-40, or lump sum.

Mr. FOWLER. In 1931 and 1932 we received $9,000,000; in 1931 the amount was, $9,500,000; that was 20 percent.

Senator CAIN. But that was under the lump-sum procedure where they were getting away from either the 40-60 or 50-50.

Mr. FOWLER. That is right. You see, the idea as I see it, Mr. Chairman, is that the 40-60 formula became quite a heavy burden when the appropriations got up around $40,000,000, and the Congress refused, it just would not give that much money to the District, so they just ignored it.

May I insert that into the record?

Senator CAIN. Yes.

(The table referred to was as follows:)

Statement showing appropriations for the government of the District of Columbia by funds and the amount paid from Federal funds for the fiscal years 1925–38, inclusive.

Mr. FOWLER. Now, the Commissioners of the District of Columbia. for several years have known that in 1948 additional tax revenues would have to be made available to the municipality if it was to continue to maintain a high standard of service.

When we were before the subcommittee of the Committee on Appropriations of the House of Representatives, considering the appropriation bill for 1947, attention was specifically directed to our financial resources and to the fact that considerable additional revenues would have to be found to balance the budget for 1948.

We then advised the Congress, through its committee, that the Commissioners had appointed a committee to review the tax structure, and when that study was completed the committee's findings, with recommendations of the Commissioners, would be forwarded to the Congress.

We feel that we have been most fortunate in passing through the war years so successfully, from a financial standpoint; through the cooperation of the Congress, we paid our indebtedness, over $16,000,000, and we were able to set aside a reserve for capital improvements when priorities would permit, amounting to $10,000,000.

We were conscious of the fact that we were postponing many important capital items which perhaps would now have been available for utilization for our people, had it not been for priorities and high

costs.

We had hoped that building and maintenance and operating costs would have, by this time, shown a considerable decline, but this is not the fact; we must face those high costs.

Now, the total amount of our budget, as Commissioner Young has just told you, is $95,082,500. Of this amount, the total estimated obligation for the highway fund is $9.210.000, and the total estimated obligations for the water fund is $8,646,000; the estimated obligations, the total estimated obligations for the general fund, remembering that we have three funds, is $77,226,200. Of this, the operating expenses will take $69,347,800 and the capital outlay, $7,878,400.

So we have that picture before us. We need $77,226,200. How are we going to get it? Well, the revenue availability is arrived at this way: We had unobligated balances released to surplus which amounted to $1,000,000, and then we had the revenues from existing legislation. We estimated that those revenues would be as follows:

From real estate, $27,000,000: from personal tangible, $3,700,000; motor vehicle, personal, $1.250,000; penalties and interest, $225,000; alcoholic beverages, $2,500,000; beer, $300,000; insurance, $1,185,000; public utilities, banks, and so forth, $3,327,000; licenses and permits, $2,170,000; individual income, $3,900.000: corporation net income, $5,250,000; inheritance and estate, $1,200,000; earnings and miscellaneous, $3,545,000.

So we estimated that the total revenue availability from existing legislation would amount to $55,550,000. That, of course, added to the unobligated balance, released to surplus, would not be enough. Therefore, we had to estimate on new legislation, and the legislation which has been sent to you here, according to our estimates, if enacted into law, would produce for the first year $11,300,000, broken down as follows:

Sales tax, $5,250,000; the cigarette tax, $600,000; amusement tax, $750,000; alcoholic-beverages tax, $2,200,000; the public-utility bills tax. $500,000; and the income tax, $2,000,000.

Now, that 11 million, added to the other revenues, plus the Federal payment of 8 million, and plus the sale of securities in the public

works investment fund which we have, of $1,376,200, would balance our general fund budget of $77,226,200; which would leave, however, in our public-works investment fund, as a cushion, $3,698,307.

Now, in these items of the budget, there are certain items which Mr. Bates just referred to, over which the Commissioners have no administrative control. The fact of the matter is, when you analyze it straight through, the Commissioners have hardly added more than 3 million dollars over last year, other than the mandatory provisions. Take the pay increases, $5,101,217, a 3-year total amounting to $11,518,900.

Now, that becomes regular each year, $11,518,900 pay increases, and do not forget that does not include school teachers' increases for 1948.

Mr. BATES. Let me interject a question at this moment, Mr. Fowler. Mr. FOWLER. Yes, sir.

Mr. BATES. You mention it because it is a very important item. I think we have figures here to show what percent of all expenditures. of the government is composed of what we call personal services. Mr. FOWLER. That is right.

Mr. BATES. This 11 million dollars that you speak of, over which you say the Commissioners have no control, I presume you meant in the authorization and the direction of the Congress to increase salaries. Mr. FOWLER. That is correct.

Mr. BATES. Will you answer this question. Did the Commissioners at any time favor any legislation respecting any part of those salary increases that you mention, that 11 million dollars?

Mr. FOWLER. Yes; the Commissioners did.

Mr. BATES. For what part?

Mr. FOWLER. I think that the Commissioners favored the increase in the police and firemen's salaries, and they favored, to some extent, the increase in the school teachers' salaries, but as to the general increase affecting the Federal pay roll, the Federal employees, throughout the Government, they were not even heard on those, and took no part in it, because, as a general proposition, whatever the Congress does for the Federal employees, they do for the District. employees who are classified, and they certainly would have no objection to it.

Mr. BATES. You are speaking about the 14-percent increase, is that right?

Mr. FOWLER. That is right. I mean at no point did the Commissioners object, and I think, certainly, they never would object to whatever the Congress did as to the over-all picture for all of the employees of the Government. We fit into that same category.

Mr. BATES. The thought that I want to leave in the record is whether or not the Congress has actually forced onto the District expenditures that the District did not want to assume, and that is the essence of the editorial that I read yesterday, that it is due to what Congress did in forcing these expenditures that resulted in this increased cost, or will as the years go on, to the District government.

in

Now, I want to clear that thing up. Are we responsible? If so, any substantial degree or is it just one of those things that happened in an economic set-up that, due to increased cost of living, we must recognize it in the form of increased salaries.

99538-47-2

When we were before the subcommittee of the Committee on Appropriations of the House of Representatives, considering the appropriation bill for 1947, attention was specifically directed to our financial resources and to the fact that considerable additional revenues would have to be found to balance the budget for 1948.

We then advised the Congress, through its committee, that the Commissioners had appointed a committee to review the tax structure, and when that study was completed the committee's findings, with recommendations of the Commissioners, would be forwarded to the Congress.

We feel that we have been most fortunate in passing through the war years so successfully, from a financial standpoint; through the cooperation of the Congress, we paid our indebtedness, over $16,000,000, and we were able to set aside a reserve for capital improvements when priorities would permit, amounting to $10,000,000.

We were conscious of the fact that we were postponing many important capital items which perhaps would now have been available for utilization for our people, had it not been for priorities and high

costs.

We had hoped that building and maintenance and operating costs would have, by this time, shown a considerable decline, but this is not the fact; we must face those high costs.

Now, the total amount of our budget, as Commissioner Young has just told you, is $95,082,500. Of this amount, the total estimated obligation for the highway fund is $9,210,000, and the total estimated obligations for the water fund is $8,646,000; the estimated obligations, the total estimated obligations for the general fund, remembering that we have three funds, is $77,226,200. Of this, the operating expenses will take $69,347,800 and the capital outlay, $7,878,400.

So we have that picture before us. We need $77,226,200. How are we going to get it? Well, the revenue availability is arrived at this way: We had unobligated balances released to surplus which amounted to $1,000,000, and then we had the revenues from existing legislation. We estimated that those revenues would be as follows:

From real estate, $27,000,000; from personal tangible, $3,700,000; motor vehicle, personal, $1,250,000; penalties and interest, $225,000; alcoholic beverages, $2,500,000; beer, $300,000; insurance, $1,185,000; public utilities, banks, and so forth, $3,327,000; licenses and permits, $2,170,000; individual income, $3,900,000; corporation net income, $5,250,000; inheritance and estate, $1,200,000; earnings and miscellaneous, $3,545,000.