Senator HAYDEN. You obtained these in budget estimates? Mr. WILDONG. These are all budget estimates, submitted in Senate Document 57. Senator CORDON. I understand these are new items. But could you not foresee them in the ordinary operation of the District of Columbia? Mr. WILDING. This is, for instance, the additional amount to carry out the sales tax bill that is pending on the floor of the Senate, I hope, right now. And this is the amount which will be needed for what was then contemplated when this estimate was submitted to the Budget Bureau 6 weeks ago, for the 2 months of the fiscal year 1949 beginning May 1 and ending June 30. We have already submitted to and there has been accepted by, this committee, through its Subcommitee on the District of Columbia, another item for the fiscal year 1950. The CHAIRMAN. Which item is this? Mr. WILDING. It is the first item, sir, the item for an additional amount for the Assessor's Office, 1949, $48,800. ASSESSOR'S OFFICE- -ADMINISTRATION OF SALES TAX Mr. DENT. Gentlemen, I might explain that this is not a request for a deficiency in the general appropriation of my office. This appropriation is requested in order to set up the administration of the sales tax if it becomes law. The CHAIRMAN. If it does not become law, then you do not need it? Mr. DENT. Then this will not be needed, Mr. Chairman. But the pending bill provides that the imposition of the tax shall become effective 60 days after the first day of the month following the passage of the bill. It will be necessary for me to set up the organization, secure personnel and equipment, and also to register all the business houses in the District. They must secure a registration certificate and a certificate of authority before they can collect the tax. All that has to be done prior to the actual date that the law becomes effective, as far as the imposition of taxes is concerned. So this money will be needed if the sales tax bill becomes law. As to the amount requested in 1950, there has been deducted therefrom some of these items that we are asking for in 1949. In other words, there is no duplication in the two. Senator ELLENDER. Such as supplies and materials and equipment? Mr. DENT. Yes, sir. That is true. Senator ELLENDER. That will run into 1950? Mr. DENT. That is right, sir. COST OF COLLECTING SALES TAX Senator ELLENDER. How much do you expect it will cost to collect the tax? Have you any estimate? Mr. DENT. Senator, my estimate on a total annual basis, administrative cost, would be around $185,000. The estimate for a full year of the sales tax is around 131⁄2 million. Senator ELLENDER. What percentage would that be? Mr. DENT. About 11⁄2 percent, approximately. Senator ELLENDER. One and a half percent? That is a little high, is it not? Mr. DENT. No, sir. The average cost in all cities of the United States is around 2 percent. Senator ELLENDER. Can you not combine the collection of these funds with the collection of other funds? Mr. DENT. Well, Senator, I don't see how that is possible. This will necessitate the setting up of an entirely new tax division. Senator ELLENDER. I know that, but do you have a separate organization for every form of tax you collect? Mr. DENT. Yes, sir; we have the Real Estate Division and we have the Personal Property Tax Division. Mr. WILDING. And you understand these are separate divisions of one office, under one man, under the Assessor; separate divisions within the one office. Senator ELLENDER. Is there duplication of any kind? Mr. WILDING. No. ESTIMATE OF REVENUE FROM SALES TAX The CHAIRMAN. What did you say the estimate was of what the sales tax would bring into the city? Mr. DENT. Thirteen and a half millions, Mr. Chairman. Senator CORDON. Mr. Chairman, I am a little bit confused about the situation. The CHAIRMAN. I do not know anybody who can get out of that state better than you. Just go ahead and ask the witness any question you wish. FEDERAL CONTRIBUTION TO DISTRICT EXPENSES Senator CORDON. I am going to try to fight my way out of the maze as best I can. I was on the District of Columbia Subcommittee some time ago. As I recall this picture, the contribution by the Federal Government for the cost of administration of the District of Columbia has heretofore been a percentage of the over-all cost of operation of the city. Mr. WILDING. Not recently. Not in the last 25 years. Senator CORDON. I recall definitely the establishment of a percentage ratio some 3 years ago, where the percentage was that between the area of land owned by the Government as against that privately owned. Mr. WILDING. That was a proposed procedure. You remember, you were on the subcommittee, Senator. Senator Overton originally proposed this plan. Then it was taken up by Senator O'Mahoney in the second following year. I think it was proposed by Senator Overton in 1940. Senator CORDON. Was it adopted? Mr. WILDING. No, sir. I am sorry to say it was not. Senator CORDON. Still, the contribution is a single gross contribution to the cost, whatever the percentage may be. Mr. WILDING. A lump-sum amount. You can figure it out on a percentage basis, but it is not determined that way. Senator ELLENDER. You have a lump-sum figure now? Senator ELLENDER. I think it is $11 million, is it not? Mr. WILDING. It is $12,000,000 in toto, $1,000,000 of which goes to the water fund under the provisions of the enabling act. The general fund receives $11,000,000. Senator CORDON. Heretofore if your estimates have been wrong, and the District of Columbia has found it cost more to run its operations for 12 months, than you thought it did, have you always come back to the Government to get us to complete the deficiency? DEFICIENCY APPROPRIATIONS PAID FROM DISTRICT REVENUES Mr. WILDING. We come back to the single constitutionally provided agency, namely, the Congress, to get our moneys appropriated, but we do not get one single solitary cent of Federal money to support these kinds of appropriations we are coming up now to ask for. These are all paid from the District of Columbia revenues. Senator ELLENDER. All you get is that $12,000,000? Mr. WILDING. Yes. We get that, and we are finished. We don't get another cent. Senator CORDON. What I am driving at: When you come to ask for this money, which is not really a deficiency, but is in fact the money necessary to set up a new tax system, if you have it, and we make this appropriation, then to this extent out of the Federal Treasury comes the cost of initiating the administration of a new law. Is that a correct statement? Mr. WILDING. No, sir; I regret that that is not so on two counts. First, Senator, let me say that I always like to agree with you. Senator CORDON. Do not do that. Mr. WILDING. In the second place we have to pay the bill, and that is always a sorrowful situation for the District. We are certainly in no wonderful financial condition right now. Senator CORDON. Just what has happened here? Mr. WILDING. These amounts, as you may have noticed in Senate Document No. 57, are covered by this language: "The sums appropriated in this Act for the District of Columbia shall, unless otherwise specifically provided, be paid out of the general fund of the District of Columbia, as defined in the District of Columbia Appropriation Act, 1949." Senator CORDON. The next question is: Has this passed the scrutiny of whatever board is set up in the District to scrutinize the cost of operation of your office? Mr. WILDING. Yes, sir. Senator CORDON. That has already been done? Mr. WILDING. Yes, sir. That has been done by our office, the Budget Office, it has been done by the Budget Bureau, and we bring it before this committee inasmuch as the bill has already passed the House. COST OF OPERATING DISTRICT Senator ELLENDER. What does it cost you now in round figures to operate the District? Mr. WILDING. The whole thing? $100,000,000. Senator ELLENDER. And of that amount, the Government chips in $12,000,000? Mr. WILDING. $12,000,000. Senator ELLENDER. I wish it were zero. The people of this District ought to pay a little more in taxes, in my humble opinion. You are short on income tax and on sales tax. Many of these things should have been imposed quite a few years ago. I know of some sections in this country today that would be glad to pay for the right of getting the large Federal pay roll which the District enjoys. I have always been of the opinion that the people in this District are undertaxed, in contrast to other sections of the country. And I am glad to be able to support the pending measure to impose these additional taxes. The CHAIRMAN. Gentlemen, there is a roll call, and we have to go, so we will adjourn until 2 o'clock. Mr. WILDING. Do you think you will be finished with Mr. Dent? I think you have pretty well questioned him. Would you need him back at 2 o'clock? The CHAIRMAN. I do not think so unless he wants to come up. (Whereupon, at 12:05 p. m., the committee recessed to reconvene at 2 p. m. of the same day.) AFTERNOON SESSION (The committee reconvened at 2 p. m., upon the expiration of the recess.) The CHAIRMAN. We will come to order, gentlemen. EMPLOYEES COMPENSATION FUND AMOUNT REQUESTED Mr. WILDING. Mr. Chairman, we have here an approved Budget estimate of $15,000 of an additional amount for the purpose of paying the charges against the District government employees' compensation fund for this fiscal year of 1949, for which there was appropriated for the entire year $80,000 in the District Appropriation Act for that year. In addition, we have a balance from 1948 of $8,495, which is applicable to the 1949 obligations, and reimbursements of $63.78. That makes a total available for this year of $88,559. The justifications show an account for and including March 31, 1949, on which date there was an unincumbered balance of $16,620. EXPENDITURES FOR PERIOD JULY 1, 1948-MARCH 31, 1949 The expenditures for the period July 1, 1948, to March 31, 1949. amounted to $71,938.69. The amount which we require for the rest of the year we estimate to be $31,620, and deducting the amount of balance which we have as $16,620, that indicates there is a deficiency in this appropriation of $15,000, for which this estimate is submitted. The obligations under this appropriation arise through adjudications made by the Federal Bureau of Employees' Compensation, an activity under the Federal Security Agency which is the successor to the Employees' Compensation Commission. Those adjudications of amounts due by reason of injuries of employees of the District of Columbia while performing their duties are mandatory upon the Commissioners. We must pay them, and those payments are made from the appropriation which is here involved. We believe this amount is necessary and we consider this $15,000 estimate as being necessary to carry out the obligations for the rest of this fiscal year. The CHAIRMAN. Are there any questions? Senator CORDON. It is perfectly clear, as far as I am concerned, Mr. Chairman. The CHAIRMAN. Do you have anything further to add, Mr. Wilding? Mr. WILDING. No, Mr. Chairman, we believe that that explains it. OFFICE OF RENT CONTROL ADMINISTRATOR AMOUNT REQUESTED The next item is for the office of the Administrator of Rent Control. We have here Mr. Robert F. Cogswell, the Administrator of Rent Control, who can tell you about that. Senator CORDON. I have been through it, Mr. Chairman, and it indicates that it is $26,000 for one-quarter of a year for which an appropriation was not made last year. I do not think there is any necessity of going into it. The CHAIRMAN. If there are no questions, will you proceed to your next item, sir? PUBLIC SCHOOLS OPERATING EXPENSES Mr. WILDING. Our next item, Mr. Chairman, is the item for operation of buildings and grounds and maintenance of equipment under the public schools. AMOUNT REQUESTED This item, $97,000, is for an additional amount for the fiscal year 1949 for operation of buildings and grounds and maintenance of equipment of the public schools. The amount which was appropriated for this purpose for the fiscal year 1949 was $2,632,000. In addition to that amount, $41,000 will be received from the Recreation Department by way of reimbursement for its share of the cost of fuel and light for the use of school buildings under a cooperative agreement between the Board of Education and the Recreation Department. EXPENDITURES TO MARCH 31 The total amount expended through March 31, 1949, was $2,039,974, leaving a balance of $633,026 for the three remaining months of the fiscal year 1949. It is estimated that there will be required for the balance of the fiscal year 1949 a total of $730,026, indicating a deficiency of $97,000. We believe the justifications clearly indicate the need for this money and the reason which has caused this shortage. We believe that is self-explanatory. |