able to expect these trustees of public funds to investigate these funds for use as mortgage money.

Mr. ASHLEY. So that there is some uniformity to help in the marketability also.

Mr. WALSH. Yes, right.

Mr. MOORHEAD. So if these mortgages would have a Federal guarantee, do you think that the trustees of the funds would make the investment?

Mr. LINDSAY. Yes; I do. The answer is yes.

Mr. MOORHEAD. Thank you, Mr. Chairman.
Chairman PATMAN. Mr. Brown.

Mr. BROWN. Thank you, Mr. Chairman, and thank you, Mayor Lindsay, for being with us this morning.

Have you given up on trying to get your flight? If not

Mr. LINDSAY. I am going to try to get the 12:30, but if I don't, I don't.

Mr. BROWN. I won't pursue any questioning then so you will have a chance to get away. I just am wondering in what are these trust funds invested, if only $210 million are in housing and real estate mortgages. Do you know offhand, just approximately?

Mr. LINDSAY. It is mainly public obligations, Government bonds. Mr. BROWN. Primarily, New York municipals

Mr. LINDSAY. Yes.

Mr. BROWN (continuing). Or Federals?

Mr. LINDSAY. Yes; and Federals.
Mr. BROWN. Thank you very much.

Chairman PATMAN. Mr. Stephens.

Mr. STEPHENS. Thank you, Mr. Chairman. Mayor Lindsay, I know that you are in a hurry. We do appreciate your being here. What I want to emphasize is this: Isn't it true that our Banking and Currency Committee and the Subcommittee on Housing has done its best to bring authorizations forward in the field of housing that will begin to be adequate to meet some of these problems, and that where we have brought the authorizations forward the Appropriations Committee and Presidential budgets have not recognized the priority that we think these things ought to have?

Mr. LINDSAY. That is correct.

Mr. STEPHENS. I hope that you will have an opportunity to appear before the Appropriations Committee, the proper subcommitee, and to point out that that is where the pressure needs to be brought.

I am delighted to have you appear before our committee and to provide a forum for your statements, but I think that the Appropriations Committee and Presidential Budgetary Commission, or whatever it might be that have cut on these, also need to have the attention of the mayors of large communities like yours and small communities. Mr. LINDSAY. I appeared last year before the Appropriations Committee in connection with appropriations for this fiscal year, and I should imagine I will be doing it again.

Mr. STEPHENS. Well, I hope you will, and also I hope that you will also be an advocate of the fact that rural America needs the support of urban America in housing for part of your problem is because we have not provided the adequate housing, sewer and water facilities

in rural America. We find that where you in your urban community have inadequate water and sewer facilities, in the rural communities it is not inadequate water and sewer facilities-it is none. And that, of course, makes it attractive for people to leave those communities. I speak from this standpoint, that my district is half urban and half rural as far as the population is concerned. So I am not trying to favor one over the other. But, I hope that when you meet with the mayors of the large communities you do emphasize that part of your problems can be corrected by their support of rural housing programs.

Mr. LINDSAY. I agree with you, Congressman Stephens. As the country gets older and the population grows and that massive suburbia in between cities turns into one big, huge-what is the wordmegalopolis, increasingly we are all in the same boat, and there is no longer any upstate-downstate gaps and there are no rural versus city issues.

Mr. STEPHENS. It is all one problem.

Mr. LINDSAY. It is all one problem now.

Mr. STEPHENS. Thank you.

Chairman PATMAN. Mr. Mayor, we have one member who will interrogate you; is it all right, if some of us have questions that we are not permitted to ask because of the time not available, to submit those questions to you before you look over your transcript, and would you answer them when you look over your transcript?

Mr. LINDSAY. Yes; of course. I would be delighted. Incidentally, Mr. Chairman, I might-Congresswoman Sullivan asked the question on debt service dollar costs. The record should have-I have the figure now. The total debt service for fiscal 1970-71 is $752 million, and the total interest payment burden for fiscal 1970-71 is $260 million, New York City's budget.

Chairman PATMAN. And you may expand on your remarks if you desire to do so when you look them over. All right, Mr. Williams.

Mr. WILLIAMS. Yes, thank you, Mr. Chairman. And thank you for coming here, Mr. Mayor.

I don't think high interest rates should be a surprise to anybody when we consider that during this decade the Federal Government has spent over $57 billion more than it has taken in. And actually what we have today is a situation where the Treasury Department is refinancing Federal obligations that are maturing at four and a quarter percent, that was the interest rate, and we are refinancing them at interest rates of over 7.5 percent. We have some Government-related agencies who are paying over 8.5 percent interest rates and actually paying 90, 91 cents on each dollar loaned. But to get back to some questions about the city of New York, what is your real estate or property tax per thousand dollars of real value?

Mr. LINDSAY. That is $60 a thousand.

Mr. WILLIAMS. Sixty dollars a thousand. What percentage of your assessed valuation in New York is nonresidential?

Mr. LINDSAY. What percentage is nonresidential? I will have to get you that figure; I can't give you that figure off the top of my head. Mr. WILLIAMS. I would appreciate having that because the more of your assessed valuation that is nonresidential, the more tax revenues you have coming from sources that don't send children to school. You

have miles of apartment buildings, high-rise luxury apartments, you have miles of office buildings and you referred to more office buildings being built in lower Manhattan. You have large and small industrial and commercial complexes. And it would certainly seem to me that you should be able to get enough tax revenue from these sources to meet at least most of New York's needs. Now, you mentioned a commuter tax

Mr. LINDSAY. I have to disagree with you.

Mr. WILLIAMS. You mentioned a commuter tax. What is your commuter tax?

Mr. LINDSAY. We raise about $20 million from it as opposed to about $200 million from our residential income tax.

Mr. WILLIAMS. Have you ever considered a wage tax?

Mr. LINDSAY. Well, we did and we rejected that in favor of a graduated tax for both residents and nonresidents.

Mr. WILLIAMS. An income tax?

Mr. LINDSAY. Yes.

Mr. WILLIAMS. Yes.

Mr. LINDSAY. The differential is very bad because in some brackets it is as high as six to seven to one between resident and nonresident and that should be rectified. Most political and social scientists believe that your differential should not be more than two to one.

Mr. WILLIAMS. Now, you talked about tax-sharing with the State. Actually, most of your assessed valuation is in the cities and in suburbs. You say you have six cities in New York State

Mr. LINDSAY. Six large cities. We have 200 that are under the classification of city.

Mr. WILLIAMS. Now, in those six large cities what percentage of the assessed valuation, or taxable property, do you have in New York State?

Mr. LINDSAY. I can't give you the figure on that. I don't know.

Mr. WILLIAMS. The point I am really trying to make here is this. Most of your assessed valuation. most of your income has got to come from your cities and your suburbs. You certainly can't accomplish much by taxing your upper New York State rural areas and your small villages or towns. The bulk of your income has got to come from your cities and your suburbs regardless of whether the city collects the tax or the State.

Mr. LINDSAY. Well, the biggest producer of revenue in New York State is the corporate and individual income tax. for the State. Now, the city of New York current operating budget is $6.6 billion. Twothirds of that comes out of the city itself and its tax base. One-third of it is divided between Federal and State Governments. Most of that $6.6 billion budget that we are operating with, the vast bulk of it comes from real estate taxes. A small portion of it comes from the New York City income tax. As I told you, the New York City income tax generates about $750 million a year, which is really only a small source in a nearly $7 billion budget. So the bulk of it is real estate. Our problem is that even with a very burdensome local income tax, which we were driven to enact by sheer necessity to survive, our ordinary costs of just providing basic services increases 15 percent a year. A 15 percent increase a year to serve the people of New

York City, the millions of people who visit the city and the international body that lives there at the current level of services.

Our tax system including the local income tax produces an increase normally of somewheres between 5 and 7 percent. That is because real estate taxes are rather fixed. This means that each year we are talking about operating budget gaps in the area of $500 million. Our projected budget gap just to pay for the school system and the police and the firemen and the nurses and the hospitals, we run 20 municipal hospitals in New York City, for the fiscal year that begins June 1 of this year is in excess of $750 million. And at this moment we have no idea where it is going to come from.

Mr. WILLIAMS. Well, I just go back to the same point, the source of your taxables are your cities and your suburbs, whether the cities levy the tax or the State does it or the Federal Government. That is where the bulk of the money has to come from.

I do have some other questions relative to your statement in which you state that more housing units in New York are becoming uninhabitable each year than your new housing starts, but I will ask those questions for the record.

Chairman PATMAN. Thank you, sir.

Thank you very much, Mayor Lindsay. We appreciate your time. You have been very helpful to us.

Mr. LINDSAY. Thank you, Mr. Chairman.

(Whereupon, at 12: 15 p.m., the committee recessed, to reconvene at 10 a.m., Tuesday, February 3, 1970.)