UNITED STATES OF AMERICA

DISTRICT OF COLUMBIA APPROPRIATIONS FOR 1959

TUESDAY, JUNE 17, 1958

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D. C.

The subcommittee met at 10 a. m., pursuant to call, in room F-82, the Capitol, Hon. John O. Pastore (chairman of the subcommittee) presiding.

Present: Senators Pastore, Bible, and Beall.

DISTRICT OF COLUMBIA

BUDGET PRESENTATION

STATEMENTS OF HON. ROBERT E. MCLAUGHLIN, PRESIDENT, BOARD OF COMMISSIONERS; DAVID B. KARRICK, COMMISSIONER; AND COL. A. C. WELLING, ENGINEER COMMISSIONER

APPEAL LETTER

Senator PASTORE. The committee will please come to order. This morning the committee will hear the Commissioners of the District of Columbia on the overall budget estimates for operating expenses and capital outlay items in the fiscal year 1959, and the amendments requested to the House bill, in the amount of $4,096,950. Before you gentlemen begin with your presentations, I will place in the record the appeal letter of Commissioner McLaughlin, dated June 17, 1958, together with the summary table on available revenues, obligations, and surpluses in the five funds as of June 30, 1959. (The material referred to follows:)

Hon. JOHN O. PASTORE,

Committee on Appropriations,

United States Senate.

JUNE 17, 1958.

DEAR SENATOR PASTORE: The Commissioners beg to express to you their sincere thanks for extending to them the courtesy of an opportunity to indicate to your committee certain changes desired by them in the District of Columbia appropriation bill for 1959 as passed by the House.

1

The changes requested are summarized by appropriations and funds, as follows:

President, Board of Commissioners of the District of Columbia.

Summary of 1959 estimated available revenues, obligations, and surpluses, as of June 30, 1959

Senator PASTORE. All right, Commissioner McLaughlin, you may proceed in your own way.

Mr. MCLAUGHLIN. Mr. Chairman, to begin with, I would like to say that the Commissioners appreciate very much the time that you and the other members of the committee are giving to the affairs of the District government.

We appreciate this opportunity to make our presentation today.

BUDGET ESTIMATES

The budget estimates for the expenditures of the District of Columbia for the fiscal year 1959, as submitted to Congress in January of this year, amounted to $213,887,000. However, House Document No.

387, contained amendments which increased the total requests to $215,153,500, which was the amount considered by the House. This consisted of $171,700,500 for operating expenses and $43,453,000 for capital outlay.

In addition to estimates from District funds, the estimates included Federal payments to the general fund, $25 million; water fund, $1,532,000; and the sanitary sewage works fund, $697,000; or a total of $27,229,000. House Document 387 added a payment of $431,600 to the highway fund which increased the amount for Federal funds reviewed by the House to $27,660,600.

Statement showing estimates by operating expenses and capital outlay for 1958 and

The House Appropriation Committee allowed $203,276,100 (operating expenses, $168,902,000 and capital outlay, $34,374,100), the amount of the bill pending before you. The cuts were applied to almost every appropriation in the bill, in part with the concurrence of the Commissioners. In addition to reducing the estimates of appropriations for the District of Columbia, the House also elminated $5 million from the requested Federal payment of $25 million for the general fund. This has the effect of reducing the revenues of the general fund of the District of Columbia.

Of the House Appropriation Committee reductions of $11,887,400, the Commissioners are requesting restoration of $4,096,950. All except $81,000 of these requests are chargeable to the general fund with $1,717,950 for operating expenses and $2,379,000 for capital outlay.

PENDING PAY INCREASES

In addition to these restorations, the Commissioners have approved pay increases for wage board employees and there are pending salary increases for classified employees of the District, policemen, firemen, and school teachers. The classified group are subject to the same action affecting Federal employees, and the Commissioners have made and submitted proposals to Congress for the other categories. Based on these actions, the annual cost would be $12,860,000. The retroactive payments to January 1, 1958, will require $5,785,000 or a total additional financing for 1958 and 1959 of $18,645,000.

Senator PASTORE. Is it fair for me to say, insofar as this particular budget is concerned, that you have an item of $5,785,000, which is the impact of the salary increases affecting this budget?

Mr. MCLAUGHLIN. This budget is affected by the annual cost of $12,860,000.

Mr. Lowe. Mr. Chairman, these pay raise expenses are not reflected in the budget that is before you.

Mr. MCLAUGHLIN. That is right, not this specific budget, but for the fiscal year it would be $12,860,000.

Mr. Lowe. There will be supplemental requests covering this sum of $18,645,000 which will be submitted at such time as the Budget Bureau and Congress indicate that they wish to consider the supplemental.

Senator PASTORE. Now that is the point I make, that even the pay raises that are retroactive as of January 1, 1958, are not going to affect this budget?

sir.

Mr. MCLAUGHLIN. Not the budget before you at this moment; no,

FEDERAL PAYMENT TO GENERAL FUND

Public Law 451, approved June 6, 1958, increases the authorized Federal payment from $23 million to $32 million. The Congress, in effecting the increase, took into account the fact that the Federal Government is the largest "industry" in the District, but pays no taxes whereas industries elsewhere employing comparable numbers of people would pay taxes of more than $50 million per year. Hearings on Public Law 451 also brought out that it will be impractical to finance the District's needs without additional assistance from the the Federal Government, because District residents and businesses are now taxed at rates comparable to those of surrounding communities. Public Law 451 also permits the Commissioners to borrow $75 million for capital outlay payable from the general fund. In this connection, the detailed financial plan for the District, submitted to the Congress in connection with the hearings on this act, contemplated that borrowing for the general fund would take place only after full utilization of local revenues and increased Federal payments.