about these problems, determine the future needs, and to make necessary financial provisions for meeting these needs. One other thing. There has been so much complaint about the alleged insufficiency of the Federal payment. Again, I point out that while our legislative committees, and the Congress, approved present authorization of a maximum of $32 million contribution, there has never been more than $30 million appropriated. That is within the determination of the Appropriations Committees, and obviously to date the District officials have not been able to persuade them or the Congress, that the Federal payment should be higher. Senator BIBLE. Thank you very much, Congressman. Representative HORTON. Mr. Chairman, I would just like to say this is my first hearing on this Subcommittee No. 6. I have just joined the subcommittee this year. I want to commend the statements of the chairman of the Senate committee: Senator Bible, and also the distinguished chairman of the subcommittee of which I am a member, and the decision of the distinguished chairman, Mr. McMillan, for having these joint hearings. From what I have read in the newspapers and from the little information that I have received it would appear that there is a fiscal problem that the District faces, and I think the willingness of the two committees to sit down together and hear what these problems are is one big step in the right direction to try to solve this problem. And I will do whatever I can as a member of this subcommittee to try to help solve these problems, and I think this is a good way in which the problems can be attacked. And I certainly want to assure all of those who are interested that as a member of this subcommittee I will do all I can possibly do to try to help solve these problems both in the committee and on the floor of the House. Senator BIBLE. Thank you very much. Representative HARSHA. Mr. Chairman, I have no statement at this time. I would like to reserve it until later. Senator BIBLE. Thank you very much. Mr. Reporter, at this time in the record I would like to incorporate a letter from Senator Beall. He hopes to be here. He has been out of town. He hopes to be here for part of the first hearings and will certainly join us tomorrow when we resume the hearing on the House side. (The letter referred to is as follows:) Hon. ALAN BIBLE, U.S. SENATE, U.S. Senator, Senate Office Building, May 28, 1963. DEAR SENATOR BIBLE: As you know it was necessary for me to be out of town on Monday, May 27, 1963, and I will not return to Washington until sometime during the forenoon on Tuesday, May 28, which is the first day scheduled for hearings before the joint Senate and House subcommittees on District of Columbia fiscal problems. Since I will be late and the possibility exists that I will entirely miss the first day of the hearings I will very much appreciate it if you will place the attached statement in the hearing record at an appropriate place at the beginning of the first day's testimony. With all good wishes, Sincerely, J. GLENN BEALL. STATEMENT OF SENATOR J. GLENN BEALL ON DISTRICT OF COLUMBIA FISCAL PROBLEMS In the consideration of budgets, realism is a virtue. When the law requires a balanced budget, it is a necessity. We must, therefore, this morning concern ourselves with realities. What are the realities in the District of Columbia with which we must deal? We must, of course, acknowledge the truism that this is a Federal city and that it owes its life, its beauty, and its problems, entirely and exclusively, to its Federal character. Its life is in its service to the country whose head and heart are here. Its beauty is all about us in the plan of L'Enfant and the edifices which house its governmental institutions. Its problems result from its attraction to those who desperately seek the realization of the promise of America here in the head and the heart of the Republic. These are no less realities than the cold, hard figures of the revenue and expenditure estimates which will concern us at this hearing. This city has become as was inevitable-the distillation of the American urban dilemma. It is not necessary to repeat the sad statistical litany of our social and governmental failures. We are all too intimately familiar with the problems of crime, illegitimacy, school dropouts, and delinquency. Everyone is aware that in some of these fields we have the sad distinction of leading the country. In all of them, we rank too high. But other American cities are experiencing the same troubles. Ours are not unique, they are only more concentrated. When we wrestle with our fiscal problems in the days that will follow these joint hearings, it is my hope that we will recall these realities and that we will face up to their challenge with a responsible program which has as its core a more than adequate Federal payment. It appears clear that there is no short-range solution to the many problems besetting this city. It would, therefore, seem appropriate at this time that we attempt some action which will enable the District government to make longrange plans over the next few years in a new atmosphere of fiscal stability. Mr. Chairman, I am very much heartened by the many proposals which we are considering today. By their number alone, they express the sincere efforts of the Members of both Houses to find a solution which is sensitive, as well as sensible. In closing, I wish to commend you, Chairman McMillan and Congressman Whitener, for arranging these joint hearings which I feel offer much hope for the citizens of the District of Columbia and this country. Senator BIBLE. I would also like to include in the record a letter from Senator Morse endorsing S. 871 and H.R. 4592. (The letter referred to is as follows:) Hon. ALAN BIBLE, U.S. Senator, Washington, D.C. DEAR ALAN: It is my earnest belief that S. 871 and H.R. 4592, which provide for the Federal Government's fiscal contribution to the District of Columbia to be based on a formula as set forth in the bill, which increase the level of borrowing authority by the District from the U.S. Treasury, if enacted by Congress, would mean a major breakthrough in helping to resolve the numerous critical problems facing the Nation's Capital for many years to come. I wholeheartedly support title I of the bill which authorizes an annual Federal payment based on a formula consisting of the amount of taxes the District would obtain if the property owned and used by the Federal Government were taxable. This procedure more accurately measures the Federal responsibility to the Capital of the Nation. Title II of the bill authorizing an increase in borrowing authority is a major step in the right direction. However, in my judgment, it does not go far enough in assuring that adequate funds will be available to meet the city's critical school crisis. In my opinion, Congress must take immediate steps to curtail the very serious school crisis and I believe that the borrowing authority proposal I offered in the Senate last year would certainly help alleviate the school crisis. 99550-63- -2 Since I am unable to attend your joint hearings on these important matters, I would appreciate very much your reading my views into the hearing record. With warmest personal regards. Sincerely yours, WAYNE MORSE. Senator BIBLE. I would like to ask that you incorporate in the record a copy of S. 871 and a letter from President Kennedy requesting the introduction of the bill. (S. 871 and the letter referred to are as follows:) [S. 871, 88th Cong., 1st sess.] A BILL To provide for increased Federal Government participation in meeting the costs of maintaining the Nation's Capital City and to authorize Federal loans to the District of Columbia for capital improvement programs Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That title I of this Act may be cited as the "District of Columbia Payment Authorization Act". TITLE I-FEDERAL PAYMENT SEC. 101. In recognition of the unique character of the District of Columbia as the Nation's Capital City, regular annual payments are hereby authorized to be appropriated from revenues of the United States to cover the proper Federal share of the expenses of the government of the District, and such annual payments, when appropriated, shall be paid into the general fund of the District. The annual payment authorization shall consist of an amount computed by the Commissioners, as of the beginning of the fiscal year preceding the fiscal year for which the request for payment is being made, equal to the sum of— (A) the amount of the real property taxes lost to the District, based upon the assessed value and rate of tax then in force, as a result of the exemption from real property taxation of the following properties: (i) real property in the District owned and used by the United States for the purpose of providing Federal governmental services or performing Federal governmental functions, but excluding parklands, museums, art galleries, memorials, statuary, and shrines, and also excluding, to the extent to which it may be so used, property owned by the United States and used to provide a service or perform a function which would otherwise be provided or performed by the District, such as, by way of example and without limitation, public streets and alleys and public water supply facilities; (ii) real property in the District exempt from taxation by special Act of Congress or exempt from taxation pursuant to subsection (k) of section 1 of the Act approved December 24, 1942 (56 Stat. 1089), as amended (sec. 47-801a (k), D.C. Code, 1961 edition), and not eligible for exemption from taxation under any other subsection of said section 1 of the Act approved December 24, 1942; (B) the amount of personal property taxes lost to the District based upon the assessed value and rate of tax then in force, as a consequence of the exemption from personal property taxation of tangible personal property located in the District and which is owned by the United States, exclusive of objects of art, museum pieces, statuary, and libraries. Tangible personal property located in the District owned by the United States may be estimated by one or more methods developed by the Commissioners; (C) the amount obtained by multiplying the actual collections in the second preceding fiscal year of corporation and unincoporated business franchise taxes and taxes on insurance premiums and on gross earnings of fiancial institutions and guaranty companies by a fraction the numerator of which shall be the total number of Federal Government employees whose places of employment are in the District as estimated by the United States Civil Service Commission and the denominator of which shall be the total number of other employees whose places of employment are in the District, as estimated by the United States Employment Service for the District, but excluding employees of the government of the District, employees in nonprofit activities, and domestics in private households, also as estimated by such Service. SEC. 102. (a) The Commissioners shall, in consultation with the Administrator of General Services, annually compute the amount of the Federal payment authorized to be appropriated under this title and the amount of such authorization so computed shall be submitted to the Congress along with any request for appropriation of such payment. (b) For the first fiscal year in which this Act is effective, the amount of the annual payment authorized to be appropriated under this title may be computed by the Commissioners on the basis of preliminary estimates: Provided, That such amount shall be subject to later adjustment in accordance with the provisions of this title. SEC. 103. Article VI of the District of Columbia Revenue Act of 1947, as amended (61 Stat. 361; sec. 47-2501a and 47-2501b, D.C. Code, 1961 edition), and title I of the District of Columbia Revenue Act of 1939 (53 Stat. 1085; sec. 47-134, D.C. Code, 1961 edition) are hereby repealed with respect to fiscal year 1964 and subsequent fiscal years. TITLE II-AUTHORIZATION FOR LOANS FROM THE UNITED STATES TREASURY SEC. 201. Subsection (b) of the first section of the Act approved June 6, 1958 (72 Stat. 183; sec. 9-220 (b), D.C. Code, 1961 edition) is amended to read as follows: "(b) To assist in financing the cost of constructing facilities required for activities financed by the general fund of the District, the Commissioners are hereby authorized to borrow from the United States Treasury and the Secretary of the Treasury is hereby authorized to lend to the Commissioners such sums as may hereafter be appropriated. No loan made pursuant to this subsection shall cause the aggregate indebtedness of the District payable from the general fund to exceed 6 per centum of the average of the aggregate assessed values (as of the first day of July of the ten most recent fiscal years for which such assessed values are available) of (1) the taxable real and tangible personal property located in the District, and (2) the real and tangible personal property referred to in paragraphs (A) and (B) of section 101 of the District of Columbia Payment Authorization Act, the values of which shall be computed in accordance with the applicable provisions of such Act. Any appropriation for a loan under this subsection in any fiscal year must first be specifically requested of the Congress in the budget submitted for the District. Such loans when advanced shall be deposited in the Treasury of the United States to the credit of the general fund of the District." SEC. 202. Subsection (f) of the first section of such Act approved June 6, 1958, is hereby repealed. TITLE III-GENERAL PROVISIONS SEC. 301. DEFINITIONS.-As used in this Act, the word "Commissioners" means the Board of Commissioners of the District of Columbia, or their designated agent, and the word "District" means the District of Columbia, either as a territorial area, or as the government and municipal corporation of that name. SEC. 302. EFFECTIVE DATE.-This Act shall take effect with respect to fiscal years beginning on and after July 1, 1963. Hon. LYNDON B. JOHNSON, FEBRUARY 11, 1963. DEAR MR. PRESIDENT: I transmit herewith a proposed bill to provide for increased Federal Government participation in meeting the costs of maintaining the Nation's Capital City and to authorize Federal loans to the District of Columbia for capital improvement programs. The message which I sent to the Congress on January 18, 1963, transmitting the District of Columbia budget, explained the current crisis in the financial affairs of the District, and set out in some detail my proposal for both an immediate and a longer range solution. The proposed bill would implement two elements of my proposal-the increase in the authorization for the Federal payment to the District, and the authorization of additional borrowing from the Treasury. The District Commissioners, who have cooperated in the development of this proposal and in the preparation of this draft bill, have moved promptly to implement the third element-the increases in local taxes. A major portion of these increases will also require legislative authorization. A draft bill for this purpose will be submitted to the Congress by the Commissioners. Title I of the enclosed draft bill, which deals with the Federal payment to the District, would authorize a payment based on a formula reflecting what the Federal Government would pay if it were a taxable entity. Under this plan, the details of which were set out in my budget message, the authorized Federal payment in fiscal year 1964 would be approximately $53 million. It is estimated to increase to $67 million by fiscal year 1969, by reason of the estimated increased ownership and use of property in the District by the Federal Government, the anticipated increased level of local tax rates, and the expected increase in property values. Title II of the proposed bill, which deals with the additional borrowing authority, proposes to authorize the District to borrow for general fund purposes from the Treasury up to 6 percent of the assessed value of real and personal property in the District. Under this proposal, a discussion of which was included in my budget message, the maximum general fund debt limit will be approximately $225 million in fiscal year 1964, and will rise to an estimated $275 million in fiscal year 1969. Taken together with the increases in local taxes which are being proposed by the Commissioners, the proposed bill will not only resolve the immediate urgent needs of the District, but will also relieve the District's general fund financial problems for some years in the future. For fiscal year 1964, authorization of additional appropriations for both the annual payment and capital loans is an essential prerequisite for meeting even the minimum needs of the Districtfor education, for welfare and health, for public safety, and for capital improvements. Activities of the Federal Government make large and increasing demands upon the District for space, facilities, and services. The Government has an obligation to share fairly the District's burden in meeting the demands made upon it. Proper development of the Nation's Capital requires adequate financial resources, and I believe that enactment of this draft legislation is essential to the achievement of this objective. I therefore hope that early hearings will be held, and urge that favorable action be taken by the Congress on this important legislation. Sincerely, JOHN F. KENNEDY. Senator BIBLE. I would also ask that copies of House bills H.R. 4275, H. R. 4277, H.R. 4592, H.R. 4593, H.R. 4594, H.R. 4595, H.R. 4596, H.R. 4597, H.R. 6125, and H.R. 6177 be incorporated in the record. They are introduced by various sponsors on the House side, including, Congressman Whitener, bills that have been introduced by you, and by Congressman McMillan, Congressman Multer, Congressman Schewengel, and others. I think that is the entire series of bills that deals with the financial problem of the District of Columbia. If there are other bills that have been introduced we will ask that they be likewise incorporated at this point in the record. (The bills are as follows:) [H.R. 4275, 88th Cong., 1st sess.] A BILL To amend section 2(a) of article VI of the District of Columbia Revenue Act of 1947 relating to the annual payment to the District of Columbia by the United States Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That subsection (a) of section 2 of article VI of the District of Columbia Revenue Act of 1947 (D.C. Code, sec. 47-2501b) is amended by striking out "and the sum of $21,000,000 for the fiscal year 1959 and for each fiscal year thereafter" and inserting in lieu thereof the following: "the sum of $21,000,000 for each of the fiscal years 1959 through 1963, inclusive, |