HOME RULE HEARINGS

WEDNESDAY, AUGUST 25, 1965

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE No. 5,

OF THE COMMITTEE ON THE DISTRICT OF COLUMBIA,

Washington, D.C.

The subcommittee met, pursuant to recess, at 10:35 a.m., in room 1310, Longworth House Office Building, Hon. Basil L. Whitener (chairman of the subcommittee) presiding.

Present: Representatives Whitener (chairman), McMillan, (chairman of the full committee), Dowdy, Fuqua, Grider, Horton, Nelsen, and Broyhill.

Also present: James T. Clark, clerk; Hayden S. Garber, counsel; Donald Tubridy, minority clerk; and Leonard O. Hilder, investigator. Mr. WHITENER. The subcommittee will come to order. We will ask Congressman Sickles to favor us again with his presence. Yesterday I believe Mr. Dowdy was in the process of interrogation.

STATEMENT OF HON. CARLTON R. SICKLES, A REPRESENTATIVE IN CONGRESS AT LARGE FROM THE STATE OF MARYLANDResumed

Mr. Dowdy. Mr. Chairman, do not hesitate to interrupt if you feel you should amplify on anything that I might be lax in developing. If there is anything you might feel may be more clearly understood, please feel free to let me know.

Now, yesterday we were talking about, among other things, property taxes and the tax formula that would be set up in these bills. I believe I was asking about what percentage of the property tax was going to be chargeable to the general taxpayer of the United States, for the District of Columbia. I do not believe you had answered that. Mr. SICKLES. I am not sure at this point that I understand your question.

Mr. DowDY. Well, how are you going to determine what percentage of the property tax collected by this new political subdivision that you would create is going to be chargeable to the general taxpayers of the United States?

Mr. SICKLES. I would say that that amount of money which is paid to the District of Columbia out of the Federal Treasury under section 741(a)(1)(A) (i), (ii), and (iii)—which is the formula we have used as a measure of payment-that that part which comes out of the Federal Treasury, that the source of those funds will be all the general tax sources of the Federal Government.

So, to the extent that this contributes to a portion of the District of Columbia budget, that percentage will apply. Now, what percentage it will be now or in the future will depend upon the ingredients in the formula, how many public buildings, and how much Federal property and personal and real property there is.

This percentage relationship of the other taxes, the fraction that is used for payment of unincorporated taxes, would depend upon what the other real estate in the District is, or the other personal property, what the other taxes are, so that it would fluctuate.

It would seem to me you can't just say it is a given percentage in any given year, but we must determine the percentage as we move forward. Mr. DOWDY. Surely you have some idea about this, if you understand the bills and frankly, I do not; that is the reason I am asking the question about this tax formula. Is it going to be in proportion to the amount of land that is in the Federal Government's hands, or how are you going to arrive at it?

In other words, if I were the proponent of a bill of this nature, I would at least have some idea about what was going to be done with it. Mr. SICKLES. Perhaps if I understood your question a little better, 1 could be more responsive to it. I don't say that you are not stating it properly, but perhaps I don't understand it.

Mr. DOWDY. All right. What percentage of the land in the District of Columbia is owned by the Federal Government now?

Mr. SICKLES. I do not have that figure at my fingertips.

Mr. DOWDY. Well, is that going to have anything to do with the amount of taxes that you are going to take from the general taxpayers of the United States, to run this political subdivision you are setting up?

Mr. SICKLES. No; not in itself.

Mr. DOWDY. Well, what are the factors by which the tax would be reckoned? That is what I want to know.

Mr. SICKLES. It is the assessment of the property that is owned by the Federal Government-there are three parts to it. The one that affects real estate is the assessment of the real estate which is owned by the Federal Government within the confines of the District of Columbia.

This is going to fluctuate as time moves ahead. It is a variable formula. It is not a dollar amount; it is a variable formula as you move forward.

If you acquire additional properties and there is a change in the assessment of the value of the property, it is going to change. It is not a flat dollar amount. This is a method of measuring the amount of Federal contribution.

It could be, say, 25 percent in 1 year over a 10-year period, and it might move up to 50 percent, or it could move down to 30 percent. Mr. Dowdy. Or on up to 100 percent, hopefully, I suppose.

Mr. SICKLES. No. I think that you impute some sort of intention here which is certainly not mine.

Mr. DOWDY. Well, could not all of this problem facing us on this one issue and I think it is one of the most serious ones in the whole proposal-be eliminated by retaining all of the federally owned property in the control of the Federal Government, and releasing the rest of it? Then we would not have this problem.

Mr. SICKLES. I think that you could do as you say, and pull it all out. But you would just generate a lot of other problems, it seems

to me.

Mr. DowDY. That would be a problem of the self-governing people, then, and they could not complain about anything that Congress or the Federal Government is doing. That would be their problem and theirs alone; would it not? The Federal Government would continue policing and governing the Federal property, which they ought to do, anyway. Do you not think that is a good idea?

Mr. SICKLES. No, I think what you are doing then is sort of artificially removing, really, what is the major purpose for the existence of the city, and the major industry that we have in the city, which is the Federal Government.

Mr. Dowdy. Do you call the Federal Government an industry?

Mr. SICKLES. Well, I think in the context of the reason for this community, you can use the analogy. I do not think that in its purer sense it would fit the definition of industry. But in the sense that other major cities do have a large industrial complex upon which they base their being, I think that most people in its loosest sense, have considered the Federal Government as the industrial base for this metropolitan

area.

Mr. Dowdy. I think a great deal of what you said yesterday and have said today is an argument for the continuation of the government of the District of Columbia by the Federal Government. You say it is a unique city, and for that reason should have the right to participate in the funds in the Federal till to govern itself.

It seems to me that is a complete argument for retaining jurisdiction of the city, or at least the part of it that is necessary for the Federal Government, under the control of the Federal Government.

Mr. SICKLES. I think it is a good argument for insuring that the Federal interests will always be protected, but I do not think it is an argument against delegating certain of its functions to the local citizenry so that they can handle it themselves and, I think, and up in a more responsive and better local situation and local government as a result of it.

As long as we retain in the Congress and in the President the safeguards that we have in this bill, I would not come to the same conclusion that you do.

Mr. Dowdy. Are you familiar with, or have you ever read the early history of the United States, telling how, whenever the Capital was attempted to be established in a city separate and apart from the Federal Government, the troubles they had, the crowds around, and the mobs milling around it to try to force the Continental Congress, or the early Congresses to take action that they wanted?

Mr. SICKLES. I am certainly familiar with it, but I do not think that what happened back in those days is in any way analogous to the situation that we have today, and I have no fear of that.

Mr. DOWDY. Well, remembering just 2 or 3 weeks ago, if the Congress of the United States and the White House had had to rely upon the whim of some locally elected official to keep the mobs from taking over, I think it would have been the same situation we had nearly 200 years ago.

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Mr. SICKLES. I do not think there is anything about this bill that would preclude the Congress or the President from taking appropriate action of this kind, in regard to any kind of demonstration situation. I do not think there is anything about the bill which infers that the local people would elect officials that would not be responsive to protecting good law and order. I have no fears with respect to that.

Among other things, we have our own Capitol police already, as a matter of law. There are other enclaves of Federal policing-Ï think the Smithsonian is one of them, of which I am sure you are awareand if anybody felt that that were a major problem or it developed as a problem, these things could be established or not established. I do not look to the time when they would have to be.

But we are not giving up anything, in the sense of losing our exclusive control here. What we are doing is delegating certain functions to the local city.

Mr. DOWDY. You mentioned that it was a unique situation, and I have talked about taxes a little bit. Would it not be a really unique situation to give to a municipal subdivision the authority-and that is what the plan is, as I understand it-to tell the general taxpayers and Federal Treasury how much money they want, and then give them authority along with it to stick their hands in the till and take out whatever amount they want, just as assessing on anybody else's property? Do you not think that is rather too much authority to give such a political subdivision in view of this old axiom that "the power to tax is the power to destroy"?

Mr. SICKLES. I do not see anything about this bill that is going to bring about the destruction of the Treasury of the United States. I think that it is going too far to describe this in terms of putting the hands of the folks of the District of Columbia into the till of the Federal Treasury.

What we are doing is trying to establish a reasonable formula, a basis upon which a contribution can be made on behalf of the Federal Government to help run the local government. Now, what happened in the past is that this principle has been established. We have set the rate, a flat rate here, so that the principle has been established for a long time.

Mr. DOWDY. That principle is on the theory that this city is run by the Federal Government, and naturally and properly should make some contributions for running it.

Mr. SICKLES. That principle, it seems to me, was established on the theory that because of the fact that the Federal Government is here, we do not have another basic major industrial basis, and that the Federal Government should in effect pay its part as far as the cost of local government is concerned.

I do not think that just because we did not have this albeit limited type of local government, it is really material to whether there should be a Federal contribution or not.

I think that all this does is establish a formula, as I tried to indicate yesterday, some basis upon which the payments could be made.

I would suppose that some time in the future it could be reviewed, even modified or changed, maybe increased or maybe decreased. But we do not give the control to the city officials who may be elected under

this bill. What we do is establish a formula. We are saying that once we have determined what the assessable base is for the Federal buildings, with certain exceptions here then you apply your local tax rate to this property as well as to the other property.

It seems to me it is a very reasonable thing to do, because it will fluctuate. As the assessable base changes, it would change the amount of contribution we would pay.

Mr. Dowdy. And as the tax rate changed.

Mr. SICKLES. And as the tax rate changed as applied to all property. Mr. DowDY. I am quite sure that most States are very envious of the District of Columbia rate, which I understand is $2.70 a hundred. In my State, for instances, the tax rate for combined governmental units runs between $4 and $5 a hundred, depending on the area and the special assessment by the political subdivision. In some large cities of comparable size, the tax rate for a city is probably $2.50, $1.50 for the schools, and the State rate is about 80 cents, plus any special assessment for any other subdivisions with power of taxation.

Do you suppose that under a system such as you are proposing to set up, the local taxpayers could continue to enjoy this almost, you might say, nominal tax rate in comparison to the various States which run twice as much?

Mr. SICKLES. Well, I do not know that it is nominal. But I would assume that the local citizenry should be prepared to pay what is a reasonable tax rate. However, that does not mean to me that it is going to be raised tomorrow.

I would recognize, as you do, that the cost of government on the municipal level is increasing, and I would assume that there would be the proportionate increases in cost of local government here that we have seen and will continue to see in other major cities.

But I would feel that we should continue to provide for a Federal contribution of a reasonable share, so that it would not be an artificial thing, and that the rate would have to go up dramatically, because we would fail to continue to pay a reasonable Federal share. That is the only purpose of this formula.

Mr. DowDY. You say that Congress would retain all of its power under this bill. Let us take a hypothetical case and see if that be true. Let us say Congress considers a bill affecting the District of Columbia and fails to pass it in either or both of the Houses.

The local legislature is set up in the new municipal subdivision. The local legislature could enact the same bill, and it would become law, even if Congress failed to pass it.

I do not know whether that is in line with the intent of the Constitution; that a local body may enact something which Congress has refused to enact.

In any event, where the Congress had refused to enact a bill, and then your local legislature did enact it, it would require a two-thirds vote of both Houses of the U.S. Congress to override this, on an issue which otherwise would never have been enacted into law.

Is that not taking away the power that Congress has?

Mr. SICKLES. How do we get the two-thirds? Where do we get to that?

Mr. Dowdy. Well, I understand in this bill-maybe I am wrong. You are supposed to know what is in the bill.