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The city requested funds for seven such service centers in 1969 and for three in 1970, but Congress rejected the requests both years as smacking of ward politics. No funds were requested this year.

The $605,244 in HUD money, secured under the 1965 Housing and Urban Development Act, which provides for such centers in 14 cities, will pay for construction of a two-story brick headquarters building. It will be located at the southeast corner of 5th and K Streets, SE.

The building will house a community mental health program, services for the aging, employment and vocational counseling, a day-care center, a legal aid office, an auditorium, a City Council office, a corrections office for parole operations, a Juvenile Court worker, space for the city's roving leader program. A 26-car parking area is planned outside.

The mayor's proposal, sent to HUD in June, 1969, said the project would be "a major step in the District's effort to demonstrate what can be done to change the level of life in public housing communities.

The 473.6-acre housing project is located between the Southwest Freeway, which residents call "the great Chinese Wall" because it separates the area from Capitol Hill, and the Anacostia River in near Southeast.

The center is designed to serve a population of 10,00 to 15,000, including some residents outside the project.

In the 1960 census, 40 per cent of the Capper housing tenants earned less than $3,000, compared to the city average of 17.5 per cent.

A $50,000 Interior Department grant will pay for the street recreation area, which will include a community Christmas tree, a kiosk, several ball fields, paly equipment and a picnic area.

Mr. CABELL. I think that we will probably have time, if the Committee sees fit, to have the statement from Mr. Back that we would like before we have a quorum call.

Mr. WASHINGTON. We would appreciate that. That is the technical term.

Mr. NELSEN. Mr. Chairman, I am just curious.

Going back to Earth Day, I was quite pleased that suddenly we had a stimulating concern about our ecology, but I was highly disappointed to see the park full of milk cartons, refuse of all kinds, soft drink cans, and what have you. How much did it cost to clean up after the Earth Day show?

Mr. WASHINGTON. That may have been a small one. I don't think that I have that figure here with us. If it gets under $20,000 or thereabouts we sort of absorb it. I will be able to give it to you if you wish. I had some concern about that myself.

Mr. NELSEN. I wanted to recommend to them next time we get on an ecology kick let's practice what we preach.

Thank you.

Mr. CABELL. If you will suspend for just a moment.


Mr. ABERNETHY. Mr. Mayor, I want to ask a question about your increase in the gasoline tax.

I believe you gave us the rates in Virginia and Maryland. I may be wrong about this but in the stops that I have made, the stops in those areas, the gasoline is higher than it is in the District of Columbia. I am sure that there are others who have noted such. If you increase the gasoline tax, have you given any consideration as to whether or not the people working in the District going back to Maryland and Virginia in the afternoons might discontinue their purchase of gasoline in the District?

Mr. WASHINGTON. We have given some consideration to it. I don't think they would buy much here anyway.

Mr. ABERNETHY. I think they do. I have noticed stations in my own neighborhood, cars fill those stations every afternoon going back to Maryland. I just suggest that to check it out before we raise this



Why do we continue the operation of D.C. Teachers College since the opening of the Federal City College? Why can't those two institutions be consolidated?

Mr. WASHINGTON. There has been, as you know, a good deal of discussion on this subject. Actually, when Federal City came into being there was some sort of a compact. I believe

Mr. ABERNETHY. D.C. was supposed to go out?

Mr. WASHINGTON. It was supposed to go out. What has delayed it is a comprehensive study that is now being proposed on higher education that will set the parameters and set the conditions. Actually, if we tried to put them together now in terms of the housing facilities, that is just the buildings for the schools, we wouldn't achieve very much anyway. We are now

Mr. ABERNETHY. My comment is no reflection on you. I don't want you to misunderstand that. But the comprehensive study appears to me to have become too comprehensive. It has been underway now for how long, three or four years?

Mr. WASHINGTON. Three, about four months.

Mr. ABERNETHY. When did we open Federal City College?

Mr. WASHINGTON. We opened that three years ago. There was discussion at that time of the possibility of putting those two schools together. The boards of higher

Mr. ABERNETHY. I understand the situation, that positively it was to be a consolidation of the two. Maybe my understanding is wrong


One other question. It is being proposed that D.C. Transit become a public ownership utility. If the City can not raise money now to carry on its own activity how is it going to raise additional money to subsidize the transit system when it takes it over?

Mr. WASHINGTON. We are subsidizing it now to a degree by our own revenue package.

Mr. ABERNETHY. Is the school?,


Mr. ABERNETHY. You propose it would be further subsidized?

Mr. WASHINGTON. I would propose it be further subsidized under public ownership and I think that that would certainly be generated out of our same revenue.

Mr. ABERNETHY. I thought you were out of revenue?

Mr. WASHINGTON. I am speaking either to the Federal payment or some other form in order to provide a

Mr. ABERNETHY. You are going to pass that on to the nation? Mr. WASHINGTON. Well, the point is that if the nation is certainly going to inure benefit from the acquisition of the property, and I am not saying fully that

Mr. ABERNETHY. What benefit could the acquisition of that property be to the people out in the State of Minnesota where Mr. Nelsen lives?

Mr. WASHINGTON. They would ride on it when they come here. Mr. ABERNETHY. That is true, but they won't get here very often. Mr. WASHINGTON. They are coming in pretty substantial numbers, Mr. Abernethy.

Mr. ABERNETHY. The impression would be that a person outside the District would ride cheaper by virtue of the fact that the District of Columbia owns it and getting money from the Federal Government to pay for it?

Mr. WASHINGTON. It may not be entirely the Federal Government in this sense. I gave you one response in terms of what is a possibility. By that time, by the time of acquisition, it may very well be that an added fund either from the gasoline tax may be raised in order to offset it. I am not just sure.

Mr. ABERNETHY. Do you think the D.C. Government can run it cheaper and more efficiently than the present ownership?

Mr. WASHINGTON. I think that it can be run more effectively and I think that if we come down to the point where we are going to subsidize even to the point of the school children, that that subsidy should follow public ownership.

Mr. ABERNETHY. Who is going to run it for the District?

Mr. WASHINGTON. I would think that the subway system, subway organization, WMATA, in order to consolidate it.

Mr. ABERNETHY. The average business in the District of Columbia pays taxes on its real estate, and if incorporated, it pays taxes on corporate tax. Then those that work for it pay an income tax. Then they also pay a sales tax.

Mr. WASHINGTON. Yes, sir.

Mr. ABERNETHY. What businesses are exempt from any of those taxes?

Mr. WASHINGTON. Businesses are not exempt unless they are nonprofit.

Mr. ABERNETHY. Sitting here at this table representing the news media

Mr. WASHINGTON. Unless they are nonprofit.


Mr. ABERNETHY. You recommended two years ago that the sales tax be applied to advertising. That is what they sell, advertising. Do you feel that that recommendation is as good today as it was two years ago?

Mr. WASHINGTON. I do, indeed.

Mr. ABERNETHY. I do, too. I think we ought to do something about it.

That is all.

Mr. CABELL. Thank you.

Members of the Committee, inasmuch as there is a quorum call in progress at the moment, this Committee hearing will be recessed until ten o'clock Thursday.

Mr. BROYHILL. Before you adjourn, Mr. Chairman, I should like to point out to the Commissioner that we have not had a sufficient exchange yet on this proposed reciprocal tax. We have a lot more to talk about on that subject at a later session, Mr. Chairman, in order to clarify the picture a little more.

Mr. CABELL. I am sure the question will be raised.

Mr. WASHINGTON. I didn't think we had a fair exchange on anything yet.

Mr. ABERNETHY. May I ask on that point that the Mayor and Mr. Back be in a position when we reconvene to advise the Committee how much income tax you are losing to employees of the District Government who do not live in the District but live outside. How much income would you receive from them if the tax was applied?

I am not speaking of non-District employees but only of people who make their living in the District Government and make no contribution to it whatsoever.

(Subsequently the following information was furnished the Committee:)


It is not possible to state accurately the amount of revenues which would result if the District of Columbia individual income tax were extended to apply to the income of D.C. government employees who are not residents of the District and therefore are not subject to the D.C. individual income tax under present law. The amount of revenues generally would depend upon a variety of factors not only income level, but also the extent of deductions and exemptions for which the individual is eligible.

An estimate of the amount of revenue which would result from non-resident employees, should the reciprocal income tax proposal be enacted, is $8 million. The problems inherent in making this estimate should be kept in mind when examining the impact and relevance of this statement. There is a voluntary procedure by which Virginia and Maryland residents may withhold funds from their District earnings in order to pay their tax liability to the States of Maryland and Virginia. To derive an accurate estimate would require two conditions. First, each nonresident employee would have to choose to withhold taxes. Second, the amount of money withheld would have to be equal to the amount of the taxpayer's liability to the District of Columbia. Thus, the total amount withheld from all nonresident employees would equal the potential revenue yield. Neither of these conditions prevail. Even if all employees are presently withholding taxes, the rate of withholding is sure to be closer to the tax liability they actually must pay, that is, to their home state. Nonetheless, the $8 million estimate is made, using the amount of withholdings and making certain adjustments necessary due to the differential tax rates between the States of Maryland and Virginia and the District of Columbia.

Source: Office of Budget and Executive Management July 2, 1971.

Mr. CABELL. We stand recessed until ten o'clock Thursday morning. (Whereupon, at 12:10 p.m., the Subcommittee adjourned, to reconvene Thursday, June 10, 1971, at 10:00 a.m.)

(The following tabulations were received for the record:)

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