Money for paying the salaries of police while on duty directing traffic-approximately $3 million per year-was formerly taken from the general fund. As a result of our representations, the District of Columbia Commissioners transferred this item to the revenues derived from the gasoline tax.

No. 4, the figures are in error so I would like to change paragraph 4 completely, to state that approximately $5 million is taken from the general fund for use by the highway fund. We believe that the highway fund should be restricted to activities paid for by the gasoline tax revenue and Federal grants.

Now five, for the operation of the National Zoological Park, the fiscal 1967 estimate is $2,009,100. This money is appropriated from the District of Columbia general fund and then transferred to the U.S. Department of Interior for administration. Since the zoo is under the control of the Smithsonian Institution and the Department of the Interior, and is a national, not a District, activity, we think this cost should be transferred to the budget of the Department of the Interior.

That would require special legislation by the Congress to make that transfer possible.

No. 6, for the operation of the National Park Service, to pay salaries of park police, care of lawns, shrubbery trees, et cetera, and roadways, approximately $4,744,400 will be appropriated in fiscal 1967 from the District of Columbia general fund and transferred to the U.S. Department of the Interior.

I should add, of that amount $32,000 is charged to the highway fund and the rest to the general fund. The District of Columbia is the only political entity in the United States which is required to pay for the care and operation of national parks within its territory. We think this is a discrimination against the District of Columbia which cannot be justified and that this item also should be transferred to the budget of the Department of the Interior. The figure above does not include money for recreational activities in the National Capital parks.

We therefore urge you to approve legislation which would:

A. Authorize the borrowing of $265 million over the next 5 years for capital outlay projects for the public schools, to be amortized over a 30-year period following the loan from the U.S. Treasury, with provisions for payment of proper interest charges.

B. Authorize the borrowing of $40 million over the next 5 years for capital outlay projects for the Sanitary Engineering Department, to be amortized over a 30-year period following the loan from the U.S. Treasury, with provisions for payment of proper interest charges.

C. Require that costs of salaries of police while on duty directing traffic and costs of operating traffic signals at street intersections be paid from gasoline tax revenues and not from the District of Columbia general fund.

D. Authorize the transfer of the costs of maintaining and operating the National Zoological Park to the budget of the U.S. Department of the Interior.

E. Authorize the transfer of the costs of maintaining and operating the National Capital Park Service to the budget of the U.S. Department of the Interior.

If these legislative actions were approved by the Congress, the District of Columbia general fund for fiscal 1967, would have the following amounts freed for other uses:

If these actions were approved, all the items in the fiscal 1967 budget could be cared for-plus approximately $21 million more for school capital outlay projects. This would obviate the need for many of the new taxes now being considered by you.

If the Highway Department were restricted to find financing by its gasoline tax revenues and Federal grants, that $47,431,300 would be increased by approximately an additional $5 million.

We suggest you give some consideration for the possibility of legislation that would make possible some of these changes in the budgetary activities of the District. The Appropriations Subcommittee cannot do that unless the necessary legislation is enacted by the Congress.

The CHAIRMAN. That is a very fine presentation. I appreciate it. You suggested some legislation which might free considerable money for the use of the District. I will ask the District to comment on this. A number of these have been suggested before. I think we should get the city's view on the maintenance of the National Zoological Park and the transferring of the maintenance.

Dr. HAWORTH. That would add about $6 million to the Federal budget which is now being paid for by the taxpayers of the District of Columbia.

The CHAIRMAN. We will ask Mr. Schuyler Lowe, who is here, to examine the proposals you have made.

Dr. HAWORTH. He did that for the statement I made.

The CHAIRMAN. He has made it as far as the amounts are concerned, but I am asking him to confer with his Commissioners and give us their viewpoints as to the suggestion you make. They are intriguing at first blush because they do free a good many millions of dollars. Dr. HAWORTH. I thought you would be interested in giving some thought to these suggestions.

With respect to the specific amendments provided under the various titles of this bill and its amendment, we have taken no specific position with respect to the various increased taxes therein, but we are on record, through action of our Board of Managers, as supporting a possible payroll tax on nonresidents of the District of Columbia on earned income, for working in the District of Columbia.

The CHAIRMAN. That has been suggested by a number of the witnesses and we will likewise ask Mr. Lowe and the District government to make their comment on that. This again is not a new item. It has been suggested to this committee every time a revenue bill comes forth. We would like to have their official opinion on this.

Dr. HAWORTH. We are also very much concerned about the question Senator Morse raised with earlier witnesses with respect to the impacted area aid affecting the District school system, and I am concerned about the implication of the President's recommendations with regard to that matter.

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One item that has not been considered by the President, I think, is the fact we have something over 3,400 children in our public schools at the present time who are of foreign parentage, most of them being children of families related to the various embassies in this city. If we take the figures Dr. Hansen gave you several days ago of about $590 per year, per pupil; those 3,400-plus children at $590 per child would represent a cost to the taxpayers of $2,017,800 which is being paid for by the District of Columbia taxpayers.

These foreign embassy families pay no taxes to the District, no sales tax or any other tax of that sort, and therefore represent a direct imposition on the District because of the burden which is caused by its being the National Capital. We think that ought to be considered by Senator Morse's committee when they consider the impacted area aid matter.

The CHAIRMAN. That is a very good point.

Dr. HAWORTH. We will be happy to present to Senator Morse's committee a statement relating to that.

The CHAIRMAN. The Senator from Oregon?

Senator MORSE. Thank you for your comments on the educational problems.

I expect the Congress of Parents and Teachers to continue to give us support on our school problems, not only of the impacted area problem but also the proposed cut in milk funds. I am all for providing milk for foreign tots, but I am also for providing milk for little boys in the District of Columbia. I suggest that the administration be as much interested in milk for domestic aid programs as for foreign aid programs.

I want to comment on your statement which I think was a very provocative statement and as the chairman has indicated to you, it is going to receive our careful attention and that of our professional staff on the committee too, as well as the District people.

If I were to pick a sentence out of your statement that I would like to emphasize over everything else in the statement and other statements that need emphasis, it would be the statement on the first page of your manuscript when you speak about the large amount that we need for schools. You say:

This large amount arises from several factors: an attempt to finance public school capital outlay projects on a pay-as-you-go basis (a policy not followed by any other large city in this country).

That needs to be underscored and underscored. You go on to say: The refusal of the Congress to appropriate funds on an annual basis sufficient to meet the needs of the public schools; an unexpectedly large increase in school enrollment in recent years; and the placing on the schools of responsibilities for services of a much more varied nature than many of the older school buildings were designed to render.

We are going to have to come to grips with that this year.

I was going to say that I have some "reservation" but I am going to say, "some work to do," in analyzing your point No. 5, the operation of the National Zoological Park. We have to decide whether or not the District of Columbia, as a city, should have a zoo or whether the Federal Government should have a national zoo here. I am having a little trouble with that.

I should think a city the size of Washington, D.C., would want a zoo, and we are sort of in a hybrid administrative situation here because of the overlap of Federal interest.

Dr. HAWORTH. We concede, Senator, that that item and No. 6 are open to question. But we felt that since we do not have home rule, and since these represent funds taken from the District taxpayers and administered by the Federal Government, there was a justification for saying that the Federal Government should put the money up.

Senator MORSE. That is what I was about to say. We can get some of these things resolved if we give you people the right to govern yourselves. But I do think this is just not automatically clear, that the Federal Government should take over the cost of operating the zoo, and we think of the municipal interest that the city of the District of Columbia, as a city, has in maintaining a municipal zoo. I do not know what the balance is. I just wanted to raise that caveat.

I feel the same about the parks. I think we have to draw a line of distinction here between what the District of Columbia would have as city parks if it were a self-governing city and what may be imposed. upon it by the Federal Government while it is not a self-governing city, to contribute in fact, as you point out in your statement, to the maintenance of what are really national parks.

I do not know what it is. We have to do research. I do not know if it is true of not that if you did not have this overlapping of jurisdiction, the city or the District of Columbia would maintain the same number or same quantity of parkland that is now maintained in the District of Columbia by both the city and the Federal Government. What we need to do, it seems to me, is get some evidence as to what is a fair amount of park territory for a city this size, taking into account that it is also the Capital City of the United States, and try to determine what a fair pro rata share of the cost of administering those parks is between the Federal Government and the District of Columbia.

So the point that you raised in your statement about the parks that I want to work on, have the staff work on is, is it a fair proportion of cost? I doubt whether or not they could all be transferred to the Department of the Interior.

But, maybe a case can be made for that. The question we have to get an answer to is: Are we really calling upon taxpayers to pay an undue share of the cost of park services of the District of Columbia thereby assuming what could very fairly be considered a Federal share? That is what I want the answer to.

Dr. HAWORTH. If your committee, Mr. Chairman, and Senator Morse's, can resolve some of these questions we will feel we have made a useful contribution to the community.

Senator MORSE. I am glad you raised the point.

The CHAIRMAN. The Senator from Maryland, any questions of Dr. Haworth?

Senator TYDINGS. Yes, sir. I would like to commend you on your statement, Dr. Haworth.

In your research to prepare this paper-you state there are no large cities in the country that attempt to finance school capital outlays on a pay-as-you-go basis-did you find out if there are any States in the country which attempt to support the capital program directly involving schools on a pay-as-you-go basis?

Dr. HAWORTH. I have not made a study of that so I cannot answer your question. There is a publication issued by the Bureau of the Census on State finances that is issued annually, that would

have information on the expenditures of the States for capital outlays of the States, for projects, and so forth.

I would have to study that to see how much of that is from current tax revenues and how much from bond issue.

The CHAIRMAN. The record is going to be kept open for a week so if you could supply that we would be happy.

Dr. HAWORTH. I will be happy to submit that information. (Information requested is as follows:)

SUPPLEMENTARY STATEMENT SUBMITTED BY DR. ELLIS HAWORTH, CHAIRMAN, LEGISLATION COMMITTEE, DISTRICT OF COLUMBIA CONGRESS OF PARENTS AND TEACHERS, RE H. R. 11487, NEW SOURCES OF REVENUE for the District of COLUMBIA

During the course of presentation of my original statement at the hearing conducted by Senator Bible, some questions were raised by members of the committee relative to whether any State or large city attempted to finance its capital outlay program on a "pay as you go" basis. In answer to these questions, I stated that I knew of no State or large city which financed its capital outlay program by such a method; that all the States and large cities financed a large part of their capital outlay programs by borrowing and amortizing the loans over an extended period of time.

To substantiate the above statements, I attach herewith tables taken from Bureau of the Census publications for fiscal 1964, covering the expenditures of all 50 States and all of the cities with a population of 500,000 or over, for capital outlay and the amounts borrowed for 1964 (for the States), or the amount of the gross debt for 1964 (for the large cities). These tables confirm the statements I made at the original hearing.

From figures given me by Mr. Schuyler Sowe, Director, Department of General Administration, District of Columbia government, if authority were given to borrow $265 million over a 5-year period for school construction projects, and this loan were to be amortized over a 30-year period, with interest at 4 percent, the annual cost would be a little over $16 million. This could easily be cared for by current revenues. Therefore, I hope that any borrowing authority granted will not be tied to any limitation as to a percentage of assessed real estate values, or other factors, but will be for the amount indicated by Dr. Carl F. Hansen, Superintendent of Schools, in his "model budget" submitted to Representative Roman Pucinski last January.

Source: Table 12 and table 3, Compendium of State Government Finances in 1964, State Finances, 1964 G-SF64-No. 2), Bureau of the Census.