Letter to the President of the Senate and to the Speaker of the House Transmitting Bill Relating to the District of Columbia Budget

Dear Mr. President: (Dear Mr. Speaker:)

I transmit herewith a proposed bill to provide for increased participation by the Federal Government in meeting the general governmental costs of the District of Columbia and to authorize additional Federal loans to the District for capital improvement programs.

The basis for the proposed bill is set out in the message which I sent to the Congress on January 21, 1965, transmitting the District of Columbia budget. The bill is intended to implement two of the three parts of my proposed fiscal program for the general government of the District. implementation of the third part--the increases in certain local taxes, some of which require legislative authorization-will be proposed in a draft bill which the District Commissioners will shortly submit to the Congress.

Title I of the enclosed bill deals with the Federal payment to the District. It would establish an authorization based essentially on a formula designed to reflect the amount the Federal Government would pay toward the general governmental expenses of the District if it were a taxable entity. Because the formula is related to both local tax rates and the size of the Federal establishment within the District, the authorization would change upward or downward as changes occurred in local tax rates and property values, and in the size and extent of the Federal establishment. As my budget message states, this formula would produce an authorization in fiscal year 1966 of approximately $57 million, and changes in the several components of the formula are estimated to increase the authorization to approximately $75 million by fiscal year 1971.

Title II of the draft bill deals with the authority of the District to borrow for general fund purposes from the Treasury. In place of the present fixed sum authorization, which must be renewed when it is exhausted, the bill would establish a debt limit similar to that established for most State and local jurisdictions, but fixed conservatively at only six percent of the assessed value of real and personal property in the District. Under the proposal the limit would be approximately $233 million in fiscal year 1966, and it is estimated that it would rise to approximately $293 million in fiscal year 1971.

At the same time that the Federal Government is enlarging its demands on the District for space, facilities and services, the District finds itself needing additional resources to meet its current requirements, and to catch up on its program of capital improvements. The District is making progress, but enactment of this legislation is essential to the proper assignment between the Federal Government and the local citizens of the responsibility for providing the necessary funds.

I hope that hearings on the bill can be held promptly, and that the Congress will give it early approval.

Sincerely,

LYNDON B. JOHNSON