[Congressional Record (Bound Edition), Volume 148 (2002), Part 3]
[Extensions of Remarks]
[Pages 2891-2892]
[From the U.S. Government Publishing Office, www.gpo.gov]




     THE DISTRICT OF COLUMBIA FAIR FEDERAL COMPENSATION ACT OF 2002

                                 ______
                                 

                       HON. ELEANOR HOLMES NORTON

                      of the district of columbia

                    in the house of representatives

                         Monday, March 11, 2002

  Ms. NORTON. Mr. Speaker, when I introduce a bill to benefit the city, 
it generally is unnecessary for city officials to take the time to be 
present. However, Mayor Williams, Council Chair Cropp, joined me at a 
press conference today to emphasize the importance of the District of 
Columbia Fair Federal Compensation Act to the city's economic 
viability. The bill I am introducing today is as serious as the control 
board bill was when it was introduced seven years ago. The difference 
is that the Financial Authority bill was necessary to cure a crisis. 
The Fair Compensation bill must be enacted to forestall a crisis.
  As in the 1990s, this also is a crisis of expenditures rising faster 
than revenues. However, this problem has nothing to do with the

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overspending that led to D.C.'s recent insolvency. This time, no matter 
what the city does, it cannot cut its way out. However, D.C. cannot 
grow its way out either. The Federal Government has the city fenced in 
on all sides. It is uniquely harmful to keep a local jurisdiction from 
raising revenue and then to turn around and foist federal costs on 
local taxpayers.
  The Federal Government does both. First, it requires D.C. taxpayers 
to foot the bill for services used chiefly by federal workers and 
visitors: roads tortured by cars, 8 out of 10 originating from the 
suburbs, other shared infrastructure costs, public safety, and other 
services. Then the government catches the city at the revenue end--no 
commuter tax from the two-thirds of workers who earn their living here; 
no payment from the government for the 42 percent of real property it 
uses for federal office space and facilities and land; and no ability 
to make up for it by building above a height limit on all city 
structures.
  No city in the United States lives with this built-in mandatory 
financial imbalance. We cannot continue to carry the resulting 
federally imposed structural deficit and remain stable. The 1997 
Revitalization Act removal of some state functions reduced operating 
costs enough to allow the city to recover from insolvency but made no 
pretense at relieving the city of all state costs or even of addressing 
the structural deficit. The District, for example, continues to carry 
at least $500 million in state costs annually, according to the city's 
Chief Financial Officer. Today, I am releasing a letter requesting that 
the General Accounting Office (GAO) elaborate, document, and verify the 
federally imposed expenditures and restrictions on the District.
  The Fair Federal Compensation Act allows the federal government to 
pay for part (but certainly not all) of the cost of services rendered 
to federal employees, without taxing commuters or raising taxes on 
other Americans. A simple transfer of 2 percent of the federal taxes 
commuters already pay would be transferred to a designated D.C. 
infrastructure account. Commuters would experience no change in either 
their taxes or their tax filings because the credit would be 
administered by the Federal Government. Commuter salaries simply assure 
an amount that is calculable, limited and related to infrastructure and 
other services rendered to federal employees.
  There are four important reasons for the credit. It affords a 
reasonably accurate calculation of services used by federal workers; it 
assures a sustainable and predictable amount that allows the District 
to do the necessary budgetary forecasting; it costs commuters nothing; 
and it increases automatically at a modest rate tied to increases in 
commuter salaries. The chief strengths of the Fair Federal Compensation 
Act--its predictability, its gradual increase each year with inflation; 
and the disbursement of funds without an annual appropriation--were the 
principle weaknesses of the old federal payment.
  A particularly important feature to the bill reinforces its purpose 
to compensate for the costs of services to federal employees. The funds 
transferred from the Federal Government will be deposited in a 
specifically dedicated and earmarked Infrastructure Fund. The use of 
this money is limited to infrastructure that benefits the region and 
the Federal Government as well as the city. Specifically, these funds 
may be used only to pay for transportation (including roads and Metro); 
technology; school construction and maintenance (because it is second 
only to roads in D.C.'s debt service costs); and debt service, because 
most of the city's debt service is for infrastructure debt. Directing 
infrastructure funds to payment of debt service has the additional, 
critical value of helping the District to more rapidly improve its 
relatively low investment bond rating that costs taxpayers millions 
annually in excessive interest.
  The bill would generate $413 million in FY 2003, according to the 
CFO. Particularly considering that infrastructure debt service alone 
accounts for nearly $500 million and that public safety and public 
works amount to $240 million, our bill is more than fair to the Federal 
Government.
  Mayor Williams, Council Chair Cropp and the Council should take great 
pride in the extraordinary turnaround they each have helped engineer 
for their city--from a half billion dollar deficit to a half billion 
cash surplus. It is fair to ask them to continue to reduce the cost of 
government, to improve services, to rationalize the tradeoff between 
tax cuts and budget cuts, and to produce a balanced budget. Of course, 
it is not fair to ask city leaders, and particularly D.C.'s fragile 
base of taxpayers, to subsidize federal workers and services.
  The landmark Revitalization Act of 1997 was an emergency measure that 
always contemplated that there would need to be a second and final 
step. After five balanced budgets and surpluses by a local government 
that has shown itself willing to make tough decisions, it is time for 
the Federal Government to work with us to make the necessary tough 
decisions of its own.

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