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REUNION WITH MARYLAND
A Just and Practical Solution

April, 1998

Presented by
The Committee for the Capital City

SUMMARY: There is very little left of the District of Columbia's "home rule" government. Recent steps taken by the President, the Congress and the Control Board may provide welcome improvement in the management of the city, but in the long run will not solve the District's problem, there are serious structural deficiencies that must be remedied if the District is to be viable. Any solution, we believe, must address two issues that have plagued the governance of the nation's capital from the moment the District of Columbia was created 200 years ago: lack of full citizenship for District residents. and inadequate resources for carrying out both state and local governmental responsibilities.

Lack of Full Citizenship

The residents of the District of Columbia do not enjoy equal political rights with other Americans, in particular voting representation in the body that has ultimate control over the lives of those residents, the Congress of the United States.

Inadequate Resources For Governmental Responsibilities

Because of its small size and restricted taxing authority, the District of Columbia lacks the financial resources necessary to support the city, state and county governmental services it is called upon to provide.

After careful review of the alternatives, the Committee for the Capital City has concluded that the fairest and most practical long-term solution is for the District of Columbia. except for a small "federal enclave," to be returned to the State of Maryland, from whence it came.

The residents of the City of Washington would have full political rights as citizens of Maryland, and, relieved of its state functions, the municipal government could concentrate on improving the quality of basic city services. The portion of the District of Columbia that was originally part of the State of Virginia was returned to that state in 1846, providing both a legal precedent and an instructive example of the benefits to be gained by all parties from such a resolution.

The reunion of Washington with Maryland will be good not only for the people who live in the city, but also for the people and government of Maryland, which will become the home the national capital city, a wealthy and sophisticated world financial and political center, a major tourist attraction, and the home of many great museums and other cultural and historical treasures. Reunion will also relieve the national legislature of the distracting responsibility of dealing with the local government of an unrepresented people, a task that has frustrated and confounded Congress for 200 years.

REUNION WITH MARYLAND; A JUST AND PRACTICAL SOLUTION

The District of Columbia is in the midst of a governmental and fiscal crisis of destructive proportions. This is not the first time the District's anomalous status has left it mired in overwhelming problems. Since it was established in 1800 to be the seat of the National Government, the District has had a wide variety of governmental structures. Not one has proved successful. Although some have lasted a long time (the Commission form of government was in place for a hundred years from 1874 to 1974), all have eventually faltered because of an inherent defect: in the capital city of the world's greatest democratic nation, its residents lack fundamental democratic rights, including the right to participate in their own governance.

I. THE NEED FOR EQUAL SUFFERAGE

o Taxation without representation is still tyranny

In a nation that prides itself on its democratic traditions, and that preaches the virtues of democracy to the whole world, there is no justification for denying full political rights to the residents of its capital city. Rule by unelected persons always creates problems and resentments both for the rulers and for the ruled. "Taxation without representation" was one of the complaints that led the United States to revolt against the British crown.1 Yet more than two centuries after the revolution the residents of the District of Columbia, who pay one of the highest tax rates in the nation,2 have no voting representation in the U.S. Congress, the body that determines the District's budget and tells the local government how its tax monies must be spent.

o Original argument for separate District no longer valid

The original reason for the creation of a separate "federal district--to protect the new and weak national government from undue influence by some of the older and much more powerful states--no longer obtains. The Federal Government can take care of itself. Indeed, many important parts of that Government are located within the borders of sovereign states. No one worries that the State of Virginia, for example, will exercise undue influence on the national government's military or intelligence functions because the Pentagon and the CIA are located in that state. (See "History")

o Consent of the governed legitimizes government

The Declaration of Independence lists among the "self-evident truths" for which our revolution was fought that "governments ... deriv[e] their just powers from the consent of the governed." Yet the 530,000 residents of the District of Columbia are governed by elected representatives of people from Virginia, Maryland, North Carolina and other places who were not chosen by, and are not accountable to, the people of the District. At best these imposed overlords act as benevolent dictators. At worse, they use their power over the people of the District to further their own social agendas or the fiscal objectives of their constituents, at the expense of District residents and taxpayers. America lectures the world that democracy and accountable government are necessary conditions for human freedom and dignity; so too are they necessary to the freedom and dignity of the people of the District of Columbia.

II. THE STRUCTURAL FLAW

There is a fundamental flaw in the current structure of the local government. Designed to run a city, the District of Columbia Government has been given all the responsibilities of a state, but without a state's sovereign power of taxation.

o Too many governmental responsibilities

No other mayor and city council are responsible for running a welfare system, a pnson system3, a state university. No other city government licenses banks and insurance companies, drivers and automobiles, doctors and barbers.

More than three-quarters of the District's annual budget of $5 billion is for functions that elsewhere are performed by state and county governments.4 (See Exhibit 1). Medicaid matching funds, for example, which are state responsibilities in every other jurisdiction and shared by rural and urban taxpayers, fall entirely on the urban taxpayers of the District of Columbia.5

o Inadequate taxing authority:

District taxpayers are among the most heavily taxed in the nation.6 (See Exhibit 5). Almost 50% of the District's total revenue comes from taxes on residents and domestic business, compared to 15% in most cities.7

These high taxes, together with ineffective city services, poor schools and concern about crime, are driving businesses and residents out of the city.8 In 1950 the population of the District was more than 800,000. It is now less than 530,000 and shrinking.

The District Government may not tax the Federal Government or the many foreign embassies and international organizations located in the city. As a result, more than half of the already extemely limited land area is not subject to property tax--a loss to the District treasury of an estimated $450 million a year.9 (See Exhibit 2).

The District of Columbia is home to over 2,500 non-profit organizations and associations, more than 50 museums, hundreds of churches and religious organizations, five major hospitals and five large universities, all of which are not subject to most local taxes.

Congress has specifically exempted some 20 large institutions from local taxation, resulting in a further loss of several hundred million dollars a year.

The District Government is prohibited by Congress from taxing the income earned in the city by non-residents. As a result, two-thirds of the money earned each day in the District of Columbia--almost $22 billion a year--leaves the District tax free.10 Just a 2% tax on this income would yield $370 million a year for the District.11 The District may not even tax the income of its own employees who live outside the city (more than half of the workforce); although they are paid with monies raised by taxing District residents, they pay their taxes to Maryland or Virginia.

All states have the right to tax non-resident income, and many cities--particularly those with significant out-of-state workers--impose such a tax. Philadelphia, for example, levies a tax of 4% on income earned in the city by residents of New Jersey and elsewhere.12

The District Government may not levy sales taxes on purchases by federal and foreign government agencies and on sales by the many military and non-profit organizations located in the District--a loss of income to the District Government of some $70 million a year.13

Other restrictions contained in the home rule law, such as building height limitations, when coupled with the severe limitation on available land for development, sharply limit the ability of the District to achieve economic growth.14

o The Vanishing Federal payment

The "federal payment," originally intended to compensate the local government for
tax losses because of the presence of the Federal Government and to pay for services, such as police and fire protection and street maintenance, provided by the District Government to the Federal Government was never adequate for that purpose. Pegged for the past several years at $660 million a year, it has been estimated that to truly compensate the District for the loss of revenue due to the federal presence, the annual payment should be twice that amount. 15

As part of the District "relief" bill proposed by the President and enacted by Congress in August of 1997, the federal payment has been eliminated entirely, starting in the FY '99 tax year. (A "transition" federal payment of $160 million was provided in FY '98). The reason given for eliminating the federal payment is that the Federal Government will be picking up some of the major "state" costs of the local government, such as prisons, courts, a larger share of medicaid payments, etc. It is debatable whether in the long run the net savings to the District will offset the loss of the federal payment. Without the federal payment, moreover, the Federal Government will be getting substantial city services from the District paid for entirely by District taxpayers. Since the Federal Government pays no taxes and occupies almost half the taxable land of the District, it is unfair for the Federal Government to get a free ride on the backs of local, unrepresented taxpayers.

o Inherited problems of home rule:

In 1973, when the "home rule" legislation was enacted, Congress turned over to the new District Government an accumulated deficit (unpaid bills) of $279 million, plus responsibility for $2 billion in unfunded pension liability for police, teachers and judges who were, until home rule, Federal Government employees.16 The unfunded pension liability for former Federal employees, which has since grown to more than $3.5 billion, has now been reassumed by the Federal Government as part of the District "relief" bill passed in the summer of 1997, although the Federal Government will keep the $260 million paid into the pension fund over the years by District taxpayers.

The "home rule" act of 1973 was a compromise between those who did not want any local self-rule and those who wanted local self-rule at any price, convinced that the original authority of the elected government could always be expanded at a later date. Unfortunately, the limitations contained in the "home rule" charter have severely crippled the ability of the District Government to meet its obligations. In hindsight, many of those who supported limited home rule for the District of Columbia have reason to regret the compromises that made it possible.

Having the Federal Government pick up some of the District Government's state-like functions, which was proposed by the President and enacted by Congress in August of 1997, may resolve some of the District's more severe financial and management problems in the short run, but the Federal Government is a poor choice to be a state government for the District. The Federal Government has neither the expertise nor the mandate to provide state governmental functions. Moreover, since the people of the District have no voting representation in the national Congress, the Federal Government is providing those functions as a colonial power to a subject people. Such a structure cannot substitute for full democratic rights and accountable government.

The current structure of the District Government--with power divided among the Mayor, the Control Board, the Council and Congress--is clearly not a permanent solution to the political and economic needs of the city, but only one more in a long series of attempts to avoid such a solution. Sooner or later this interim structure must be replaced. The only question is what should take its place.

The District's current governmental structure is broke; it needs to be fixed

The District Government has hardly been a model of efficiency or fiscal constraint. Some of the current crisis is directly traceable to poor management decisions made by elected District officials. But the major problem is structural: without control over, or even participation in, the government which rules them, and the continued denial of adequate taxing authority, the people of the District of Columbia will never be able to put their own house in order. After two centuries of conditioning, the people of the District, like serfs on some great Russian estate, spend their energy petitioning the Federal czar for favors and praying for a more enlightened overseer.

Democracy is not some utopian ideal intended to inspire patriotism. It is a highly effective, if messy, system of government. As has been proven again and again, in many parts of the world, democracy works. Where people participate in their own governance, they are free, dynamic and responsible. Colonialism, on the other hand, in common with other tyrannies, produces a governmental system where no one takes responsibility, no one is at fault, and nothing works. That describes the current state of the District. The cure is not less democracy but more.

The trend, however, is in the other direction. Although substantial progress has been made over the last two years in balancing the city's budget and restraining spending, the city continues to suffer from inadequate schools, a high crime rate and low police morale, crumbling streets and other infrastructure, and poor delivery of many basic city services. While ranking near the top in total taxes paid, District residents rank near the bottom in the quality of services provided to them by the local government.

Meanwhile the District's "home rule" government is being dismantled piece by piece. Significant parts of the government--the foster care system, the prison medical system, the public housing authority--are being managed by receivers appointed by the courts. In August of 1997 the Congress stripped authority over the nine largest city agencies from the elected Mayor and gave it to the appointed Financial Control Board. The Control Board has also appointed a board of trustees for the public schools, displacing the elected school board--an act that one court has ruled went beyond even the already extraordinarily broad authority of the Board. Democracy for the District's citizens has become a hollow mockery; they go to the polls to elect people who have no power. Real power over their lives lies with people from places like North Carolina and Virginia who are not answerable to them. No wonder they are cynical. No wonder so few bother to vote at all. No wonder they move out of the jurisdiction in ever increasing numbers.

OPTIONS

For too long the basic problems of the District of Columbia have not been addressed. It has been easy for Congress to allow matters to slide, letting the magnificance of the monuments of Washington, the Federal City, obscure the intractable problems of the District of Columbia, home to more than half a million people. The current crisis forces us to take a new look. Are there ways to resolve the District's difficulties for the long run, and not only for the present? What kind of government should the nation's capital city have?

There are only a limited number of alternatives, and all have drawbacks. Among the options, only one has the advantages of logic, precedent, fairness, and economic viability:
reunion of the City of Washington with the State of Maryland. We reach this conclusion by the process of elimination; on examination, each of the other options--including the option of doing nothing--are shown to be impractical.

It is axiomatic that any solution that leaves the citizens of the city of Washington with fewer political rights than other Americans cannot be accepted. Whatever form of government is determined, the people of Washington must have full political rights, including the right to a local elected government with real municipal power, the right to voting representation in a state government that has sovereign taxing authority, and the right to voting representatives in both houses of Congress.

It is clear that Americans in general, and not just the people of the District, understand the justice and fairness of this principle. In a recent opinion poll conducted across the country, 79% of the respondents agreed with the statement: "U.S. citizens who are residents of Washington, D.C. should have voting representatives in the U.S. Congress, like other citizens," and 86% agreed that "Residents of Washington, D.C. should have the right to elect their own local officials to run their city government, like other U.S. cities."17

The Committee for the Capital City has examined four types of governmental structures that can meet the criteria of fiscal stability and full political rights:

1. Statehood

One possibility is to make the District of Columbia a sovereign state, with two Senators and at least one voting Representative in Congress. This is not a new idea; a constitution has already been drawn up and approved by the people of Washington for a State of New Columbia, and "shadow" senators and representatives have been elected. Such an entity would indeed provide the citizens of Washington with full political rights, but the statehood solution creates economic and political problems that seem insuperable.

o Political: The new state would be by far the geographically smallest fully sovereign member of the United States, and in population the second smallest. Unlike other sparsely populated sovereign states--Alaska, North Dakota, Wyoming, Vermont--there is limited potential for population growth, because Washington is already entirely urban. People from other heavily populated urban areas--New York City, Los Angeles, Chicago--are not likely to accept that the much smaller number of people living in Washington would have so much greater representation in the national Congress than they do as parts of large states. People in geographically large and heavily populated states, such as Texas, California and New York, will not look kindly on having a single city--Washington--with equal representation to theirs in the U.S. Senate. In short, Washington looks like a city to most Americans, not like a state.

o Economic: There is reason to doubt that the District of Columbia could be an economically viable state. With its extremely limited land area, much of which cannot be taxed because it is owned by the Federal Government or international organizations and foreign embassies, and an urban population, much of which needs substantial government services, it is difficult to see where the funds could come from to support the governmental structure of a state. True, a sovereign state could tax the income earned in the city by non-residents--which is now forbidden to the District of Columbia Government--but over the long run this would likely not be enough to sustain all the governmental responsibilities of a state, county and municipal government in such a small entity.

2. Expanded state

Some of the objections to statehood for the District of Columbia could be overcome by expanding the borders of the new state to create a larger political unit. Today's District of Columbia, after all, is even smaller than originally contemplated. The original 100 square mile territory is now less than 70 square miles. Simply expanding the District to its original size by reincorporating the County of Arlington and the City of Alexandria would substantially improve the economic viability of the District and give any new state a better chance.

In theory, the land area for an expanded state could be made even larger. The Greater Washington Board of Trade has for years been keeping statistics on a mythical "State of Potomac," made up of the District of Columbia, five counties from neighboring Maryland (Montgomery, Prince Georges, Frederick, Calvert and Charles) and five from northern Virginia (Arlington, Fairfax, Loudoun, Prince William and Stafford}, plus the City of Alexandria. Although still small in area, such a state would rank 23rd in the nation in population--larger than the remaining portion of Maryland-- and would be entitled to six Representatives in Congress. It would rank first in the nation in the median income of its inhabitants and first in the nation in the average educational level of its citizens. It would rank 14th among the states in gross state product. Clearly such a state would be both politically and economically viable.

But the gains for the new State of Potomac would come at the expense of the current states of Maryland and Virginia, casting doubt on their viability. Maryland would become one of the smallest states in population and one of the poorest; the income of both Maryland and Virginia would drop sharply. It is not likely that these states would agree to their dismemberment.

3. Annexation by another state

Although the remaining portion of the District of Columbia was originally part of Maryland, there is no structural reason why it could not become part of some other state. Virginia is an obvious alternative because it is contiguous. West Virginia could be made contiguous to the District by including as part of the territory to be transferred the C & 0 Canal parkland, now owned by the Federal Government, which runs from Georgetown in the District to Harpers Ferry in West Virginia.

Moreover, contiguity of territory is not necessary for a state. Before it became a separate state in 1820, Maine was part of the State of Massachusetts, even though the State of New Hampshire separated the two parts. The City of Washington could become part of Pennsylvania, or North Carolina, or indeed any state. Obviously there are practical problems in administering a non-contiguous area, but if territories as widely separated as the islands of Hawaii can be administered as a single state, it should be possible to overcome those difficulties.

The basic objection to this solution is that there is little logic or history to support attaching Washington to any state other than Maryland.

THE BEST SOLUTION; REUNION WITH MARYLAND

The reason given in 1846 for returning, or "retroceding", the Virginia portion of the District was that it "was not needed" by the national government. It is difficult to see in 1998 how any continuing national interest is served by Congress retaining ultimate sovereignty over the remaining portion of the District. The City of Washington, minus a small federal enclave, should be returned to Maryland and become part of that state.

There is good historical precedent. The return of the Virginia portion of the District to Virginia in 1846 was clearly successful, both for the people of Alexandria and for the state of Virginia. No one today would seriously contemplate restoring the boundaries of the original District. Virginia would lose an economically important part of the commonwealth, and the people of Alexandria would lose their rights as full citizens of a sovereign state.

Maryland is the logical choice. It surrounds the District on three sides. There are already government services that cross state lines, such as rail, metro and bus transportation, water services and sewage treatment. The underlying common law of the District is still Maryland law, as was specified in the Congressional Act that created the District.18

Washington would be an economic boon to Maryland. Maryland is currently competing for jobs, population and industry with other states, notably Virginia, Pennsylvania, Delaware and North Carolina. Washington, the nation's capital city and a major world financial and political center, would do much to bring business and revenue to the State of Maryland, revitalize the Port of Baltimore and bring to fruition the much discussed but never realized "Washington-Baltimore corridor."

Cooperation, instead of competition, between Washington and Maryland over everything from sports teams and arenas to convention centers, hotels, hospitals and educational institutions, will greatly enhance the significant assets of both communities, making the state a strong competitor in the global economy. The recent bid by the cities of Washington and Baltimore to jointly host the 2012 Olympic Games would be greatly strengthened if both cities were in the same state. The resources of the state, combined with the world-wide knowledge of Washington as the home of the Federal Government and the site of embassies and many international institutions, will provide a substantial advantage in the search for national and international business.

With the addition of the City of Washington, Maryland would become the 15th largest state, and would pick up at least one additional seat in the U.S. House of Representatives. Even though Washington, like most urban centers, has a sizeable number of low income citizens, the District of Columbia still has the highest per capita income in the nation--$35,541, compared to $27,375 in Maryland--and a large number of highly educated people. The inclusion of Washington would increase both the average per capita income and the overall level of educational attainment for the State of Maryland. Moreover Washington would be a source of significant tax revenue to the state. District residents currently pay more than $1.6 billion a year in income and property taxes. Reunion would put the heart of the region's economic base--and still the major source of its employment--within the jurisdiction of the state. With the inclusion of Washington, the country's fourth largest regional market will be centered in the State of Maryland.

For Maryland, there are also reasons why it would be harmful no to seek reunion with Washington. Maryland's future is not separate from the District's. To the extent that the District declines, Maryland will be hurt. If the District Government cannot provide decent services to its population, that population--poor as well as middle class--will flee, mostly to Maryland. Indeed, the process has already begun. Figures recently made available by the Tax Revision Commission show that the sharpest loss in the DistrictÕs population was of households earning less than $15,000 a year.19 Moreover, an inability of the District Government to maintain minimal municipal services will cause employers--including the Federal Government--to move elsewhere, and not necessarily into Maryland. The result would be a loss of jobs and tax revenue for the state.

On the other hand, if the District is to remain a separate and viable governmental entity, it will require substantial new infusions of money, and the most likely source of such revenue will be a non-resident earnings tax. So far Maryland and Virginia have been able to prevent the imposition of such a tax, but they may not be able to do so much longer. By incorporating the City of Washington into the state, Maryland would head off what could be a very costly non-resident tax on its citizens who work in the District.

As was the case with the Virginia portion, no Constitutional amendment would be required to return most of the Maryland portion of the District to Maryland as long as there would remain a Federal District. The Constitution requires only that there be a District "not exceeding ten miles square" as the seat of the national government.20 The "Home Rule" Act that created the current structure of the District of Columbia Government carved out a "National Capital Service Area" consisting of "the principal Federal monuments, the White House, the Capitol Building, the United States Supreme Court Building, and the Federal executive, legislative, and judicial office buildings located adjacent to the Mall and the Capitol Building" which is administered today directly by the Federal Government.21 By leaving the National Capital Service Area under direct Federal control, the Constitutional requirement is satisfied and the remaining portion of the District, consisting of the City of Washington where all of the residents live (except for the President and his family, citizens and voters of another state), would be reincorporated into Maryland, as a "home rule" city, like Baltimore. The residents of Washington would become citizens of Maryland with full political rights, including the right of representation in the Maryland General Assembly in Annapolis and the right to vote for Maryland Senators and Representatives to the national Congress.

This change in legal status would be brought about by simple legislation enacted by Congress "returning" the Maryland portion to the state, and simple legislation by the Maryland legislature accepting the return of the territory.22 Although not required, at the time of the Virginia retrocession a referendum was held among the citizens of Alexandria to determine that they wished to be reunited with the State of Virginia, and such a referendum would undoubtedly be desirable among the current citizens of the District.

Once the legal changes are in place, various administrative regulations would be needed to integrate the governmental services provided under the new system. The City of Washington would continue to have a Mayor and a City Council, responsible for municipal functions such as police and fire protection, trash collection and public schools. State functions, such as motor vehicle licensing, the licensing of banks and insurance companies, hospitals and doctors, would be transfered to the State of Maryland, and Washington drivers would be issued Maryland license tags. Maryland state police would have jurisdiction in the city. The current University of the District of Columbia would become a Washington campus of the University of Maryland, and District residents would be eligible to attend Maryland state schools, including the university. Other state functions, such as prisons, medicaid and child welfare, would also be transferred to the state. In return, residents of Washington would pay income and sales taxes to the state government of Maryland, as well as all other taxes and fees paid by Maryland residents to their state, but at Maryland rates, which are substantially below current District rates. The cost savings by combining currently duplicated state services would provide a net gain to the State of Maryland while lowering the taxes on District residents.

These changes would not come about all at once but would be phased in over a period of years. Maryland would need the assistance, both technical and financial, of the Federal Government, which will have to recognize, and provide for, both the short-term transition costs and the longer-term federal impact costs. In the long run, the consolidation will result in significant saving of money for the Federal Government, the Government of Maryland (which will also realize substantial increases in tax revenues from Washington), and the people and businesses of Washington.

THE TIME TO ACT IS NOW

Implementation of the process of reuniting Washington with Maryland would not be without its problems. Something must be done, however, before the District Government collapses entirely. Retrocession, while not a perfect solution, is preferable to every other alternative, including especially the failed "home rule" charter. There can be no lasting resolution of the governance problems of the District of Columbia unless and until the people who live there have equal political rights with all other Americans. Retrocession will remove the current unjustifiable political discrimination suffered by District residents. It will also provide the opportunity for Washington to achieve its rightful place as the nation's capital city, by removing the unfair and economically unsupportable state functions that the District Government currently cames.

The citizens of Washington would still be residents of the nation's capital city. The "special character" that comes from that unique circumstance would not change. On the contrary, promoted by the Maryland Government as part of the state, Washington could experience a tourist boom beyond anything it has yet seen.

For Congress, reuniting Washington with Maryland will relieve the national legislature of the burden of providing state and local government to an unrepresented people. The notion that Congress should directly rule the Capital City was flawed from the beginning, as Members of Congress noted at the time, but with the passage of years and the increasing complexity of local government, especially in large urban areas, these flaws have grown grotesque. The District has become a battleground for national ideological issues fought out between persons elected by constituencies hundreds, even thousands, of miles away, while the persons affected--the residents of the city--look on as bystanders. Removing Washington from direct Congressional control will prevent such anomalies in an otherwise democratic form of government, and will let national legislators deal with national issues.

History: How did we get here?

o In 1790 Congress designated a ten mile square parcel of land (that is, 100 square miles) as the home of the new national government. The land was created by cession of territory by the states of Maryland and Virginia. Congress first met in the new District of Columbia in December of 1800.

Why was the District created? Why was Congress given the power to "exercise exclusive legislation in all cases whatsoever, over such District (not exceeding ten miles square)..."? (U.S. Constitution, Art. I, § 7, clause 17).

o At the end of the Revolutionary War, the weak national government created by the Articles of Confederation had to deal with thirteen sovereign states. Some had been virtually self-governing under the British crown for more than 100 years. Some were large and powerful, with sizeable militias and substantial tax revenues. The national government, on the other hand, had no army and little taxing authority. With the Congress meeting in New York for a while and then in Philadelphia, the smaller states became alarmed that the national government would become captive of the large states of New York or Pennsylvania. A permanent separate home for the national government became a major political issue.

o Congress was also concerned because of a particular event. In June of 1783, when Congress was convened at the Pennsylvania statehouse in Philadelphia, it was surrounded by a mutinous band of Revolutionary militia seeking overdue pay. Congress asked for help from the Governor and Executive Council of Pennsylvania, which was meeting upstairs in the same building. The request was refused. Two days later, Congress secretly slipped out of town, reconvening in Princeton, N.J, across the Delaware River.

It was this event that convinced Congress that the national government needed a home of its own, where the Congress would be the sovereign authority. Right from the beginning, however, questions were raised about the political rights of the people living in this new jurisdiction. The land ceded by Maryland and Virginia was not vacant. Two cities, each with over 100 years of self-governance, were in the territory: Georgetown in the Maryland portion and Alexandria in the Virginia portion. What would happen to the political rights of the residents of those cities?

Rep. John Smilie of Pennsylvania asked on the floor of the House of Representatives in 1801 why the House would agree to disenfranchise some thousands of persons of their political rights, which they had previously enjoyed:

"Not a man in the District would be represented in the Government, whereas every man who contributed to the support of a Government ought to be represented in it; otherwise his natural rights were subverted, and he left, not a citizen, but a subject. It was a right which this country, when under subjection to Great Britain, thought worth making a resolute struggle for, and evinced a determination to perish rather than not enjoy." 10 Annals of the Congress 997.

But Mr. Smilie's views did not prevail. Congress was alarmed that the delegates from New York and Pennsylvania were still scheming to get the Capital returned to their cities. Congressional leaders were unwilling to reopen a debate that might have scuttled the whole idea of a separate federal jurisdiction.

Two years later, in 1803, resolutions were introduced in the House of Representatives to retrocede the Virginia portion of the District back to Virginia and the Maryland portion back to Maryland. The Virginia resolution was defeated on a vote of 66 to 26. The Maryland resolution was then tabled.

o In 1846, another resolution was introduced in Congress to retrocede the Virginia portion of the District back to Virginia. That resolution was approved. The former Virginia portion of the District is now Arlington County and part of the City of Alexandria.

No Constitutional Amendment was thought necessary when the Virginia portion of the District was retroceded because there remained a "...District (not exceeding ten miles square)..." which is all the Constitution requires.

o Although residents of the District did not have representation in the Congress, Georgetown and the then-separate City of Washington enjoyed local self-government until 1871. Both had elected legislatures and mayors who were elected in turn by the legislators. In 1871 Congress rescinded the charters of the cities of Georgetown and Washington and established a District-wide District Government with a bicameral legislature. The Governor and the eleven members of the upper house were appointed by the President with the consent of the Senate; the lower house of 22 members was elected by the citizens of the District, two from each of 11 wards. Three year later, in 1874, Congress abolished the local government and took direct control, providing for a three-member Board of Commissioners appointed by the President with the advice and consent of the Senate. That system lasted 100 years.

o In 1961 the people living in the District of Columbia were given the right to vote for President and Vice President. It required a Constitutional Amendment. (Number Twenty-three).

o In 1973 Congress enacted the "home rule" act which gave the people of the District authority to elect a local government. The 13 member unicameral legislature, first elected in 1974, is called the Council of the District of Columbia. The District's chief executive, also elected by the people, is called the Mayor. But the Congress retained the right of absolute veto and amendment over all local government laws and budgets, according to its unchanged constitutional mandate. The powers of the local elected government are entirely derivative from and subordinate to the Congressional authority contained in the Constitution.

About the Committee for the Capital City

The Committee for the Capital City was formed in 1995 by a group of civic minded people who live in the District of Columbia, Maryland and Virginia to explore alternative solutions for the economic crisis gripping the nation's capital city. The Committee recognizes that Washington is the heart of the region, and its decline has inevitably adverse consequences not only for the people who live in the city but also for the surrounding jurisdictions. The Committee is multi-racial and non-political and is united by a common desire to preserve and protect the unique character and beauty of the nation's capital city while providing full democratic rights to its residents. It is open to all who would join with it to press for a fair and economically workable solution.

Footnotes:

1) It is interesting to note that the 3% tax imposed on the American colonies by Britain in the Townshend Act led directly to the Revolution. District residents currently pay more than 37% of their income to a Government in which they are not represented.

2) Source: The Tax Foundation.(See Exhibit 5)

3) As part of the District "relief" bill passed by Congress in August of 1997, the District's Lorton prison will be closed over the next several years and the prisoners transferred to federal prison facilities. This will have the unfortunate result of separating D.C. prisoners from their families and communities.

4) Testimony of Mayor Barry before the House District subcommittee, February 22, 1995. "District of Columbia Government - Functions by Responsibility Center and Jurisdictional Type; FY 1997." Chart prepared by the Office of the Mayor, January 28, 1998.

5) In August of 1997 Congress passed a law that reduced the District's matching share for medicaid from 50% to 30%, with the Federal Government paying the rest. With very few exceptions, however, most city governments pay no part of the medicaid match; that is considered a state function. The few cities that do pay a portion of those costs are all much larger cities than the District, and they pay far less than 30%.

6) District residents pay taxes that are more than 30% above those paid by some of their suburban neighbors, while District businesses pay taxes up to 73% higher than businesses in the suburbs. Source: "A Framework for Renewing the Tax Structure and Reducing Tax Burdens in the District of Columbia," Office of the Chief Financial Officer and Office of Tax and Revenue, Government of the District of Columbia, February, 1998.

7) Statement of D.C. Delegate Eleanor Holmes Norton before the House D.C. subcommittee, February 22, 1995.

8) Between 1990 and 1995 the District's population declined by 8.2%. Employment in the District declined during the same period by more than 15%, while increasing in the suburbs. The number of D.C. individual income tax filers declined by more than 14% over those five years. Source: "A Framework for Renewing the Tax Structure and Reducing Tax Burdens in the District of Columbia," Office of the Chief Financial Officer and Office of Tax and Revenue, Government of the District of Columbia, February, 1998.

9) "Assessing the District of Columbia's Financial Future," McKinsey & Company and the Urban Institute, October 1994 (known as the McKinsey Report). See also "D.C. Tax Facts, Fiscal Years 1995 and 1996." Anthony Williams, Chief Financial Officer, D.C. Government.

10) Testimony of Mayor Barry before the House District subcommittee, February 22, 1995.

11) U.S Advisory Commission on Intergovernmental Relations, cited in the McKinsey Report.

12) Cities and states that tax commuters allow the taxpayers to offset those taxes against taxes owed to the home community. A tax by the District Government on income earned in the District by non-residents would not result in higher or double taxes on those individual taxpayers. The offset, however, would be a drain on the taxes that could be collected by Virginia and Maryland, which is why suburban Congressmen, who often serve on the subcommittees that handle District matters in the Congress, so vigorously object whenever the subject of non-resident taxes comes up.

13) Testimony of Mayor Barry before the House District subcommittee, February 22, 1995.

14) Building height limitations, which prohibit the construction of any building taller than 13 stories anywhere in the District, were presumably intended to prevent the dwarfing of federal monuments. They are the reason, however, why there is substantial new construction on the Maryland side of the border in areas far removed from the city's monumental core--such as where Georgia Avenue, Rhode Island Avenue, Pennsylvania Avenue and New York Avenue cross from the District into Maryland-while economic activity on the District side of the border stagnates. Negotiated agreements between Maryland and the Federal Government could protect the attractions of downtown Washington that are so important to both jurisdictions while avoiding the arbitrary dividing lines that are so disadvantageous to the City of Washington's economy.

15) "The Case for a More Fair and Predictable Federal Payment for the District," report issued by the DC Appleseed Center for Law and Justice, November 2, 1995.

16) District of Columbia Comprehensive Annual Financial Report.

17) "U.S. Public Opinion on Principles of Governance for Washington, District of Columbia,"
Mark David Richards, 1997. Funded by the Humanities Council of Washington, D.C., and The New World Foundation. See also "Public Opinion and the Political Future of the Nation's Capital,"
Edward M. Meyers, Georgetown University Press, 1996. The author got similar results using focus
groups.

18) Organic Act of 1801, 2 Stat. 103; D.C. Code, vol. 1, p. 46. The Act specified that Maryland law would continue in force in the portion of the District that was ceded by the State of Maryland, while Virginia law would continue to apply to the portion of the District ceded by Virginia.

19) More than 40% of the households earning less than $15,000 a year moved out of the District between 1990 and 1996, compared to less than 6% of households earning between $15,000 and $25,000 a year. Households with income between $25,000 and $50,000 a year actually increased during that period, as did those with incomes of more than $100,000. Source: Report of the Tax Revision Commission, May, 1998.

20) Constitution, Art. I, section 8, clause 17.

21) District of Columbia Self-Government and Governmental Reorganization Act, PL 93-198, §739; codified in D.C. Code as Title 9, §142.

22) The legislation required for retrocession of the Virginia portion of the District can be found in volume I of the District of Columbia Code, pp 72-75.