A White House proposal to raise the rent on cafeterias, day care centers, and minority run business operating in government agencies could boost food prices dramatically, double the cost of child care and drive some stores out of business.
In Washington metro area, dozens of concerns - from cafeterias and barber shops to stationary stands, day care centers and recreation associations operate in government buildings. They enjoy cut-rate rental rates for the spaces they occupy. That is supposed to permit them to charges customers, primarily federal workers, theminimum for goods and services ranging from permanent waves and baby feeding to sales of meals, coffee and magazines.
Nearly 100,000 U.S. employes each day eat complete meals, or take coffee breaks in cafeterias that pay rental rates equal to only 1.5 percent of their gross annual sales. The proposed rent increase for them would raise their rent to between 40 percent and 50 percent of their gross annual sales.
Day care centres costs to employes in a dozen agencies now range from $10.50 per week for low-income employees to $70 or $80. The rent raises proposed by the Office of Management and Budget would double costs to employes who now pay an average of $43 per week for the child care services.
Virtually every group that would be affected by the rent increase proposal - now being circulated to agencies for comment - agrees that some adjustment might be justified. But not for their particular service.
The day care group is working especially hard. It argues that providing relatively low-cost baby-sitting to government workers helps keep families together and employes, especially low paid women, off the welfare rolls.
The OMB rent increase also would affect banks, veterans group and national voluntary action rpograms that have space at reduced rates in government buildings. Credit unions also could be affected by the rent rise, as would vendors who get space at token rates under a program designed to help minority group members engages in small business.
Some of the day care centers, for example, now pay anywhere from $8 to $12 per year square foot of space. Even a modest increase could force them to raise prices, go out of business or cut down space and thereby limit the number of employes' children using the vital services. Other U.S. agencies that have been under pressure from employees and unions to establish day care centers would be discourages, opponents of the rent increase say, from even considering them.
Leaders of the Federal Women Program have been lobbying hard with their respective agencies to block the OMB plan. They argue that the rent increase would hurt morale, increase job turnover and have its greatest adverse impact on "lower-income, single parents, minorities and women" and amount to a form of in-house discrimination that the government prohibits in industry.
OMB officials point out that the proposals are "tentative" and that they will study agency comments - due to OMB by Feb. 20 - before going ahead with any changes.
Agency brass in charge of property management, personnel and administration say they have been under "tremondous pressure" from various groups to scuttle the rent increase.
This week patrons of the Government Services Inc., cafeterias, which operates 39 eating establishments on government property - were given letters from GSI management warning that "continuous increases in costs, combined with decreaing patronage" have forced them to raise some selling prices. This means layoff of GSI personnel and "menu adjustments" will be forthcoming, and could lead to the shutdown of some cafeterias althogether unless the situation improves, GSI said.