Sen. Patrick J. Leahy (D-Vt.) told top District of Columbia officials yesterday that the city cannot expect the $317 million U.S. payment proposed by President Carter and that Congress will have to cut next year's municipal budget by at least $17 million.
Leahy, chairman of the Senate District Appropriations Subcommittee, made the comments at a hearing he convened to get an early look at the $1.4 billion city budget for the 1979 fiscal year, which begins next Oct. 1.
Detailed hearings will begin after the budget reaches Capitol Hill around March 1.
Opening yesterday's hearing, Leahy said it is unlikely that other committees of Congress will agree to authorize an increase of the federal payment beyond the present limit of $300 million.
Therefore, he said, "it wil fall on our shoulders in Congress . . . to make reductions of at least $17 million" to balance the proposed budget.
Mayor Walter E. Washington and City Council Chairman Sterling Tucker did not appear surprised by Leahy's statement, but both defended the city's request for increased support from the U.S. Treasury. They said the city has effectively slowed the budget's annual rate of growth.
"It is somewhat miraculous that we remain afloat" under present financial restraints, Washington said. Tucker called the proposed increase in the federal payment a modest figure.
Although the legal limit on the federal payment is $300 million, the city never has received that much. The actual payment this year, under a stop-gap appropriation resolution enacted by Congress in December, is $276 million.
The federal payment is intended to compensate the city for its inability to collect taxes on government-owned property, and for services the city provides to U.S. agencies.
In practice, Congress usually varies the payment from year to year, to fill the gap between the city's income from local taxes and the total expenditure provided in the budget.
By prior agreement between Leahy and D.C. officials, the city's most pressing financial problem, the lack of a formal budget for the current 1978 fiscal year, was not discussed in detail at the 90-minute session.
That unprecedented situation arose because of a stalemate in a House-Senate conference committee over the city's proposal to build a $110-million convention center downtown.
Rather than break the impasse, Congress adopted the stopgap resolution. It extended the 1977 budget to the end of the 1978 fiscal year on Sept. 30, stalling all new and expanded city programs and the city's entire construction program.
Leahy, a foe of the current convention center plan, said the budget problem "could be resolved in the matter of hour." All it would take, he suggested, is for the House conferees to agree to meet and drop their insistence of financing the center - an unlikely prospect.
During the hearing, Tucker predicted that a regionwide fare increase will be adopted later this year on the Metro rail and bus system, a decision he said would be deplorable even if necessary. Washington, a political rival of Tucker, promptly declared: "I would strongly oppose a fare increase at this time."
The issue came up when Tucker referred to growing subsidies to the regional transit authority as an item that is out of the city's budgetary control. Washington, Tucker and Leahy all agreed that a regional tax is needed to help pay off soaring deficits.
The Metro board's budget committee has recommended a 7 percent fare increase, Tucker said, "and my guess is that the increase will have to take place." If voted by the Metro board, the increases would be effective in the last half of this calendar year.