WASHINGTON - Pressure is mounting on Fannie Mae to pay some form of local income tax to the cash-strapped local government here.
In a tactical switch, local leaders are now asking that Fannie Mae make a voluntary payment to the city.
At Washington's corporate rate of about 10%, Fannie Mae's local income tax on its 1994 income of $3 billion before federal taxes would have been about $300 million.
In an interview published in Wednesday's Washington Post, the district's nonvoting member of Congress, Eleanor Holmes Norton, acknowledged that Congress was unlikely to give the district power to tax Fannie Mae, formally the Federal National Mortgage Association.
But, she added, district officials hope to open negotiations with Fannie Mae over voluntary contributions.
The talks would be part of a broader drive to collect local taxes from other tax-exempt groups, such as universities and trade groups, to close the city's budget deficit.
"When we are up against the wall, everybody has to contribute," said Ms. Norton in the Post article. "Poor people are contributing, middle-income people are contributing, and it is unthinkable that Fannie Mae, tax-exempt universities, and religious institutions would not also want to make a contribution."
Fannie Mae spokesman David Jeffers said the agency has not yet had any talks with representatives of the district government.
But he said Fannie would "absolutely not" consider a voluntary payment, "because state and local taxes in any form ... increase the cost of homeownership in every community in this country."
Thomas O'Donnell, an analyst at Smith Barney, said he believes that Fannie Mae will not make a payment to the district.
Fannie "won't backtrack," because investors will think that the agency is not as able to handle political risk, Mr. O'Donnell said.
The Post quoted the president of George Washington University, Stephen J. Trachtenberg, as saying that the university's voluntary contribution would be conditional on Fannie Mae's payment.
"There is going to be more and more momentum building," said one longtime Fannie Mae watcher, who asked not to be identified.
Like other government-sponsored enterprises, Fannie Mae was granted an exemption from local and state income taxes by Congress.
Rival Freddie Mac enjoys the same exemption, but it is based in the wealthy Washington suburb of McLean, Va., and is unlikely to face a similar challenge.
