Agenda - Council - 07/22/1980 - Laserfiche WebLink

Home

12 proposed cuts will mean some reduction in state aid to localities, at least for the fiscally distressed states. ,Mthough major initiatives involving direct aid appear unlikely now, there are numerous--almost increment- al--ways in which states can respond to the problems of localities. As the ACIR report points out, these fall roughly into three major areas: structural innovations, fiscal changes and functional program shifts. In virtually every state, however, there remain tradi- tional forces--legal, political and institutional--which work against an expanded state role in helping the cities "Intensified political competition between local, state and federal governments for available resources will be an important factor in the eighties." and distressed communities. "There is . . . bound to be--even in the most benign of situtations--an inevitable adversary role between cities and states," said Robert E. Gordon, administrator of the National Center for Municipal Development in Washington, D.C. "That's built in," he said, "and it's built in simply because urban areas have a set of interest which are somewhat different" from those of rural areas, smaller towns and suburbs. Yet, many rural legislators share some common ground with lawmakers from the big cities when the problems of older, small and medium-sized towns and cities are taken into account. Finally, the position of the cities in the political constellation of state politics in the 1980's will be determined by upcoming legislative redistricting (and the same will be true at the congressional level with reapportionment). Cities which have experienced a population decline will probably also witness a drop in political power at the statehouse. In addition, federal aid flows contingent on formulas which include population could also decrease. Although state programs which are automatically pro- tected against inflation through cost-of-living escalators fare reasonably well, this is not the case with aid to localities, he said. Such assistance is generally not adjusted for inflation and is subject to discretionary spending deci- sions, Peterson said. "So, state aid to local governments is a logical candidate for bearing a large share of any reduc- tion.., made at the state level," he added. Guideposts to the '80s In sum, the responses of the states and the cities during the next few years will surely provide the guideposts to government in the 1980's. "The thing is that we have 50 dif- ferent state and local systems," Myers said, "and that diversity would imply that there are probably a lot of dif ferent solutions that are going to be worked out." Says Princeton's Nathan, a former Brookings Institu tion scholar, "The states are increasingly going to be governments that are going'to become more and more im. portant in terms of meeting urban needs, especially on th~ part of distressed communities." If the cities and other interest groups, both Public anC private, who are concerned with urban problems, turn their attention from Washington to their state capitols, only then will the rhetoric of calls for less federal dominance be answered. "The great political activity in the next 10 years," U.S. Senator Nancy Kassebaum (Kan.) told NCSL's State- Federal Assembly, "is going to be at the state level." She said state legislatures will need "innovative, creative leadership to take the lead. If something is worth doing, then it's worth fighting for in the legislatures, the county commissions and the city councils," Kassebaum said. Given the widespread agreement that federal aid will likely decline, the question before the states is whether, despite their constraints, they can assume more respon- sibility for the hard-pressed cities and other distressed localities. Only innovative, vigorous state action on urban problems will convince those still skeptical of the states on this score. Referents 1. "Bypasing the States: Wrong Turn for Urban Aid," Center for Policy Research, National Governors' Association, Washington, D.C., 1979 2. "Pass-through Federal /kid and Interlevel Finance in the American Federal System 1957-1977," G. Ross Stephens and Gerald W. Olson, University of .Missouri (Kansas City), 1979. 3. "The States and Distressed Communities: Indicators of Significant Actions," Advisory Commission on Intergovernmental Relations and National Academy of Public Administration, Washington, D.C., 1979. 4. "Uixtate: States and Urban Development--Part l (Part [[)," Nadonal Council for Urban Economic Development Information Service, No. 10 and 11, May 19T7 and August 1977. 5. "If You Want the Federal Dollars, You Have to Accept Federal Controlz," RocheLle L. Sta.ndfield. ,VationalJournal, January 19, 1980. pp. 105-109. ,6. ".Experts Expect Financial Problems to Spread to Wide Range of Cities, John Herbers, TheNew York 77mes, March 30, 1980. 7. "The Urban Policy Puz. zle," Carol Steinbach, State Legislatures, May/June 1978, pp. 8-11. 8. "State Community Assistance Initiatives: InnovaL~ons of the Late 70s," Ad- visory Commission on Intergovernmental Relations, Washington. D.C,, 1979. 9. "Significant Features of Fkscal Federalism. 193'B-79." Advisor7 Commission on Intergovernmental Relations, Washington, D.C., 1979. 10. "America's Distressed Cities: Are They Really Bouncing Back?" Carol Stein- bach, State Legkslatures. Nov./Dec. 1978. pp. 11-13. 11. Slate Roles in Local Go vernment Financial ,Vlanagement. John E. Petersen, C. Wayne Stallings, Catherine LavJgne Spain, Government Finance Research Center, Washington, D.C., 1979. 12. Watching and Counting: A Suraey of&ate Assistance to and Superv~vton of Local Government Debt and Financial Admimstration, National Conference o£ State Legmhatures and Municipal Finance Officers. For further information about federal grants-in-aid programs to the cities, contact Susanne Hiegel, staff director of the Urban Development Committee at the NCSL Washington office, 202/624-5418. Dan Pilcher is associate editor of State Legislatures.