Cities Look in Vain For Relief From Feds

FISCAL SQUEEZE

SCENE 1: At the United States Conference of Mayors in January, the mayors yell for help from President Clinton. They want $27 billion for thousands of construction projects from the man who promised to ``rebuild America.''

Scene 2: Mayors utter a collective groan when Mr. Clinton's stimulus package is killed, and they realize that the federal budget deficit-reduction effort is a very modest ``rebuild America.''

Epilogue: Mayors return to an old reality: lots of belt-tightening, budget-slashing, service-reducing, revenue-seeking, and privatizing.

``Cities are in a panic stage today,'' says Philip Kotler, a marketing expert at Northwestern University in Evanston, Ill. ``Most are still thinking the solutions to their problems are handouts of federal money - and raising taxes rather then reform.'' He suggests that cities, large and small, need a vision of their potential to develop marketing skills to shape new directions in tourism and industry. But too many cities are overwhelmed with the picture of not enough money.

In 1992, most cities balanced their budgets by reducing services and expenses, and by raising taxes. Many ran out of funds held in reserve to balance budgets. A National League of Cities survey of 688 cities says 53 percent have expenses exceeding revenues. Long-term solutions are not a high priority.

In addition, mandates that accompany federal and state programs continue to be costly expenditures for cities. ``The trend in Oregon,'' says Jon Nelson, city manager for Corvallis, Ore., ``and everywhere else has been to increase the state and federal mandates without city resources to meet the mandate requirements.''

Bernard Jump, a professor of public administration at Syracuse University, says, ``Environmental laws are chewing up cities. Our demand for higher-quality air and water are ahead of our ability and willingness to pay for it.''

Mr. Nelson says federal mandates to test water at the waste-water-treatment plant in Corvallis comply with the new safe- drinking-water act. ``The state monkeys with the act, too,'' he says, ``and adds regulations. We have to pay for it and explain to Corvallis why we raised their rates.''

IN adjusting to the fiscal squeeze of the last decade, many cities have deferred maintenance and restricted capital investments, as well as eliminated services.

``In the long run,'' Mr. Kotler says, ``this is trouble. The conflict is short-run versus a long-run. I'd like to see more entrepreneurial types involved in cities to energize the forces.'' But most cities, unwilling to cut back on police, fire, and health costs, look somewhere else when budget-cutting. ``What happens,'' Mr. Jump says, ``is that the people least able to bear the burden, the poor, are suffering.''

Jump and others still see a silver lining in the retrofitting of cities. ``Some cities have tried consolidation of services,'' he says, ``to gain savings across contiguous groups of government. It's not for huge cities, but several suburbs, each running [their] own police force, could join and achieve economies that way.

``Obviously, there is a political barrier there, but Indianapolis had a big consolidation a number of years ago. So did Miami, Nashville, and Minneapolis. Cities simply have to look at what they can give up,'' he says.

Many cities are unable or hesitant to raise taxes any higher, which means little money to pay for federal mandates.

In a 1992 report, the National League of Cities concluded: ``If states continue to have no control over soaring mandated costs, they will have no choice but to cut aid to local governments and impose unfunded mandates on localities.''

The mayors' conference and three other national organizations will launch a nationwide campaign called ``Unfunded Mandates Day'' on Oct. 27 to identify problems caused by federal mandates.

``I think every superior level of government,'' Jump says, ``should be compelled to face the cost that they are imposing on other governments.''

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