| Show The Pitfalls of Federal Revenue Sharing By Congressman Gunn McKay i In the ancient city of ot Troy a wooden horse was used to bring soldiers into the barricaded city The handsome gift girt proved to be Troys Troy's downfall as ferocious ferocious fer fer- ocious Greek soldiers were released from the horse and made the difference in overthrowing the Trojans THIS WELL worn parable has a pre pre- sent sent day day parallel in general revenue sharing This program was hailed by mayors and municipal officials throughout through out the country but like the Trojan Horse revenue sharing will bring with it serious problems The first of these problems already Is being felt Revenue sharing was originally origin ally presented to state and municipal officials as a source of new money a program providing funds over and above any other federal assistance available at atthe atthe atthe the time Some of us knew this promise pro mise was illusory and our fears are arenow arenow arenow now being realized The existence of revenue sharing funds has been a convenient excuse to eliminate a variety var varr of federal services to state and local governments IN ADDITION revenue sharing has introduced the federal presence into the regular operations of our cities clues In future future fu fu- ture years the dependence of these lo local local local lo- lo cal governments on federal funds will increase We are arc told that this is acceptable acceptable ac ac- ac because the money has no strings att attached ched But after dealing with the accounting ng requirements the wage rate requirements the civil rights requirements requirements re reo and the disputes over applying applying ap plying the formula our cities and towns are discovering a significant number of strings Furthermore I think these restrictions and controls will increase with the years not diminish Revenue sharing also raises questions about the role of state governments in our federal system Bypassing state gov gov- distributing federal money promotes a special bond between local and national government Although many many many ma ma- ny of our larger cities who can afford to l hire re experts in federal ship have advocated such a tie the smaller and sized medium communities communities' must continue to rely on expertise available available available av av- av- av at the State level if they are areto areto areto to obtain their fair share of federal help ORIGINALLY V THIS concept was based on the assumption that there would exist a fiscal dividend which would be shared with states and governments in need Dr Walter Heller one of the originators of th the concept and former chairman of the Council of Economic Advisors under President Kennedy said Looking be be- beyond ond yond current rising Vietnam costs big and contingent tax increases one can visualize on 8 billion annual automatic growth In Federal revenues re generating new leeway for fiscal divi In fact this fiscal dividend has never materialized Instead the war years cars racked up staggering deficits with the Nixon years alone adding over billion bUllen to this debt IN LIGHT of this I find myself asking ask lug ing Where are the revenues we v are arc going to share A second assumption on which revenue sharing was based was that all states and localities face a a. similar fiscal crisis cri crl sis Recent studies by the Brookings Institution however reveal two things One not all units of local government are arc faced with a n similar fiscal crisis In fact the latest figures indicate that nearly 30 states have accumulated surpluses surpluses sur pluses in their state budgets Second there is a n natural growth of revenues in cities and states slates which may support adequate improvements in services The point is that even though some cities and states face a n fiscal crisis this does not justify revenue sharing with all alt cities and states on an equal basis By giving revenue sharing to everyone ev ev- everyone we limit its value to those who really need it it As House Appropriations Committee Chairman George Mahon said Revenue sharing simply spreads federal federal fed fed- eral money a mile wide and an inch deep ADDITIONALLY V I feel teel that revenue sharing corrodes Congressional responsibility Revenue sharing completely bypasses bypasses by by- bypasses passes the appropriations process of Congress It creates trust funds fund into which monies are paid and out of which pour relief to cities and states It concerns concerns con con- cerns cerns me when those who spend tax money are nor forced to impose taxes and there is a strong historical precedent precedent prece dent the German experience in the Reich of the about the dangers dangers dangers dan dan- gers of this arrangement Even though revenue sharing was enacted enacted enacted en en- acted as a year five program I I Iam am afraid it is here to stay I would have favored legislation keeping funds at the local level perhaps a bill to give federal fed federal fed eral tax credit for Cor raised locally-raised taxes This would keep money at the level it is most needed without federal strings But I firmly believe that general revenue revenue re reo re- re venue sharing is a dangerous and allocation of federal funds andI and andI I I will be most reluctant to support the Presidents President's additional plans for supplemental supplemental supple supple- mental special revenue sharing |
