September 8, 1972
Page 29887
Mr. MUSKIE. Mr. President, I rise in support of H.R. 14370, the general revenue-sharing legislation before this body. I have long supported the concept of general revenue-sharing legislation. In 1969, and again last year, I introduced general revenue-sharing bills of my own. In both of those years, my Subcommittee on Intergovernmental Relations conducted extensive hearings on general revenue sharing.
Fifteen months ago, when my subcommittee begin revenue-sharing hearings, the prospects of enacting this legislation in this Congress appeared bleak. I did not share that pessimism then, and I am pleased that we are now on the threshold of enacting a 5-year program to provide general support assistance to State and local governments.
Much has happened in the interim to create momentum for revenue sharing. Most significantly, the record accumulated in hearings in both Houses of the Congress underscored the urgent need for general revenue-sharing legislation.
It is unnecessary for me to detail the fiscal crises in our cities and States. Mayors and Governors from across the Nation have consistently detailed their dilemma of having to run State and local governments without the necessary revenue. They have made us all aware of cutbacks they have been forced to make in essential public services.
The fiscal crisis is particularly critical in the cities where mayor after mayor has been forced to lay off city workers because they cannot afford to pay them. The harsh reality is that no matter how hard they try, there is no way without outside help that the cities and States can raise the kind of money they need to meet the rising costs of government.
In short, cities have reached the end of the line. Unless they get help – and get it fast – city after city in this Nation may fall into bankruptcy.
There are some who would blame the fiscal crises in our cities on the inability of urban governments to raise their own revenue efficiently. There are others who would point a finger at the States, insisting State governments have too often denied the cities the power they need to raise adequate revenues and that the States have in too many cases shirked their responsibility to provide cities with financial help.
But now is no time to assess blame. The demise of our great cities would not be just a local or State tragedy, it would be a national tragedy. That is why it is incumbent upon the Senate to see that that tragedy is averted.
And that is why it is vital for this Congress to enact general revenue-sharing legislation.
I believe that the House Ways and Means Committee bill and the Senate Finance Committee version are both reasonable and responsible general revenue sharing bills. For that reason, I could support either if it were enacted into law.
Last year, when I introduced my own bill, I said that any revenue sharing legislation enacted by Congress must meet three criteria.
First, it must channel the most assistance to those cities and counties which need it the most.
Second, it must contain adequate incentives to the States to improve their own systems of raising revenue. For the Congress to pass general revenue-sharing legislation without these incentives would be to give the State governments a carte blanche to perpetuate the inadequate revenue-raising systems that have gotten them and local governments into their current fiscal crises.
Third, it must not gut categorical grant programs.
To meet those criteria, I incorporated some new features into my revenue-sharing bill. First, I incorporated a need factor in the formula for distributing funds to local governments. Second, my bill offered a bonus to those States which utilize the State income tax – a more progressive means of raising revenue than the sales tax or the property tax which most States use to raise revenue. In addition, my bill offered the States the option of utilizing the machinery of the Federal Government to collect State income taxes for them.
I am pleased that both the House and Senate versions incorporate the major thrusts of these provisions.
Most significantly, the bill currently before the Senate does include a need factor in its formula of distribution of shared revenues to State and local governments. As a result, under the Senate bill, the major cities with the greatest need would receive the greatest shares. The bill before the Senate corrects the imbalance that existed under the formula in the administration's original revenue-sharing bill that would have resulted in wealthy suburbs receiving two, three, and four times as much revenue sharing funds per capita as the suffering central cities. I view the inclusion of the need factor in the formula for distribution to the States and localities as one of the most attractive features of this legislation.
Second, the bill before us does include a provision that would allow the States to utilize the machinery of the Federal Government to collect State income taxes for them. This provision should serve as an inducement to the States to make better use of the progressive State income tax.
While the bill we are considering in the Senate does not include as strong an income tax incentive as the House-passed version, the formula for allocations to the States in the Senate bill does include the need factor, which the formula in the House bill does not. As a result, my own State of Maine, which has a high-need factor, will receive $34.2 million in the first year under the Senate Finance Committee's version, as opposed to $19.9 million under the House-passed bill. I wholeheartedly endorse the inclusion of the need factor in the formula for allocating shared revenues to the States.
Third, since this legislation is general revenue sharing legislation it will not undercut any existing categorical grant programs. Rather, it will supplement those programs by providing State and local governments with the funds they need to provide essential services such as providing police and fire protection and garbage collection.
Mr. President, the general revenue sharing legislation before the Senate is in itself no panacea for the financial ills of city and State governments. But, if we are ever to deal effectively with the fiscal woes on the State and local levels, it is essential that we in the Congress begin immediately. Therefore, I offer my unqualified support for Senate passage of H.R. 14370.