May 7, 1975
Page 13307
REVENUE SHARING RENEWAL
Mr. MUSKIE. Mr. President, last week renewal of revenue sharing was introduced in the Senate. Though I do not support every detail of the President's bill, I remain a firm supporter of general revenue sharing. For that reason, I am today joining as a cosponsor of S. 1625.
Four years ago the 92d Congress debated the merits of enacting a general revenue-sharing program to provide a new form of financial assistance to revenue-starved State and local governments. As a longtime supporter of revenue sharing, I understood the program's goals at that time to be quite simple. They were:
One. To relieve the fiscal problems of hard-pressed local governments with inadequate or inflexible tax bases.
Two. To reduce the regressive burden of State and local taxes by substituting revenues from progressive Federal income taxes; and
Three. To give people at the State and local levels the resources and the flexibility to develop solutions suited to their unique problems.
General revenue sharing is not – nor was it ever intended to be – a substitute for carefully targeted categorical programs aimed at specific social problems. The proper role for revenue sharing is – and should remain – that of a complement – not a substitute – for a balanced mix of general revenue sharing, block grants, and categorical programs.
As the 94th Congress begins to assess the impact of general revenue sharing, it would be helpful if both its critics and supporters returned to these relatively modest but extremely meaningful goals. When measured by this limited test, I believe the success column for revenue sharing is longer than its critics would have us believe.
In most cases, revenue-sharing funds have gone into worthwhile programs. Hot lunches for the elderly, improved police protection, and new sewage treatment facilities are some of the successes.
In many other instances, State and local taxes have been held down because of revenue sharing. And I might add that in many of our urban areas, holding down property taxes is a worthy social objective.
That is not to say that the first revenue sharing program has been an unqualified success, or that there are not problems that have cropped up. As the 94th Congress considers extending the present program beyond 1976, it faces some tough choices. Some of those choices are necessary because of the flaws that have become evident in the program's first 3 years of operation.
Others are choices that should have been made before revenue sharing was ever enacted, but which were avoided in the spirit of compromise deemed necessary to get any program at all in 1972.
Perhaps the most difficult question of all is if it makes sense, or if we can afford, to give something to everybody under revenue sharing, whether they need it or not. That is what we did in 1972, in order to get a bill.
I personally do not think it does make sense, and I do not think we can afford to give revenue sharing money to certain units of government simply because they exist, but serve no substantial governmental function. I do not think it makes sense, nor do I think we can afford to give money to affluent communities with no demonstrated need for assistance, while big cities with big problems have arbitrary limits imposed on the amount they receive.
So our first tough choice must be to rewrite the revenue sharing formula to insure that greater emphasis is placed on need.
We need to raise or eliminate the ceiling that holds down payments to cities, relative to other communities in the same State. We must find a better way to judge the amount all governments should receive, and adjust the formula where it deprives cities of needed funds because they are located in relatively affluent States. At the same time, we need to revise the current 20-percent floor where it benefits wealthy communities or governments with very limited functions.
A second difficult question facing the Congress in renewing revenue sharing is the matter of incentives for tax reform at the State and local levels.
To be sure, tying tax reform to revenue sharing is not going to be popular with many people. But we must consider the argument of critics that revenue sharing has actually shored up regressive State and local tax systems. For every time a local government has been able to cut property taxes because of revenue sharing, the pressure for reform is weakened.
A third major focus of the revenue sharing debate this year must be on improved civil rights enforcement. The problem here is not one we avoided during the original debate, but one which has reappeared in the administration of the present program.
In our upcoming efforts to enact revenue sharing renewal, we must make it very clear that simply because the funds are free, they are not a blank check to discriminate. We must also assure that the Office of Revenue Sharing has the staff to enforce the law.
And we must also assure for local citizens the opportunity to participate more fully in decisions about how revenue sharing money will be used.
In presenting its recommendations for revenue-sharing renewal, the administration has addressed some – but not all – of these important questions. I am cosponsoring S. 1625, the adminstration's bill, because I share its assessment that general revenue sharing has been an important shot in the arm for our Federal system. I do so – not in the belief that S. 1625 is the final answer in our efforts to build upon the strengths and iron out the flaws of the current program – but in the belief that the legislation can be improved and strengthened by constructive debate.