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BUDGETARY IMPLICATIONS OF A NATIONAL URBAN
POLICY
DEPOS ITO~~Y
HEARINGS
BEFORE THE
TASK FORCE ON
STATE AND LOCAL GOVERNMENT
OF THE
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
NINETY-FIFTH CONGRESS
SECOND SESSION
FEBRUARY 3, 15, 16, AND APRIL 3, 197S
Printed for the use of the Committee on the Budget
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~UiGERS tI~~V~ ~CHUULLB~R~
CAMDENY ft 08102
GOVEPNMFNT DOCUMENN
U.S. GOVERNMENT PRINTING OFFICE
27~-196 WASHINGTON: 1978 TF-8-95-24
(~_~ I 7
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THE COMMITTEE ON THE BUDGET
JIM WRIGHT, Texas
THOMAS L. ASHLEY, Ohio
ROBERT L. LEGGETT, California
PARREN J. MITCHELL, Maryland
OMAR BURLESON, Texas
LOUIS STOKES, Ohio
ELIZABETH HOLTZMAN, New York
BUTLER DEI~RICK, South Carolina
OTIS G. PIKE, New York
DONALD FRASER, Minnesota
DAVID R. OBEY, Wisconsin
WILLIAM LEHMAN, Florida
PAUL SIMON, Illinois
JOSEPH L. FISHER, Virginia
NORMAN Y. MINETA, California
JIM MATTOX, Texas
GEORGE GROSS, Executive Director
BRUCE MEREDITH, Assistant Director, Budget Priorities
NANCY TEETERS, Assistant Director, Economic Analysis
WENDELL BELEW, Counsel
V V WILLIAM LILLEY III, Minority Staff Director
TASK FORCE ON STATE AND LOCAL GOVERNMENT
ELIZABETH HOLTZMAN, New York, Chairman
THOMAS L. ASHLEY, Ohio JOHN J. DUNCAN, Tennessee
PARREN J. MITCHELL, Maryland V
LOUIS STOKES, Ohio V V V V
NORMAN Y. MINETA, California
STANLEY B. COLLENDER, Administrator
V V CHARLES W. WIECKING, Senior Analyst
TASK FORCE ON TAX EXPENDITDRES, GOVERNMENT ORGANIZATION AND REGULATION~
PAUL SIMON, Illinois, Chairman
OMAR BURLESON, Texas JAMES T. BROYHILL, North Carolina
JOSEPH L. FISHER, Virginia BARBER B. CONABLE, JR., New York
NORMAN Y. MINETA, California JOHN H. ROUSSELOT, California
NANCY TEETERS, Director, Economic Analysis Division
CHARLES W. WIECKING, Senior Analyst
NICHOLAS A. MASTERS, Director, Majority Associate Staff
*The task force appeared in a joint hearing on Wednesday, Feb. 15, 1978.
ROBERT $. GIAIMO, Connecticut, Chairman
V VV - DELBERT L. LATTA, Ohio
JAMES T. BRVOYHILL, North Carolina
BARBER B. CONABLE, Ja., New York
MAI~JORIE S. HOLT, Maryland
JOHN H. ROUSSELOT, California
JOHN J. DUNCAN, Tennessee
CLAIR W. BURGENER, California
RALPH S. REGULA, Ohio
(II)
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CONTENTS
Hearings held on- Page
February 3, 1978 1
February 15, 1978 75
February 16, 1978 139
April 3, 1978 235
Statements by-
Altman, Roger C., Assistant Secretary for Domestic Finance, Depart-
ment of the Treasury, accompanied by Emil Sunley, Deputy Assist-
ant Secretary for Tax Policy 270
Edgar, Hon. Robert W., a Representative in Congress from the State
of Pennsylvania, on behalf of Northeast-Midwest Economic Ad-
vancement Coalition, accompanied by John Moriarty, of the Coali-
tion staff 217
Farber, Stephen, director, National Governors' Association 211
Francois, Hon. Francis B., county councilman, Prince Georges County,
Md., and second vice president, National Association of Counties____ 204
Hance, Hon. Margaret T., mayor, Phoenix, Ariz 139
Hall, Robert T., Assistant Secretary of Commerce for Economic
Development 255
Harris, Hon. Patricia R., Secretary, Housing and Urban Develop-
ment 236
Kucinich, Hon. Dennis J., mayor of Cleveland, Ohio 152
Logue, Hon. Frank, mayor of New Haven, Coun 179
Nathan, Dr. Richard P., senior fellow, Governmental Studies Program,
Brookings Institution 19
Peterson, Dr. George, director of public finance, Urban Institute 68, 130
Rivlin, Dr. Alice M., Director, Congressional Budget Office, accom-
panied by Peggy Cuciti and James Verdier 1
Sunley, Dr. Emil, Deputy Assistant Secretary for Tax Policy, U.S.
Department of the Treasury 112
Vaughan, Dr. Roger, the Rand Corp 122
Verdier, James, Deputy Assistant Director for Tax Analysis, Tax
Analysis Division, Congressional Budget Office, accompanied by
Dr. Frank Russek, Tax Analysis Division 76
Wagner, Robert F., chairman, New York City Planning Commission,
appearing on behalf of Mayor Koch of New York 165
Additional information submitted for the record by-
Altman, Roger C.:
Prepared statement 275
Suggested Examples of Proposed National Development Bank-Fi-
nanced Projects 283
Deane, Hon. John, prepared statement on behalf of the National
Conference of State Legislatures with enclosure~. 288
Enclosure to statement entitled, National Urban Policy and
Urban Action Agenda for State Legislatures 289
Farber, Stephen B., prepared statement on behalf of the National
Governors' Association 214
Francois, Hon. Francis B., prepared statement with appendix, on
behalf of the National Association of Counties - 207
Table entitled, "Medicaid Program and Administrative Costs to
Counties, July 1, 1975 to June 30, 1976" 216
Hall, Robert T.:
Factors Causing Business Flight From the Cities 267
Hance, Hon. Margaret T., prepared statement 145
Harris, Hon. Patricia R., table entitled, "Federal Aid As Percent of
Own Source General Revenue For 48 Largest Cities" 247
(III)
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`V
Additional information submitted for the record by-Continued
Logue, Hon. Frank: Page
Prepared statement with enclosures 183
Enclosure to statement:
Letter to Joseph A. Califano Jr., dated February 15,
1978, re concerns over comments on the proposed
1979 Federal budget 186
Attachment to letter entitled, "New Haven's Pre-
liminary Response to Cities and People in Dis-
tress: The National Urban Policy Discussion
Paper, Draft of November 1977" 187
Prepared statement on behalf of the National League of Cities - 200
Mineta, Hon. Norman Y.:
Letter dated February 15, 1978, to Hon. Elizabeth Holtzman,
chairperson, Task Force on State and Local Government, Com-
mittee on the Budget, re administration's investment tax credit
proposal 75
statement entitled, "Urban Policy: A History and A Suggestion"
with attachment 224
Attachment to statement:
A Process for Implementation of a National Investment
Strategy 229
Nathan, Dr. Richard P.:
Appendix entitled, "Projected CDB G Allocations to Entitlement
Jurisdictions in Fiscal 1980, With Urban Conditions Index
and Index Variables" 31
Prepared statement with tables 23
Tables in prepared statement:
Table 1.-Direct Federal Aid As A Percent of Own
Source General Revenue, Selected Cities and Fiscal
Years, 1957-78 - 26
Table 2.-Comparative Growth in Total Federal Grants,
Selected NEQ and Sun Belt Cities 1971-72 Through
1978 26
National Association of Counties, prepared statement with appendix
presented on its behalf by Francis B. Francois 207
National Conference of State Legislatures, prepared statement pre-
sented on its behalf by Hon. John Deane with enclosure entitled,
"National Urban Policy and Action Agenda for State Legislatures__ 288
National Governors' Association, prepared statement presented on
its behalf by Stephen B. Farber 214
National League of Cities, statement presented on its behalf by
Frank Logue 183
Peterson, Dr. George, prepared statement (February 15) 133
O'Neffl, Hon. Thomas P. III, Lieutenant Governor of Massachusetts,
prepared statement 284
Rivlin, Dr. Alice M.:
Prepared statement 8
Tables submitted in oral testimony:
State and Local Government Revenues and Expenditures,
Calendar Years 1973-77 4
Outlays for Grant Programs by Major Purpose, Various
Years 5
Grants to State and Local Governments by Function and
for Selected Programs Important to Cities 5
Simon, Hon. Paul, article from Washington Post dated February 15,
1978, entitled, "Tax Cut Plan Seen Costing Blacks Jobs" 109
Sunley, Dr. Emil:
Economic Impact of Stimulating the Economy~. 121
Prepared statement 114
Vaughan, Dr. Roger, prepared statement 124
Verdier, James, summary and analysis statement with preface by Dr.
Alice M. Rivlin 80
Estimated Cost of Compensatory Federal Programs. 107
Wagner, Robert F., prepared statement 169
PAGENO="0005"
BUDGETARY IMPLICATIONS OF A NATIONAL URBAN
POLICY
FRIDAY, FEBRUARY 3, 1978
HOUSE OF REPRESENTATIVES,
TASK FORCE ON STATE AND LOCAL GOVERNMENT,
COMMITTEE ON THE BUDGET,
Wa.sMngton, D.C.
The task force met, pursuant to notice, at 9 :30 a.m., in room 304,
Cannon House Office Building, Hon. Elizabeth Holtzman, chair-
woman of the task force, presiding.
Ms. HOLTZMAN. Good morning. I would like to open these bearmgs
on the budgetary implications of a national urban policy and of the
implications in the President's budget for urban affairs.
The witnesses before us are distinguished and we will start with
Dr. Rivlin, the Director of the Congressional Budget Office.
STATEMENT OP Bit. ALICE M. RIVLIN, DIRECTOR, CONGRESSIONAL
BUDGET OFFICE, ACCOMPANIED BY PEGGY CUCITI AND ~fAMES
VERDIER
Dr. RIVLIN. Thank you. I have with me Peggy Cuciti from our
Human Resources Group and James Verdier from our Tax Analysis
Group. The testimony is fairly long, but I have shortened it some-
what for reading purposes and will submit the rest of it for the
record.
Ms. HOLTZMAN. Without objection, your full statement will appear
in the record.
Dr. RIvLIN. Madam Chairwoman and members of the task force,
this morning I have been asked to provide an overview of the
President's 1979 budget as it relates to the needs of our Nation's
cities. Such a review may seem premature inasmuch as the President
has promised to submit to the Congress in early spring the adminis-
tration's urban policy initiative, which could entail modifications to
the 1979 budget. Despite this situation, however, the proposed budget
is worth reviewing now, because the President has stated that, as sub-
mitted, this budget reflects the administration's efforts to meet urban
needs. Another reason is that one cannot develop and evaluate pro-
posals for change without a clear understanding of current policies.
The fiscal policy implied by the overall spending and revenue
totals, the choice of particular fiscal instruments, and the priorities
reflected in specific expenditure and tax proposals must all be con-
sidered to determine the likely impact of the budget on cities.
(1)
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2
THE CITtES AND THE ECONOMY
While all Americans have a stake in an effective fiscal policy-one
that will create jobs without generating inflationary pressures-the
residents of our larger and older cities may be most concerned, since
the hardships imposed by weak performance of the national economy
are not distributed evenly throughout the country. Blacks and
youths-the two segments of the population that were hit hardest by
the recent recesssion-make up a large proportion of the total popu-
lation of many central cities. In the third quarter of 1977, the
unemployment rate in central cities was 8.6 percent, down from the
10-percent rate at the worst point in the recession but clearly still
much too high.
Many urban businesses are hard hit as well. When there is a slack-
ening in national demand, older and less efficient plants are usually
the first to curtail operations. And as the economy recovers, these
plants are often the last to resume production. Such plants are more
often found in the older cities of the Northeast and Midwest.
tTnemployment and inadequate demand for business output not
only cause hardship for individuals but also create budgetary diffi-
culties for State and local governments. As unemployment increases,
the demand for services for the unemployed and the poor go up. At
the same time, revenue collections are likely to go down reflecting
reduced levels of economic activity. Faced with this situation and
unable to sustain deficits, State and local governments are often
forced to raise taxes or cut services. These actions make it more
difficult for the Federal Government to achieve its goal of increasing
the rate of economic growth.
Inflation too is a problem for State and local governments. As
employees demand salary adjustments to keep pace with the cost of
living, the cost of providing public services goes up. Also, like other
consumers, governments face price increases for fuel and materials
used in production of public services.
Local governments-cities, counties, and school districts-are most
hurt by inflation for two reasons. First, they rely more heavily on
property taxes, which, unlike the income and sales taxes that provide
most of the revenue raised by State governments, tend to be rela-
tively unresponsive-at least in the short run-to changes in income
and prices. Second, because local governments actually provide most
public goods and services, the impact of price changes on their
budgets is both more immediate and more direct. Federal and State
governments are shielded to some extent from inflationary pressures,
inasmuch as grants constitute a portion of their budgets. They need
not take the inflation immediately into account. When spending in
grants programs fails to keep pace with inflation, it is largely local
governments who must cut back services or raise taxes.
According to CBO's most recent economic forecast, if current
policies are continued, a slowdown in economic growth is likely to
appear toward the end of 1978 and in 1979. The two factors con-
tributing to this slowdown are the fiscal drag implicit in a current
policy budget that has receipts increasing at a faster rate than ex-
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3
penditures and an expected weakening in major components of non-
Federal demand.
In response to similar forecasts, the administration has made tax
cuts the centerpiece of economic policy in its 1979 budget proposals.
To maintain real growth in GNP in the 4.5- to 5-percent range, and
to reduce unemployment below 6 percent by the end of 1979, the
President is proposing tax cuts of $25 billion and spending increases
of $6 billion-1.O percent more than currrent policy.
Concern for the condition of cities and their residents may lead the
Congress to favor more rapid economic growth or the use of alterna-
tive measures to achieve the President's goals. If the congressional
goal is a higher growth rate and a faster reduction in unemployment,
then it should consider further increases in total spending, changes in
spending patterns, or additional tax reductions.
Several employment-stimulating expenditure programs can have
stronger effects on employment growth than do tax reductions, and
these can be more easily targeted toward cities. These include support
for public service employment, antirecession financial assistance, and
local public works projects. In a study published last year, CBO
concluded that dollar for dollar, these types of spending programs
were more effective than a tax cut in creating jobs. CBO expressed.
reservations, however, about the administrative feasibility of increas-
ing spending programs enough to accomplish the same total growth
in employment that could be achieved by a tax cut.
The jobs impact of these employment-oriented grant programs are
heavily dependent on whether State and local governments simply
substitute Federal grant dollars for their own revenues. To the extent
that they do, the net impact of these programs might be either
similar to or smaller than a general tax cut of the same magnitude.
If Federal grant dollars allows State and local governments to tax
at rates lower than they would otherwise, then the impact of the pro-
gram should be roughly equal to a Federal tax cut, albeit with some
delays. If, however, grant funds are used to build surpluses or to
reduce borrowing for major construction, then the net employment
impact would be substantially less, or even negative.
How State and local governments respond to grant programs prob-
ably depends on their fiscal situations. During the recession, State
and local governments as a group incurred operating account deficits
of $2.9 billion in 1974 and $6.2 billion in 1975. Since most State and
local governments are legally constrained from borrowing to cover
the cost of current operations, many were forced to deplete reserves,
cut expenditures, and raise taxes. The longer a recession lasts, the
greater the number of governments that deplete their reserves and
the greater the incidence and magnitude of restrictive actions. Under
such circumstances as prevailed a couple of years ago, one can reason-
ably conclude that State and local governments would respond to
Federal funds by mounting programs that could not otherwise have
been supported and that additional Federal funds would have a sub-
stantial net impact on State and local spending and employment.
[The following information was submitted for the record:]
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4
STATE AND LOCAL GOVERNMENT REVENUES AND EXPENDITURES, CALENDAR YEARS 1973-77
[Dollars in billionsi
1973
1974
1975
1976
11977
Total revenues
193. 5
210. 4
235. 7
264. 7
294. 4
Total revenues in 1972 dollars
180. 3
177. 7
181. 8
192. 1
200. 3
Own-source revenues
152. 9
166. 4
181. 1
203. 7
226. 8
Own-source revenues in 1972 dollars
142. 5
140. 6
139. 7
147. 9
154. 2
Expenditures
Expenditures in 1972 dollars
Surplus/deficit-all funds
Surplus/deficit-operating accounts only
180.5
168. 2
13. 0
4. 1
202.8
171. 4
7. 6
-2. 9
229.8
177. 2
5. 9
-6. 2
246.3
178. 8
18. 4
3. 9
265.3
180. 4
29. 1
13. 6
1 Data for 1977 are estimated using incomplete information for the fourth quarter.
Source: Bureau of Economic Analysis, National Income Accounts.
Dr. RIvLIN. Since 1976, however, the financial status of the State
and local sector has greatly improved. Surpluses, which have been
recorded in operating accounts since the latter half of 1976, ap-
proached $13.6 billion in 1977. "Own-source" revenues have increased
steadily between 1975 and 1977; growth in real terms was 5.9 percent
in 1976 and is expected to be 4.3 percent in 1977. While expenditure
growth has been restrained in both 1976 and 1977, most projections
show substantial increases in 1978.
In these circumstances, a larger portion of Federal grant dollars
is likely to substitute for spending that would take place anyway,
and the net employment impact is likely to be relatively small. Many
individual governments, however, are still experiencing fiscal diffi-
culties, and they continue to be likely to use Federal dollars in ways
that produce substantial effects on employment. Because of this un-
evenness in fiscal condition and its impact on effectiveness of counter-
cyclical grants, both the level of funding and geographic targeting of
these grants are important issues facing the Congress.
To determine the priority assigned to urban needs in the Presi-
dent's budget proposal, one should review the status of both direct
expenditure programs and consider both ongoing programs and pro-
posed legislative changes.
SPENDING FOR GRANTS TO STATE AND LOCAL GOVERNMENTS
In examining the direct expenditure budget, I will limit my com-
ments to the programs that extend grants to State and local govern-
ments. Other programs affect cities and their residents, but their
impacts are indirect and cannot easily be deduced by simple exami-
nation of budgetary totals and legislative proposals.
Some grant programs are more important to cities than others;
yet it is impossible to isolate any one set and call it the "budget for
cities." Almost every grant program provides support to some cities
and almost no program provides support exclusively to cities.
The budget proposed by the President is essentially a current
policy budget, and thus its impact on cities is likely to be little differ-
ent from recent budgets. It includes few major initiatives and few
increases in spending beyond those necesary to maintain' current
service levels in the face of inflation. The President's budget includes
outlays of $85 billion in all grant programs in fiscal year 1979. This
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5
is a 5.9-percent increase over the President's estimate of $80.3 billion
for 1978. If expected price changes are taken into account, grant
outlays in 1979 are expected to decrease by 0.6 percent in real terms.
In assessing these outlay changes, it is important to remember that
this proposal for a year of restrained growth follows a year in which
there were large increases in grant outlays. Between 1977 and 1978,
grant outlays are estimated by the President to increase by approxi-
mately 15 percent. Furthermore, the 1978 base includes a number of
countercyclical programs in which one might have expected expendi-
ture cutbacks in response to improved economic conditions. Instead,
outlays for antirecession grant programs are projected by the budget
to be 4.4 percent higher in 1979 than 1978. An increase of 8.1 percent
is requested in grant programs that provide benefits to individuals
such as AFDO and medicaid. Outlays for all other grant programs
combined are projected to increase by 5.0 percent.
[The following information was submitted for the record:]
OUTLAYS FOR GRANT PROGRAMS BY MAJOR PURPOSE, VARIOUS YEARS
[Dollars in billionsj
1970
1971
1972
1973
1974
1975
1976 -
Transition quarter
1977
1978 2
19792
15.2
17.3
20.4 0.6
27.7 1.0
28.7 .6
33.2 .4
37.4 2.2
10.2 .6
40.7 4.7
46.5 8.6
48.8 9.0
Function and Program
Outlays
Bud
get authority
1977 1978 1979 1977
1978 1979
270 Energy-all grants
300 Natural resources and environment-all grants_
Abatement and control
Construction grants
400 Transportation-all grants
Urban highways
Urban mass transportation
450 Community and regional development-all
grants
Community development grants
Economic development assistance
Local public works
0.07 0.27 0.64 0.07 0.37 0.59
4.19 4.90 5.58 2.61 5.43 5.51
.19 .24 .25 .15 .23 .24
3.53 4.14 4.66 1.98 4.50 4.50
8. 30 9. 56 10. 44 4. 81 8. 34 11. 28
NA NA NA .80 .80 .70
1. 62 1. 91 2. 16 . 46 . 48 2.78
4. 50 6. 70 6. 28 10. 21 5. 00 5.27
2.09 2.58 2.80 .3.25 4.00 4.15
.17 .18 .15 .22 .21 .25
.58 2.29 2.00 5.98 0 0
Grants for
payments to
Total individuals
Programs enacted
to stimulate the
Other economy'
24. 0
28.1
34. 4
41.3
43. 3
49. 7
59.0
15.9
613. 4
80. 3
85.0
8. 9
10.8
13.4
13.1
14.0
16.1
19. 5
5. 1
23. 0
25. 1
2]. 2
1 Includes Emergency Employment Assistance, Job Opportunities Program, Temporary Employment Assistance,
Antirecesnion Financial Assistance and Local Public Works.
2 President's estimates.
Source: COO calcuations based on table H-5, "Special Analyses Budget of the United States, Fiscal Year 1979."
Dr. RIvr~IN. The following budgetary changes, in the table I have
submitted for the record, are detailed in the longer statement, but let
me summarize them very briefly.
[The following table was submitted for the record:]
GRANTS TO STATE AND LOCAL GOVERNMENTS BY FUNCTION AND FOR SELECTED PROGRAMS IMPORTANT TO
CITIES
[Dollars in billionsj
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6
GRANTS TO STATE AND LOCAL GOVERNMENTS BY FUNCTION AND FOR SELECTED PROGRAMS IMPORTANT T9
CITIES-Continued
lDollars in billions)
Outlays
Budget authority
Function and Program 1977 1978
1979 1977 1978
1979
501 Elementary, secondary and vocational educa-
tion-all grants 4.64 5. 19
Elementary and secondary education 2. 34 2. 56
Child development .47 .57
Education for the handicapped . 12 . 24
Emergency school assistance .24 . 28
lmpactaid .72 .74
504 Employment and training-all grants 6.33 9.98
Employment and training assistance 2. 94 4. 15
Temporary employment assistance 2.34 4. 76
506 Social services-all grants 4.38 5.23
Grants to States for social services and
child welfare 2. 53 2.70
Human development services_ 1.35 1. 40
550 Health-all grants - 12.10 12.88
Medicaid 9.88 10.85
Heath Services Administration grants .74 .81
600 Income security-all grants 12.61 13.99
Child nutrition 2.62 2.64
Supplemental food (WIC) . 24 . 36
AFDC 6.35 6.71
Subsidized housing 1.31 1.86
Public housing operating subsidies . 51 . 61
750 Administration of justice-all grants . 71 .65
LEAA .71 .63
800 General purpose fiscal assistance-all grants~. 9.44 9.74
General revenue sharing 6.76 6.83
Antirecessisn financial assistance 1.70 1.57
Taxable municipal bond option_...
All other 1. 06 1.20
5. 95 5. 78 6. 17
3. 02 2.71 3. 17
.65 .51 .66
. 40 .32 . 47
.30 .29 .31
.71 .73 .76
11.09 12.70 3.89
3. 98 4. 85 2.83
5. 96 6. 85 0
4.90 4.66 5.11
2.84 2. 71 2. 52
1. 53 1. 35 1. 48
14.08 12.12 12.75
11.95 10.23 10.69
.90 .81 .89
14. 81 27.83 34. 13
2.61 2.81 2.50
. 53 . 25 . 25
6.85 6.31 6.54
2.28 16.22 22.10
. 69 . 60 .69
. 57 . 58 . 51
.54 .57 .49
9.46 9.21 9.60
6.85 6.66 6.86
1.05 1.57 1.40
.10
1.22 1. 15 1. 20
7. 89
3. 78
.72
. 80
. 33
1.46
10.91
3.79
5. 96
6.22
2.86
2.85
14.54
11.95
1.41
28.38
6.85
. 56
6.85
15.85
.73
. 52
.49
16.45
6.85
1.04
7.09
1.30
Total-all functions 68.40 80.29
85. 02 91. 73 92 50
108.86
NA-not available.
Source: "Special Analysis Budget of the United States Government, Fiscal Year 1979."
Dr. RIvLIN. The effects of the budget submitted by President
Carter on State and local governments result primarily from overall
fiscal policy and secondarily from a number of specific expenditure
and tax proposals. If enacted, these proposals would have both
positive and negative effects on urban problems.
On the positive side, the President has proposed a significant in-
crease in the funding of the title I education program-an increase
of $644 million in budget authority. This expansion would allow
continuation of the program at its real level of effort and the imple-
mentation of a new program that aids school districts with high
concentrations of poor children.
The budget also requests funding to maintain federally supported
public service employment through fiscal year 1979 at the 725,000 job
level. This proposal would assist State and local governments that
have become increasingly reliant on Federal funds to maintain
services.
With respect to general fiscal assistance to State and local govern-
ments, the net result of the President's budget proposals are unclear.
The President has requested more than $1 billion for antirecession
financial assistance, although the current program expires at the end
of fiscal year 1978. Since a significant portion of some city budgets
are funded by this program, serious local budgetary difficulties may
PAGENO="0011"
7
occur if the program is allowed to lapse. The President has indicated
that he will propose legislation either extending the existing pro-
gram or substituting a new program that would continue the flow of
funds to hard-pressed cities, but the specifics of this legislation are
not available.
Another program for which the President's proposals are unclear
is the New York City seasonal financing loan program. Authority
to make loans to the city ends on June 30, 1978. While no funds are
included in the budget, the President has indicated that he would
recommend additional funds if he were convinced this was the only
way to insure continued fiscal solvency for New York City.
Fiscal assistance to State and local governments will also result if,
as the President proposes, a new program of subsidies for taxable
municipal bonds is enacted. This program would allow State and
local governments to issue taxable securities and to receive a Federal
subsidy equal to 35 to 40 percent of interest costs. These direct sub-
sidies would be substituted for the indirect subsidy currently result-
ing from the tax-exempt status of municipal bonds. This proposal
is important to cities because it could broaden the market for munici-
pal securities and thereby lower the costs of borrowing.
In several other areas of the budget, the President's proposals may
have some negative effects. Although the President has proposed full
funding for the community development block grant program, total
outlays for community and regional development grant programs are
estimated to decline because of the phaseout of urban renewal and
local public works spending. In the health area, the President has
proposed several program initiatives that would extend services or
eligibility for reimbursement to many needy children and expectant
mothers, large numbers of whom live in urban areas. These exten-
sions would probably increase the fiscal demands on State and local
governments who share the cost of medicaid with the Federal
Government.
Many of the President's proposed changes in tax policy would also
affect urban areas and their problems. The President's tax reform
proposals would end deductions for State and local sales and gasoline
taxes-but not income and real property taxes. This proposal might
increase voter resistance to tax increases; however, the effect could be
small since most taxpayers receive little benefit from the deduction-
77 percent now use the standard deduction.
The President has also proposed abolishing the tax-exempt status
of most industrial development bonds except for private industrial
plants costing less than $10 million and located in "economically
distressed" areas. Finding an acceptable definition of distressed
areas that is both defensible in principle and administrable in prac-
tice might be difficult; pressures to expand the definition of eligibility
would be hard to resist, and the "target" eventually could become so
broad as to be meaningless.
In reviewing the budget's impact on cities, it must be remembered
that budgets are shaped over a period of years and that the priorities
reflected in this budget are those of past administrations and Con-
gresses as well as of this administration and ultimately this Congress.
If it is determined that urban needs have received insufficient prior-
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S
ity, budgetary changes can be made. But they will take time, for
much of the budget is relatively uncontrollable in the short run.
Only with advance planning and a multiyear commitment to reshape
the budget can the budget be significantly altered to reflect changing
priorities. Thank you.
[The prepared statement of Dr. iRivlin follows:]
PREPARED STATEMENT OF DR. ALICE M. RIVLIN
Madam Chairwoman and members of the task force. This morning I have
been asked to provide an overview of the President's 1079 budget as it relates
to the needs of our Nation's cities. Such a review may seem premature inas-
much as the President has promised to submit to the Congress in early spring
the administration's urban policy initiative which could entail modifications to
the 1979 budget. Despite this situation the proposed budget is worth reviewing
because the President has stated that this budget as submitted reflects efforts
by the administration to meet urban needs and because one cannot develop and
evaluate proposals for change without a clear understanding of current policies.
The fiscal policy implied by the overall spending and revenue totals, the
choice of particular fiscal instruments, the priorities reflected in specific expendi-
*ture and tax proposals all must be considered to determine the likely impact
of the budget on cities.
THE CITIES AND THE ECONOMY
While all Americans have a stake in an effective fiscal policy-one that will
create jobs without generating inflationary pressures-the residents of our
larger and older cities may be more concerned than others since the hardships
imposed by weak performance of the national economy are not distributed
evenly throughout the country. Blacks and youths, the two segments of the
population that were hit hardest by the recent recession, comprise a large pro-
portion of the total population of many central cities. In the third quarter of
1977, the unemployment rate in central cities was 8.6 percent, down from the
10-percent rate at the worst point in the recession, but still clearly much too
high. Many urban businesses are hard hit as well. When there is a slackening
in national demand, older and less efficient plants are usually the first to curtail
operations. As the economy recovers, these plants are often the last to resume
production. Such plants are more often found in the older cities of the North-
east and Midwest.
Unemployment and inadequate demand for business output not only cause
hardship for individuals but also create budgetary difficulties for State and
local governments. As unemployment increases, the demand for services for the
unemployed and the poor go up. At the same time, revenue collections are likely
to go down reflecting reduced levels of economic activity. Faced with this situ-
ation and unable to sustain deficits, State and local governments are often
forced to raise taxes or cut services. These actions make it more difficult for
the Federal Government to achieve its goal of increasing the rate of economic
growth.
Inflation too is a problem for State and local governments. The cost of pro-
viding public services goes up as employees demand salary adjustments to keep
pace with the cost of living. Also, governments like other consumers face price
increases for fuel and materials used in the production of public services.
Local governments-cities, counties, and school districts-are most hurt by
inflation for two reasons. They rely more heavily on property taxes which,
unlike the income and sales taxes that provide most of the revenue raised by
State governments, tend, at least in the short run, to be relatively unresponsive
to changes in income and prices. Second, because local governments actually
provide most public goods and services the impact of price changes on their
budgets is both more immediate and more direct. Federal and State govern-
ments are shielded to some extent from inflationary pressures inasmuch as
grants comprise a portion of their budgets. When spending in grants programs
fails to keep pace with inflation, it is largely local governments who must cut
back services or increase taxes.
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According to OBO's most recent economic forecast, if current policies ar~
continued there is likely to be a slowdown in economic growth toward the end
of 1978 and in 1979. The two factors contributing to this slowdown are the
fiscal drag implicit in a current policy budget that has receipts increasing at
a faster rate than expenditures and an expected weakening in major com~
ponents of non-Federal demand.
In response to similar forecasts, the administration has made tax cuts the
centerpiece of economic policy in its 1979 budget proposals. To maintain real
growth in GNP in the 4.5- to 5-percent range and to reduce unemployment
below 6 percent by the end of 1979, the President is proposing tax cuts of $25
billion and spending increases of $6 billion-1.O percent more than current
policy.
Concern for the condition of cities and their residents may lead the Congress
to favor more rapid economic growth or the use of alternative measures to
achieve the President's goals. If the congressional goal is a higher rate o~
growth and a faster reduction in unemployment, then it should consider further
increases in total spending, changes in spending patterns or additional ta~
reductions.
There are several employment-stimulating expenditure programs that can
have stronger effects on employment growth than do tax reductions and can
be more easily targeted toward cities. These include support for public service
employment, antirecession financial assistance, and local public works projects.
In a study published last year, CBO concluded that dollar for dollar, these
types of spending programs were more effective in creating jobs than a tax cut.
CBO expressed reservations, however, about the administrative feasibility of
increasing spending programs enough to accomplish the same total growth in
employment that could be achieved by a tax cut.
The jobs impact of these employment-oriented grant programs are highly
dependent on whether State and local governments simply substitute Federal
grant dollars for their own revenues. To the extent that they do, the net impact
of these programs might be either similar to or smaller than a general tax cut
of the same magnitude. If Federal grant dollars allow State and local govern-
ments to tax at rates lower than they would have otherwise, then the impact
of the program should be roughly equal to a Federal tax cut albeit with some
delays. If, however, grant funds are used to build surpluses or to reduce bor-
rowing for major construction, then the net employment impact would be sub-
stantially less, or even negative.
How State and local governments respond to grant programs probably de-
pends on their fiscal situations. State and local governments as a group incurred
operating account deficits during the recession: $2.9 billion in 1974 and $6.2
billion in 1975. Since most State and local governments are legally constrained
from borrowing to cover the cost of current operations, many were forced to
deplete reserves, cut expenditures and raise taxes. The longer a recession lasts,
the greater the number of governments that deplete their reserves and the
greater the incidence and magnitude of restrictive actions. Under these circum-
stances, it is reasonable to conclude that State and local governments would
respond to Federal funds by mounting programs that could not otherwise have
been supported and that additional Federal funds would have a substantial
net impact on State and local spending and employment.
Since 1976, however, the financial status of the State and local sector has
greatly improved. Surpluses, which have been recorded in operating accounts
since the latter half of 1976 approached $13.6 billion in 1977. Own-source
revenues have increased steadily between 1975 and 1977; growth in real terms
was 5.9 percent in 1976 and is expected to be 4.3 percent in 1977. While ex-
penditure growth has been restrained in both 1976 and 1977, most projections
show substantial increases in 1978.
In these circumstances a larger portion of Federal grant dollars are likely to
substitute for spending that would take place anyway and the net employment
impact is likely to be relatively small. Many individual governments however,
are still experiencing fiscal difficulties and they continue to be likely to use
Federal dollars in ways that produce substantial employment impacts. Because
of this uneveness in fiscal condition and its impact on effectiveness of counter-
cyclical grants, both the level of funding and geographic targeting of these
grants are important issues facing the Congress.
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10
PEIORITIES REFLECTED IN THE BUDGET
To determine the priority assigned to urban needs in the President's budget
proposal, one should review the status of both direct expenditure and tax
expenditure programs and consider both ongoing programs and proposed legis-
lative changes.
SPENDING FOR GRANTS TO STATE AND LOCAL GOVERNMENTS
In examining the direct expenditure budget, I wifi limit my comments to the
programs that provide grants to State and local governments. Other programs
affect cities and their residents but their impacts are indirect and cannot easily
be reduced by simple examination of budget totals and legislative proposals.
Some grant programs are more important to cities than others and yet it is
impossible to isolate any one set and call it the "budget for cities." Almost
every grant program provides support to some cities and almost no program
provides support exclusively to cities.
The budget proposed by the President is essentially a current policy budget
and thus its impact on cities is likely to be little different from recent budgets.
It includes few major initiatives and few increases in spending beyond those
necessary to maintain current service levels in the face of inflation. The
President's budget includes outlays of $85 billion in all grant programs in fiscal
3rear 1979. This is a 5.9-percent increase over the President's estimate of $80.3
billion for 1978. If expected price changes are taken into account, grant outlays
in 1979 are expected to decrease by 0.6 percent in real terms.
In assessing these outlay changes it is important to remember that this pro-
posal for a year of restrained growth follows a year in which large increases
in grant outlays took place. Between 1977 and 1978 grant outlays are estimated
*by the President to increase by approximately 15 percent. Furthermore, the
1978 base includes a number of countercyclical programs, in which one might
have expected expenditure cutbacks in response to improved economic condi-
tions. Instead outlays for antirecession grant programs are projected by the
budget to be 4.4 percent higher in 1979 than 1978. An increase of 8.1 percent is
requested in the programs such as AFDO and medicaid that provide benefits
to individuals. Outlays for all other grant programs combined are projected to
increase by 5.0 percent.
The aggregate increases proposed by the President are not evenly distributed
among all budget functions. Funding changes and program initiatives of particu-
lar importance to cities are proposed in several areas.
Education.-Outlays for elementary and secondary education grant programs
are expected to increase by 14.6 percent in 1979 to $5.9 billion. The fiscal year
1979 request for budget authority is $7.9 billion. An increase of $644 million in
budget authority is requested for title I grants-enough to offset price increases
in the base program and to initiate a new program that provides funds to
school districts with especially high concentrations of poverty children. A sub-
stantial increase is also requested for the education for the handicapped
program.
Employment and Training.-The budget includes $11.1 billion in outlays and
$10.9 billion in budget authority for employment and training grant programs
in 1979. The most important aspect of the President's budget in this area is
the decision to fund 725,000 public service employment jobs-the same number
as will be supported at the end of fiscal year 1978. All jobs would be funded
under title VI of the CETA program rather than through titles II and VI as in
past years. This will result in some shifts in the allocation of job slots among
geographic areas.
The President has requested budget authority for 1979 for youth training
and employment programs which, when combined with previously available
funds, will permit operation of these programs at the peak level achieved in
1978, but not allow expansion.
The budget also includes a request for $400 million, $250 million of which
would be used in 1979, for new but unspecified, training programs designed
* and operated by private industry. While listed as a new initiative, this pro-
gram appears similar to the current skill training improvement and help
through industry retrainmg and employment programs. Both of these were
funded in 1977 and 1978 but no new budget authority is reauested to continue
them in 1979.
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Social Services.-The budget calls for $4.9 billion in outlays and $6.2 billion
in budget authority for social service grant programs in 1979. The only major
increase in this area is for child welfare services intended to improve foster
care and adoption services. The budget also calls for continuation of the $200
million added to the title XX program in 1978 for child care services. However,
no change is requested with respect to the $2.5 billion ceiling that was legis-
lated in 1972. Thus, States that are utilizing their full title XX allotments can
receive no funding increases. For some States, including several where large
cities are located, this ceiling has meant reductions in real levels of Federal
support for several years.
Community and Regional Development .-T he President's budget includes
$6.3 billion in outlays for grant programs in this area, a reduction of 6.7 per-
cent from 1978 levels. The reduction in outlays is largely attributable to two
programs. Spending in urban renewal will be lower than in 1978 as projects
under the old program are closed out. Also, spending in the local public works
program starts to phase down as no new budget authority is requested for this
countercyclical program.
The President has requested $5.3 billion in new budget authority for com-
munity and regional development grant programs, an increase of 5.3 percent
over 1978. This will fully fund the community development block grant pro-
gram, and provide some increases for the economic development assistance
grant programs. Increases requested in the budget for the regular EDA pro-
gram are substantiaL A supplemental appropriation of $117 million is asked
for 1978, thereby increasing the program by one-third. A further increase of
$128 million is requested in 1979. Most of the increment is scheduled to be used
for business development grants and loans, and for economic and trade adjust-
ment assistance. Cities are expected to benefit disproportionally (relative to
past funding patterns) from these increases; their funding would double from
$100.4 million under the current appropriation for 1978 to $205 million in 1979.
General Purpose Fiscal Assistance.-T his function includes an estimated
$9.5 billion in outlays and $16.5 billion of budget authority in 1979. In fiscal
year 1978, outlays and budget authority are estimated in the budget, to be
$9.7 billion and $9.6 billion respectively. The fiscal year 1979 outlay figure is
$280 million lower than 1978, largely because outlays in the antirecession
financial assistance program are expected to decline with improvements in the
national unemployment rate. Budget authority, on the other hand, shows a
significant increase due to the proposal for subsidies for taxable municipal
bonds.
The authorization for the antirecession financial assistance program expires
at the end of fiscal year 1978. Since a significant portion of some city budgets
are funded by this program, serious local budget difficulties may occur if it is
allowed to lapse. The President has indicated that he will propose legislation
either extending the existing program or substituting a new program which
would continue the flow of funds to hard-pressed cities. The budget authority
request of $1.04 billion for antirecession financial assistance, while below 1978
levels, is $310 million more than would be required for an extension of the
existing program given the administration's unemployment projections.
Budget authority of $7.1 billion and outlays of $99 million are requested to
finance a new program of subsidies for taxable municipal bonds. If the pro-
gram is enacted, State and local governments could issue taxable securities
and receive a Federal subsidy equal to 35 to 40 percent of interest costs. Thus
a direct interest subsidy would be substituted for the indirect subsidy currently
provided as a result of the tax exempt status of municipal bonds. This is
important to cities because it may broaden the market for municipal securities
and thereby lower the costs of borrowing.
Another program of importance to at least one city is the New York City
seasonal financial loan program. Authority to make loans to the city ends on
June 30, 1978. While no funds are included in the budget, the President has
indicated that he would recommend additional funds if he was convinced it
was the only way to insure continued fiscal solvency for New York City.
Healtlv.-The 1979 budget includes $14.1 billion in outlays for health grant
programs of which $12 billion is for medicaid; total outlays in 1978 are expected
to be $12.9 billion.
The President has proposed several budget initiatives and program changes
to improve child health and avoid unwanted pregnancies among teenagers.
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Health assessment and screening services would be extended to an additional
1.7 million low-income children and teenagers not currently eligible for medic-
aid. Medicaid eligibility would also be extended to include all low-income
expectant mothers. These increases in eligibility will probably increase the
requirements for State and local n1edicaid funds. Funding increases are also
proposed for community based health services programs.
Income Security.-Outlays for grant programs in the income security func-
tion are expected to be $14.8 billion in 1979, an increase of 5.9 percent over
1978 levels. The most important Presidential proposal in this area is welfare
reform. It does not show up in 1979 budget totals but would have important
impacts in later years. In addition to the aid which would be provided to some
city residents by the new program, some fiscal relief would be provided to city
governments-directly, if they currently contribute to the costs of categorical
programs, or indirectly if State governments respond to their reduced welfare
costs by increasing State aid to cities.
Most housing assistance programs appear in this budget function. Substantial
increases in outlays are shown in 1979 as a number of new housing units built
under the section 8 program move from the construction stage to occupancy
and start receiving rent subsidies. New funding is requested in 1979 sufficient
to make commitments to subsidize an additional 400,000 units for low-income
families. This represents a small increase over the 380,240 new commitments
expected in fiscal year 1978. Included in the budget is a proposal for a new
section 8 moderate rehabilitation program and a significant expansion in the
substantial rehabilitation program. This new emphasis on rehabilitation is also
reflected in a proposed increase in the section 312 direct rehabilitation loan
program found in the community and regional development budget function.
Transportation .-The administration's budget includes outlays of $104.4 bil-
lion in transportation grant programs. This represents an increase of 9.2 per-
cent over 1978 levels. New budget authority requested for grants in this func-
tion equals $11.3 billion. The administration is proposing major legislation
reauthorizing highway and public transportation programs through 1982. In-
cluded in the proposals are a number of changes, mostly administrative rather
than budgetary in nature, that could be important to cities.
The proposed highway legislation includes a program of urban formula
grants which would be distributed directly to local governments and would
replace the existing urban system program. The new program would broaden
eligibility to include any road or street not currently in the interstate or
primary system, whereas previously, urban grants could only be used for roads
designated as part of the Federal aid system. The proposed changes are impor-
taut for cities because they reduce the role of State agencies and increase the
discretion allowed to local officials. Little change in funding levels is involved
in the proposal.
The proposed legislation also adopts uniform local matching requirements
for highway and transit assistance. The local match in noninterstate highway
programs would be decreased from 30 to 20 percent, the same as the matching
rate currently in effect for transit programs. The legislation would also change
matching requirements pertaining to interstate transfers: It would extend the
lower match (10-percent local funds) required in the interstate program to
any highway or transit project substituted for withdrawn interstate highway
segments.
New budget authority of $2.8 billion is proposed for urban mass transporta-
tion grant programs. The budget authority request includes funds for discre-
tionary capital grants, which in the past have been funded by multiyear
contract authority provided in 1973 and 1074. In general, the budget allows no
increase for capital purposes but it includes a small increase for operating
subsidies as called for in section 5 of the current law.
Proposed reauthorizing legislation for the UMTA programs would increase
the proportion of total funds that are to be distributed by formula rather than
on a discretionary basis. The funds which are shifted into the formula grant
program would still have to be used for capital purposes only:
Energy.-The President's budget includes outlays of $190 million in 1978 and
$548 million in 1979 for energy conservation grants-a substantial increase
over 1977, when only $6 million was devoted to this purpose. Cities would
benefit from two of the energy conservation programs. The residential and
commercial program would provide financial assistance to low-income families
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13
to insulate their homes. The State/local grants program would finance archi-
tectural and engineering studies of ways to reduce energy consumption in
hospitals, schools, and local public buildings. No funds, however, may be used
for the implementation of these energy savings plans.
Natural Resources and Environmeflt.-In the natural resources and environ-
ment function, outlays are expected to equal $5.6 billion in 1979, an increase
of almost 14 percent over fiscal year 1978. The request for budget authority
equals $5.5 billion. Of particular importance to cities is the Environmental
Protection Agency's construction grant program which provides funds for the
construction of waste-water treatment facilities necessary to meet national
water quality goals. Outlays in this program are expected to increase from
$4.1 billion in 1978 to $4.7 billion in 1979. The President has requested an
additional $4.5 billion in budget authority to fund new projects.
PROPOSED TAX LAW CHANGES THAT MIGHT AFFECT CITIES
Federal priorities are reflected in the tax expenditure as well as the direct
expenditure budget. The President has proposed a number of changes in the
tax code, several of which may have an impact on cities.
Certain tax expenditures have made it somewhat easier for State and local
governments to levy taxes or borrow money. The deductibility of State and
local taxes, for example, may reduce the resistance of local voters to tax
increases, while the tax exemption for municipal bond interest permits States
and localities to borrow at lower interest rates. The President's tax reform
proposals would end deductions for State and local sales and gasoline taxes
(but not income and real property taxes). This is not likely to have a signifi-
cant effect on State and local financing decisions, however, since most tax-
payers receive little benefit from these deductions (77 percent now use the
standard deduction and the tax saving is very small for the remainder who
itemize).
It has been argued that a number of tax provisions-especially accelerated
depreciation and the investment tax credit-have the effect of favoring new
construction over the repair, maintenance, and rehabilitation of existing prop-
erty, and are thus biased against central city development. The President's
tax proposals would eliminate accelerated depreciation for new commercial
and industrial buildings, and reduce it for new residential buildings. However,
be has also proposed to extend the investment tax credit-which now applies
only to machinery and equipment-to new industrial and utility structures.
This by itself could have a negative impact on cities, since new construction
is more likely to take place outside city boundaries where land is cheaper and
more easily assembled. In an attempt to alleviate this problem, the President
proposed that the investment tax credit also be permitted for the costs of
rehabilitating structures. Whether this would offset the potential antiurban
bias from extending the investment tax credit to new structures is uncertain
at this point.
The President has also proposed limiting the tax exempt status of industrial
development bonds. Private industrial plant costs could be financed only if
less than $10 million and are located in "economically distressed" areas. A
problem with this and similar geographically targeted tax incentive proposals,
however, is that it will be difficult to find an acceptable definition of distressed
areas that is both defensible in principle and administrable in practice. Pres-
sures to expand the definition of eligibility will become hard to resist, and the
"target" eventually may become so broad as to be no longer meaningful.
CONCLUSION
The budget submitted by President Carter is largely a current policy budget.
It does not call for many spending increases and it relies primarily on tax
reductions to stimulate the economy.
In reviewing the budget's impact on cities it must be remembered that
budgets are shaped over a period of years and that the priorities reflected in
this budget are those of past administrations and Congresses as well as of this
administration and ultimately this Congress. If it is determined that urban
needs have not received sufficient priority, budget changes can be made. But
they will take time, for much of the budget is relatively uncontrollable In the
27-196-78-----2
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14
short rim. Only with advance planning and a inultiyear commitment to reshape
the budget can the budget be significantly altered to reflect changing priorities.
Ms. HOLTZMAN. Thank you. The substance of your testimony is
that this budget does not reflect any kind of drastic reshaping to
address the problems of cities?
Dr. RIvI.IN. Yes; I think that is right, although the President
proposes an additional urban policy package to come within the next
couple months.
Ms. HOLTZMAN. But this 1979 budget, as far as it has been
presented to the Congress at least, does not reflect that reshaping.
Dr. R.IvLIN. I think that is right.
Ms. HOLTZMAN. You mentioned in your statement that the Presi-
dent's proposal to extend the investment tax credit could have
a negative impact on cities since new construction is more likely to
take place outside city boundaries where land is cheaper and more
easily assembled.
I have heard comments from at least one person familiar with
urban matters to the effect that this proposal in and of itself could
undermine any other proposal to enhance the problems cities are
facing.
In your statement you note that the President has attempted to
alleviate the problem of greater incentives to invest outside of city
boundaries, but you cannot yet determine whether his attempt would
offset the potential antiurban bias of the tax credit for new industrial
structures. Would it be possible for you to complete that analysis so
that we could know more clearly what the implications for cities are
of the President's proposed changes in the investment tax credit?
Dr. RIVLIN. I think we could take a further look at it, Madam
Chairman, but the question is inherently very difficult. The extension
of the investment tax credit to structures would, of course, encourage
new building. That is the point of it. Such an extension would allow
a business that is trying to decide between building a new plant or
not building a new plant, some advantage in building a new one.
Extending the investment tax credit to renovation of plants should
help cities and mitigate the incentive for businesses to migrate to
new places. But it is very difficult to tell how much effect this would
have. Mr. Verdier might want to comment more.
Mr. VERDrER. Yes. I think, as Dr. Rivlin suggested, extending the
investment tax credit to rehabilitation helps keep it neutral in the
case of a plant that is really trying to decide whether to move out
and build somewhere else or to renovate and stay where they are.
The problem is that most plants really do not have that option. For
a lot of reasons, it is often just not realistic for a lot of reasons to
rehabilitate in the central city, so the choice really is to go out or to
stay and not do too much more.
Another problem is that most-by far the great bulk-of the con-
struction in the country is new buildings, not rehabilitation. So
overall, there is going to be a lot more subsidy going to new struc-
tures than to rehabilitation of old ones.
Another problem is that, while the investment tax credit is ex-
tended to industrial and utility structures, it is not extended to
commercial buildings-office buildings, shopping centers, and so
PAGENO="0019"
15
forth-which are more likely to be constructed in the central city than
are industrial plants. Extending the investment tax credit to commer-
cial buildings would be very costly because there are probably twice as
many of them built-in terms of value of construction-than indus-
trial buildings.
An offsetting consideration is that construction costs are generally
higher in cities. So if you give the same percentage incentive for cost
of construction in the cities and in the suburbs, this might tend to
offset a bit the disadvantage cities now have because of their high
construction costs. Probably this is not a very large factor but it
exists.
Two other minor features in the investment tax credit that are
relevant are that right now, firms with either low tax liability or very
high expenditures on new investment do not benefit as they might
otherwise because you can only offset 50 percent of your tax liability
with the credit. You can carry the remainder forward or backward
to a time when you have greater tax liability. The President would
extend that to allow you to offset 90 percent of your tax liability; so
this would help new and growing firms in the suburbs with high
investments and low tax liability, but it would also help low-profit
declining firms, which tend to be in the inner cities.
The final, relatively minor, thing is that a full investment tax
credit would now be provided for pollution control equipment that
has to be added onto old buildings. Now they only get half plus some
rapid writeoffs under the depreciation provisions. This is likely to be
of some help to older plants in the central cities that, under the
pollution control laws, must install new equipment. They get a little
extra benefit under the President's proposal for that. So it is a com-
plicated mix that has to be balanced. It is by no means clear where
you come out at the end.
Ms. HOLTZMAN. Dr. Rivlin, your staff has done a very extensive
analysis in preparation for these hearings. It is very helpful. It
seems to me that if the country is to adopt a rational policy for the
survival of cities, it would make more sense to encourage industrial
plants to remain in cities rather than to move out.
Mr. Mineta, do you have any questions at this time?
Mr. MINETA. No; thank you.
Ms. HOLTZMAN. Dr. Rivlin, you suggested in your prepared state-
ment that the distress of cities is not a uniform factor and while
there have been surpluses generated at some State levels and while
some areas of the country are in good shape, many are not. It that
correct?
Dr. RIvLIN. That is correct. You happen to be very familiar with
the circumstances of one that is not.
Ms. HOLTZMAN. Very. Would you agree that we should target our
programs to the cities that are facing this kind of hardship, rather
than providing assistance generally to all cities, regardless of their
financial condition?
Dr. BIvLIN. That is clearly one approach. I think the answer is,
yes, the current circumstances suggest that there is really great diver-
sity in the fiscal condition of cities-tremendous distress in a few and
a generally improving situation for most other State and local gov-
PAGENO="0020"
16
ernments. To help the distressed few means finding a way of getting
the money there without spreading it around more generally. Such~
targeting is hard to do.
Mr. MINETA. Would the Congresswoman yield?
Ms. HOLTZMAN. Yes.
Mr. MINETA. Is that really a problem of the substance of the pro-
gram, or one of a political consideration within the I-louse, or within
the Congress, of trying to get such a program through?
Dr. 1RIVLIN. I think it is both, There are technical problems in how
you define distress and how you construct a formula for targeting
that will get the money into the places of greatest need. Once you do
that, there is the political problem of whether you can get it passed.
Mr. MINETA. If we were to approach this from the viewpoint of
establishing various national goals-for example in housing, unern-
ployment rates, et cetera-which we would then present to the local
community as a basis for negotiation between the Federal Govern-
ment and the various local agencies, might we not be better able to
mobilize all public revenues in a concerted plan?
Such a negotiated outcome should maximize its impact on private
investment in local communities. Through that kind of negotiation..
technique we would be able to recognize that different urban areas will
require different kinds of programs. For example, Newark, N.J., is
vastly different from San Jose, Calif.
Dr. RIvLIN. That is certainly true, and I think, then, there are two~
approaches to it. One is to let the local government decide-to have~~
a fiscal help program for cities that has some kind of formula that.
gets the money to, say, San Jose and Newark and that then lets the
local governments decide what to do with it. You are suggesting
something other than that; a partnership with the Federal Govern-
ment in which somebody approves and reviews and works over the.
city plan. That sounds like model cities program, which goes back
to the 1960's. This system has some advantages; it also some great
disadvantages, especially: Who do we have in the Federal Govern-
ment that the Congress and everybody else will trust to make the
decisions in the best interests of individual cities. It becomes a very
difficult administrative problem.
Mr. MINETA. We experienced this kind of negotia.tion with what
was called annual arrangements. We had a number of cities chosen-.~
I think back in 1972-in what was the predecessor to the block grant
approach where we did it on a negotiated basis. From my own~
experience as a mayor of a city of 550,000, that was one of those cities
involved in that annual arra.ngements process, it worked out relatively
well and we were able to tailor our local needs to the resources that~.
were available through the Federal Government.
Dr. RIVLIN. I think it has great advantages. The risks, however,..
are that a city with an astute mayor and some good project proposal
drafters can fare better than a more distressed city that happens not
to put its case terribly well. It leaves matters in the hands of grants-.
men and can lead to possible inequities in the distribution of funds.,
Mr. MINETA. Thank you.
Ms. J-IOLTZMAN. Dr. Rivlin, I notice on page 9 of your testimony-
that you said if you take inflation into account, grant outlays to
PAGENO="0021"
17
`State and local governments in the President's budget for 1979 are
expected to decrease by 0.6 percent in real terms. In other words,
State and local governments are going to get a real cut in the grants
that they receive from the Federal Government?
Dr. RIvLIN. That is right. Overall, the total grant figure does not
increase in real terms.
Ms. I{OLTZMAN. But there are portions of the Federal budget that
do increase in real terms for 1979; is that not correct?
Dr. RIvLIN. That is right.
Ms. HOLTZMAN. Defense, for example, increases by 2.6 percent in
real terms, roughly?
Dr. RIvLIN. Yes. That depends on what you think inflation is going
to be in defense; but there is some real increase there.
Ms. I-IOLTZMAN. And real increase in the energy area?
Dr. RIvLIN. Yes; I believe so.
Ms. HOLTZMAN. In light of the fact that grants to State and local
governments are going to decrease on a real basis for 1979 while there
will be real increases in other sectors of the budget, would you say
President Carter's 1979 budget is procity, neutral, or anticity?
Dr. RIvLIN. I think with respect to cities, the situation is as I
said-approximately a current policy budget. It continues what has
been going on. Now a bit depends on the base of your comparison.
If you go back to, say, the budget proposed by President Ford for
fiscal year 1978, this budget moves more toward city programs
because last year the President and the Congress added a largely
countercyclical program to benefit cities-public service employment,
countercyclical revenue sharing, and a couple of other things. Those
`are continued in this budget at roughly current service levels, but
they are indeed continued.
So it is not a budget that moves against cities in that sense, but
~t certainly cannot be characterized as a budget that moves procity,
given where we are now.
Ms. HOLTZMAN. Mr. Mineta do you have any further questions?
Mr. MINETA. Thank you. Since there has been a great deal of dis-
cussion about whether or not Federal programs and policies impact
negatively on local government; I wonder if what this budget is
really trying to do, is to get to a neutral position, so we might be in
a position then to start changing policies and programs so that they
might all work together and avoid this situation where programs
and policies are working at cross-purposes and are counterproductive.
It seems to me maybe we must make that kind of move. I am
wondering whether or not this budget is that first step in moving to
a neutral position. The second step would then be to start targeting
resources so they will have a positive effect instead of a negative
effect on local government.
Dr. RIVLIN. That might be a better question to address to the
administration. But my own feeling is that you are probably right.
I was not privy to the discussions that went into making up this
budget, obviously, but it does appear to be a budget that reflects
thinking along those lines in that it seems to say, "Let's hold every-
thing until we make up our minds what an urban policy ought to
be." And that really means, "Let's go on doing roughly what we
PAGENO="0022"
18
have been doing, adding a few things here and there." There is a
significant increase, as I noted, for example, in the education budget
targeted toward disadvantaged children. That represents a distinct
move.
But otherwise it is a budget that reflects a policy of: "Let's go on
doing what we have been doing until we formulate an urban policy"-
which is promised for later in the year.
Mr. MINETA. If our economic condition is improving, and the
President says we have created 4 million new jobs with a net of
1.8 million off the unemployment rolls-why is there an increased
amount available for countercyclical assistance?
Dr. RIvraN. I think that might be taken to reflect the view that
there are still substantial employment problems, that many of them
are in cities, and that cutting back on countercyclical programs-as
one might have expected at this stage of the business cycle-would
be less than neutral policy. Cutting back on countercyclical programs
would be harmful to those governments that have come to depend
on it.
Mr. MINETA. I happen to support the countercyclical programs but
I am just wondering why, given this improved economic condition,
there would be an increased amount for those countercyclical pro-
grams.
Dr. RIvLIN. I think another argument one could make is that even
with improving general economic conditions improving, which we do
have, we still have substantial structural unemployment problems.
Those programs do get at the structural employment problem, not
as well as we would like to perhaps, but they are aimed at the long-
term unemployed and that is a reason for keeping them.
It is in that sense a shift of the rationale underlying the programs
themselves from countercyclical to structural as the economy im-
proves.
Mr. MINETA. Coleman Young of Detroit speaks facetiously of mov-
ing from 23 percent unemployment down to 9.8 percent.
Dr. Rrvr4IN. Yes. Nonetheless-
Mr. MINETA. Dr. Ilivlin, if the budget had included specific figures
for home loan guarantees, off-budget agencies, and similar budgetary
items, would your analysis have changed significantly?
Dr. RrvI4IN. I do not know. Maybe Ms. Cuciti might want to
answer that. I think we should answer it for the record.
Ms. Cuorri. I would prefer to answer with a full response for the
record.
[The following information was submitted for the record:]
EFFECT OF FEDERALLY OWNED AND CONTROLLED AGENCIES GOING OFF BUDGET
Our conclusions regarding the impact on cities of this administration's budget
are unlikely to differ if all federally owned and controlled agencies were in-
cluded. In fiscal year 1979, the following entities will be off-budget: Federal
Financing Bank, Rural Electrical and Telephone Revolving Fund, Rural Tele-
phone Bank, Pension Benefit Guarantee Corporation, Exchange Stabilization
Fund, Postal Service Fund, and U.S. Railway Association. None of these engage
in activities that are important to cities.
Federal credit activities, only some of which are reflected in budgetary totals,
are more likely to affect the course of urban development. Unfortunately, little
is known about the distribution of benefits and costs from either Federal loan
PAGENO="0023"
19
programs (direct and guaranteed) or the specialized credit activities of Gov-
ernment-sponsored but privately owned enterprises. While the administration's
budgetary materials provide some financial information on these activities, they
are not sufficient to judge whether policy changes are planned that might affect
cities.
The largest of the credit activities of the Federal Government, and the ones
most likely to have an impact on cities, are those that provide either insurance
or secondary market support for residential mortgages. Federal Housing Ad-
ministration programs are believed to have contributed to the dispersal of
metropolitan populations in the past; whether current programs have the same
effect is uncertain. Even less is known about the effects of actions taken by
secondary market credit agencies, such as the Federal National Mortgage Asso-
ciation (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC),
but it is likely that their policies in part determine the availability of credit
in inner-city neighborhoods. HUD's decision to use part of the tandem financing
authority of the Government National Mortgage Association (GNMA) to pur-
chase mortgages extended to middle-income families in selected city neighbor-
hoods represents one attempt to use secondary mortgage market instruments
to aid inner-city redevelopment.
Ms. HOLTZMAN. Dr. Rivlin I would like to thank you very much
for your excellent testimony. Our next witness will be Dr. Richard P.
Nathan, Senior Fellow at the Brookings Institution.
STATEMENT OP DR. RICHARD P. NATHAN, SENIOR FELLOW,
GOVERNMENTAL STUDIES PROGRAM, BROOKINGS INSTITUTION
Dr. NATHAN. Thank you very much. I have a statement which I
will provide for the record. It contains two tables that I think are~
useful. I will read most of it because it is short, but not all of it.
Ms. HOLTZMAN. Without objection, your entire statement will be
included in the record. You may proceed to read from it or sum-
marize it, as you wish.
Dr. NATHAN. The phrase "national urban policy," to many people,
is synonymous with domestic policy, because so much of our popula~
tion can be classified as urban and since often policymakers take rural
problems and needs into account with considering urban policy.
One way of thinking about the current period is that the Carter
administration is trying to decide what kind of a domestic policy it
should adopt to succeed Nixon's "New Federalism," Johnson's "Great
Society," and the Kennedy "New Frontier."
The reason this is taking so long to decide and that we are receiving
so many conflicting signals about what will emerge is a simple one.
There is no obvious underlying problem on which right now there is
a broad consensus and which could be the centerpiece of a Presi-
dential change in direction in domestic policy.
The domestic pot is not boiling the way it was because of social
issues for the Great Society and because of redtape and fears of
overcentralization in the days of the New Federalism. There is a
kind of general equilibrium on the homefront. Maybe there should
not be, but there is.
In my personal view, there is one problem on which national
domestic policy should be focused, but our political system does not
lend itself easily to doing so. The issue in short is the special needs~
of declining, poverty-impacted core cities, which often have a high
proportion of minority citizens.
PAGENO="0024"
20
Though the United States does not have a national urban crisis,
~we face a situation in which some-but by no means all-big cities
and a few older and large suburban cities are experiencing what can
be called urban crisis conditions. "The" job crisis, "the" welfare crisis,
"the" crisis in education, "the" drug crisis-all of these come together
and are most serious in our old, declining, and isolated core cities and
innerring suburbs. Localized though the infection may be, their
conditions constitute the domestic problem in this country.
For cities that are relatively strong and healthy the question to ask
is, Why should the Federal Government be involved in decisions
about how those cities develop, what their goals are, what kinds of
facilities and services are provided by local government? One of the
great sources of strength of American democracy in our Federal
system is we put a lot of emphasis on local decisionmaking. For
healthy cities it ~eems to me the question is, Why should the Federal
Government make decisions about their growth and development
goals?
The problem is not regions, but cities-distressed cities in the
South-New Orleans, which on everybody's indicator shows up as
having very serious problems. I have visited New Orleans and this
is borne out by observations-and in the West-Compton, Calif.,
which is a suburb of Los Angeles. There are distressed cities in the
South and in the West as well as in the Northeast and Midwest where
distressed cities predominate, although there are many cities in the
Northeast that are in good condition, Kansas City, Columbus, Ohio,
Minneapolis, for example.
It seems to me that a national policy of aiding all regions and
focused on regions as such, particularly if it involves addition mate-
rial expenditures, could just end up exacerbating the special and deep
problems of the true hardship cases-Detroit, New York, New Or-
leans, Newark, St. Louis, Buffalo, East St. Louis, Yonkers, Camden,
and Trenton, N.J., to name some obvious ones.
The United States, unlike most other industrialized democracies,
has a reasonably good geographic balance of major population and
growth centers. This is an asset which in my view obviates the need
for massive and expensive new regional growth policy initiatives in
the 1979 budget.. .
Two important facts about current national policies toward cities
need to be stressed.
Fact No. 1. Even though Federal grants rise relatively modestly
in the proposed 1979 budget by 6 percent, but decline, as you pointed
out, in real terms, there has been a tremendous increase in recent
years in the amount of Federal grants, especially those provided
directly to local governments, namely cities. Traditional views of
American federalism and of other federal nations hold that the
federal relationship is between the national government and the
States. But what has been happening to American federalism, actu-
ally since the Truman y~ars, is that the Federal Government in more
and more areas, and under more and more Federal programs and
regulatory policies, is developing direct relationships with local
governments.
PAGENO="0025"
21
One way of looking at Federal grants in this budget is to say if
you put aside AFDC and medicaid-transfer-type grants-of the:
remaining grants to State and local governments, one-half goes to
local governments. There is a figure in the budget which Dr. Rivhn
did not discuss, that says that $16 billion of this amount goes to
urban areas; perhaps we should look at that figure later on.
Ironically, this increase in direct Federal grants to local govern-
ments occurred very rapidly in a Republican period. It was greatly
stimulated by President Carter's $13 billion economic stimulus pack-
age for 1977 and 1978-over $10 billion of this money goes to local,
governments. All of these issues, the whole stimulus package~ are up
again this year. as well as new legislation for mass transit, LEAA,
and all of the CETA program, that is, title I, title IV.
Ms. HOLTZMAN. If I may interrupt, you just mentioned LEAA is
due for reauthorization again this year. Th~ authorization, as I recall,
was for a 3-year neriod of time.
Dr. NATHAN. I may he mistaken about that. I will have to check.
I appreciate your pointing that out to me.
Fact No. 2 of the. two points I want to put on the record involves
targeting. Federal grant formulas increasingly have been putting
emphasis on older and declining cities-that is. poverty impacted,
structurally isolated cities, particularly in the Northeast and Mid-
west, `but also located in other regions. These hardship cities and
suburbs have been receiving large amounts of Federal aid in recog-
nition of their special and deeper needs as Federal aid to local
governments increases. Recent data show a good fit between the
"TJrhan Conditions Index" we use to measure hardship and Federal
aid increases over the last 3 years. There is a table at the end of my
testimony which develops some data to this effect.
In a nutshell, Federal money increasingly has been going where
the problems are. This wasn't always deliberate, but it has happened.
To the administration's credit, "targeting" has been discussed a num-
ber of times by' the President at press conferences, and has been a
conscious policy of `his administration-particularly the Secretary of
HUD, Mrs. Harris-one that already appears to be having sub-
stantial impact. But the shift is a very recent one.
Table 2 makes the longrun point. It shows eight cities in the
Northeast c~uadrant (the Northeast and the Midwest), and nine cities
in the Sun Belt. all big cities-St. Louis, Buffalo, Cleveland, Boston,
Philadelphia, Detroit, Chicago, Baltimore, and Atlanta; Dallas. Hous-
ton, PhOenix, Birmingham, Louisville, Jacksonville, New Orleans
and Oklahoma City.
From 1972 to 1978, the northern and midwestern cities had in-
creases of Federal aid of 354 percent. These are hardship cities. For
the same years, 1972 to 1978, the nine southern cities had an average
increase of 584 percent. If you look just at the recent period-1975-
78-there has been some shift, although not an overwhelming shift,
toward the hardship cities. I don't think we have done enough tar-
geting and, `indeed, a quote on the bottom of page 5 of my statement
is from a' Presidential news conference where the President made a
strong statement to this effect.
PAGENO="0026"
22
There is a shift, but over the long haul the most important fact
about Federal grants is this: What has been happening to Federal
grants is that federalism is changing; more and more Federal grants
are provided directly to local governments, primarily to the cities
and often targeted on hardship cities, but not to an overwhelming
extent.
Although there has been this discernible new focus on urban hard-
ship conditions, it is a modest targeting effect. I frankly don't think
we have done enough. We are moving in the right direction in terms
of recognizing the hardship conditions of the most distressed cities
under Federal grants formulas. I will skip to page 6. There is an
irony in all of this. At the very time that the Carter administration
is working on its urban policy, the whole idea of targeting, as indi-
cated earlier, is under attack. It is under attack both within and
outside of the administration.
I had a line in my statement which has been deleted by the typist.
It read: "While policymakers fiddle, the interests of the cities may
get burned."
So now to pop the question. In light of these two developments, do
we really want big new urban policies up front? Is it important that
-the Government devise a whole system of new departures for urban
policy?
If, as I am suggesting, we have been making headway in terms of
aiding cities-and more particularly aiding the cities that need help
-the most-it may well be that we should continue on this twin track.
We have an urban policy-an emerging, actually quite sensible,
concern about the right problems in the urban sector. This has hap-
pened without trumpets and flourishes. Each time a bill comes up in
the Congress, concern is expressed in the development of that legis-
lation, as in the case for the community block grant program, for
urban hardship conditions. What we need to be thinking about is not
a big and expensive new urban package, as much as a number of nice
but not ostentatious initiatives which build on what has gone before.
Above all-and I underlined this sentence in my testimony for the
purpose of reading it-the name of the game is formulas. Increased
attention has been paid to formula issues over the last few years.
This should continue. As already indicated, the community develop-
ment block grant program contains an important new dual formula
concept which provides more resources to the most distressed central
cities and innerring suburbs.
What are the missing pieces? I believe the main new item the
Carter administration ought to have on its urban agenda in 1978 is
a development bank-or "Urbank." I am not convinced from the
things I have heard that is the kind of proposal most likely to
emerge from the planning process. Block grants provide funds pri-
marily for operating purposes and shorter-term capital needs. The
missing piece from the urban puzzle is an instrument to meet the
long-term economic development needs of hardship cities.
Another potentially important item for urban policy in 1978 is a
-special jobs fund for older, racially-impacted central cities where
-unemployment levels are disastrously high, despite the fact that the
PAGENO="0027"
23
6.3-percent unemployment rate for January which was just released
an hour or so ago shows further improvement. Such a fund could be
administered by a special committee of Cabinet officers to select
urgent job projects in the most distressed cities.
These apparently are-or were-the main items under considera-
tion for the administration's urban policy statement-first, targeting;
second, Urbank; and third, some more money for the PSE jobs
program.
But this is by no means a full urban agenda. Urban policy is not a
one-time thing. Welfare reform-now floundering-tax policy-
especially the treatment of new investment and other key tax items-
and housing policy-about which little has been heard-are other
vital ingredients. So are mass transit, water treatment, and sewage
facilities, and social services. Those concerned about the problems of
the older and declining cities cannot breathe a sigh of relief and go
on to something else when the Carter administration's urban policy
statement is issued. Constant attention and vigilance are required.
Thank you, Madam Chairman.
[The prepared statement of Dr. Nathan follows:]
PREPARED STATEMENT OF DB. RICHAnD P. NATHAN
The phrase, "national urban policy," to many people is synonymous with
domestic policy, because so much of our population can be classified as urban
nnd since often policymakers take rural problems and needs into account when
considering "urban" policy.
One way of thinking about the current period is that the Carter administra-
tion is trying to decide what kind of a domestic policy it should adopt to suc-
ceed Nixon's "New Federalism", Johnson's "Great Society" and the Kennedy
"New Frontier."
The reason this is taking so long to decide and that we are receiving so
many conflicting signals about what will emerge is a simple one. There is no
obvious underlying "problem" on which right now there is a broad consensus
and which could be the centerpiece of a Presidential change in direction in
domestic policy.
The domestic pot is not boiling the way it was because of social issues for
the "Great Society" and because of redtape and fears of overcentralization in
the days of the "New Federalism." There is a kind of general equilibrium on
the homefront. Maybe there shouldn't be, but there is.
In my personal view, there is one problem on which national domestic policy
should be focused, but our political system doesn't lend itself easily to doing
so. The issue in short is the special needs of declining, poverty impacted core
cities, which often have a high proportion of minority citizens.
Though the United States does not have a national urban crisis, we face a
situation in which some-but by no means all-big cities and a few older and
larger suburban cities are experiencing what can be called "urban crisis condi-
tions." "The" job crisis, "the" welfare crisis, "the" crisis in education, "the"
drug crisis-all of these come together and are most serious in our old, declin-
ing and isolated core cities and innerring suburbs. Localized though the infec-
tion may be, their conditions constitute the domestic problem in this country.
For cities that are relatively strong and healthy the question to ask is why
should the Federal Government be involved in decisions about how those cities
develop, what their goals are, what kinds of facilities and services are provided
by local government. One of the great sources of strength of American democ-
racy is local decisionmaking.
The "problem" is not regions, but cities-distressed cities in the South (New
Orleans, for example) and in the West (Compton, Calif.), as well as in the
Northeast and Midwest. Although, there are many cities in the Northeast and
Midwest that are strong and healthy-for example, Minneapolis, Columbus,
Kansas City.
PAGENO="0028"
24
A national policy of aiding all regions-and focused on regions as such-may
just exacerbate the special and deep problems of the true hardship cases-
Detroit, New York, New Orleans, Newark, St. Louis, Buffalo, East St. Louis,
Yonkers, Camden and Trenton, N.J., to name some obvious ones.
The United States, unlike most other industrialized democracies has a rea-
sonably good geographic balance of major population and growth centers. This
is an asset which in my view obviates the need for massive and expensive new
regional growth policy initiatives in the 1979 budget.
Two important facts about current national policies toward cities need to
be stressed.
Fact No. 1. Even though Federal grants rise relatively modestly in the pro-
posed 1979 budget, there has been a tremendous increase in recent years in
the amount of Federal grants, especially those provided directly to local gov-
ernments, namely cities. Traditional views of American federalism hold that
the Federal relationship is between the national government and the States.
But what has been happening to American federalism, actually since the
Truman years, is that the Federal Government in more and more areas, and
under more and more Federal programs and regulatory policies, is developing
direct relationships with local governments.
Ironically, the increase in Federal grants-in-aid to local governments occurred
at a rapid pace during the Nixon-Ford years. It was greatly accelerated by
President Carter's $13 billion "Economic Stimulus Package" (ESP) for 1977
and 1978-over $10 billion of which goes to local units. All of these issues for
the ESP are up again this year, as well as mass transit, LEAA, and the rest
of CETA.
Looking at total Federal grants for 1979, about one-third of all Federal grants
to States and cities now goes to local governments. If welfare and medicaid
are put to one side for purposes of these calculations, as much as one-half of
the rest of all Federal grants to States and localities in the Federal budget
goes to local governments.
Fact No. 2. Not only is the amount of Federal aid to local governments in-
creasing, but there has been an appreciable trend toward greater "targeting,"
the new code word for helping cities, but unfortunately a concept that is cur-
rently under attack.
Federal grant formulas have been putting emphasis on older and declining
cities-that is, poverty impacted, structually isolated cities, particularly in the
Northeast and Midwest, but also located in other regions. These hardship cities
and suburbs have been receiving large amounts of Federal aid in recognition
of their special and deeper needs as Federal aid to local governments increases.
Recent data show a good fit between the "Urban Conditions Index" we use to
measure hardship and Federal aid increases over the last 3 years. (See table 1.)
In a nutshell, Federal money increasingly has been going where the problems
are. This wasn't always deliberate, but it has happened. To the administration's
credit, "targeting" has been discussed a number of times by the President at
press conferences, and has been a conscious policy of his administration, one
that already appears to be having substantial impact. But the shift is a very
recent one.
Table 2 makes the longrun point. It shows eight cities in the Northeast
quadrant (the Northeast and the Midwest), and nine cities in the Sunbelt, all
big cities-St. Louis, Buffalo, Cleveland, Boston, Philadelphia, Detroit, Chicago,
Baltimore and Atlanta, Dallas, Houston, Phoenix, Birmingham, Louisville,
Jacksonville, New Orleans and Oklahoma City.
From 1972 to 1978, the northern and midwestern cities had increases of
Federal aid of 354 percent. For the same years. 1972 to 1978, the nine southern
cities had an average increase of 584 percent! If you look just at the recent
period (1975-78) there has been some shift, although not an overwhelming
shift, toward the hardship cities.
There is a shift, but over the long haul the most important fact about Fed-
eral grants is this: What has been happening to Federal grants is that federal-
ism is changing; more and more Federal grants are provided directly to local
governments, primarily to the cities and often targeted on hardship cities, but
not to an overwhelming extent.
PAGENO="0029"
25
Although there has been this discernible new focus on urban hardship con-
ditions, it is a modest targeting effect. I frankly don't think we have done
enough. We are moving in the right direction in terms of recognizing the hard-
ship conditions of the most distressed cities under Federal grants formulas.
October 13 at a White Rouse press conference, President Carter, speaking
of the Community Development Block Grant bill, said, "I think that the bill
that I signed this week, the Housing and Urban Development Act of 1977, will
provide us with a base or framework on which we can make substantial mi-
provements in the urban area. The formulas that are being put forward now,
and the Congress is accepting them, will orient more and more of the rehabili-
tation money of all kinds to the more blighted urban areas of the country,
both rural and urban." Targeting is beginning to make a difference. But it has
not made a fundamental and far-reaching difference; we need, as the President
said, to do more rather than less.
I would reiterate that this is not, at least to me, a regional question. It is a
question of focusing on distress whether urban or rural, whether North or
South, and recognizing that the deep infections of some of our older core cities
are, in my opinion, the domestic problem of the Nation.
There is an irony in all of this. At the very time that the Carter administra-
tion is working on its urban policy, the whole idea of "targeting", as indicated
earlier is under attack. It is under attack both within and outside of the
administration.
So now to pop the question. In light of these two developments, do we really
want big new urban policies up front? Is it important that the Government
devise a whole system of new departures for urban policy?
If, as I am suggesting, we have been making headway in terms of aiding
cities-and more particularly aiding the cities that need help the most-it may
well be that we should continue on this twin track.
We have an urban policy emerging, actually quite sensible, concern about
the right problems in the urban sector. This has happened without trumpets
and flourishes. Each time a bill comes up in the Congress, concern is expressed
in the development of that legislation for urban problems and particularly
urban hardship conditions. What we need to be thinking about is not a big
and expensive new urban package, as much as a number of nice but not
ostentatious initiatives which build on what has gone before.
Above all, the name of the game is formulas. Increased attention has been
paid to formula issues over the last few years. This should continue. As already
indicated, the community development block grant program contains an impor-
tant new "dual formula" concept which provides more resources to the most
distressed central cities and innerring suburbs.
What are the missing pieces? I believe the main new item the Carter admin-
istration ought to have on its urban agenda in 1978 is a development bank-or
"Tlrbank." Block grants provide funds primarily for operating purposes and
shorter term capital needs. The missing piece from the urban puzzle is an
instrument to meet the long-term economic development needs of hardship cities.
Another potentially important item for urban policy in 1978 is a special jobs
fund for older, racially impacted central cities where unemployment levels are
disastrously high. Such a fund could be administered by a special committee
of Cabinet officers to select urgent job projects in the most distressed cities.
These apparently are-or were-the main items under consideration for the
administration's urban policy statement-(1) targeting, (2) Urbank, and (3)
an accelerated jobs program.
But this is by no means urban agenda. Urban policy is not a one-time
thing. Welfare reform (now floundering), tax policy (especially the treatment
of new investment and other key tax items) and housing policy (about which
little has been heard) are other vital ingredients. So are mass transit, water
treatment and sewage facilities, and social services. Those concerned about the
problems of the older and declining cities cannot breathe a sigh of relief and
go on to something else when the Carter administration's urban -policy state-
ment is issued. Constant attention and vigilance are required.
PAGENO="0030"
~,,
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PAGENO="0031"
27
Somewhere in all this we have left the States out. Cities are
creations of the States; States really have much more control than
the cities, constitutional control, yet there is a Federal-State relation-
ship.
States have surpluses in their budgets. How can we get a leverage,
so to speak, on the States to be more involved with local government ~
Dr. NATHAN. Indeed. Your observation is important. The first
thing I should say in responding is that the growth of these direct
grants to cities has a counterpart in the terms you suggest; it pro-
duces a relative diminution in the importance of the States. Local
governments are the creatures of the States. John Shannon of the
Advisory Commission on Intergovernmental Relations is fond of
pointing out that, although local governments are creatures of the
States, they are increasingly becoming wards of the Federal Govern-
ment. This is a very basic fact. When things happen to you over a
period of years sometimes you don't recognize it. I think the impor-
tant thing is that we take account of this change.
To answer the second part of your question as to what can be done
to bring the States back into urban policy matters, one of the things
which occurs to me is that in the design of the right kind of an
Urbank there should be several windows. One window should be for
big projects for distressed cities, St. Louis, New York, Detroit; and
another window would be to provide assistance to State community
development agencies. These agencies have been growing and doing
new things. For smaller cities and projects in declining neighbor-
hoods in less distressed cities, Federal policy should be to work
through State development agencies and authorities and help build
up their influence.
Mr. MINETA. You also seem to indicate that formulas really help
in targeting, but it seems to me that formulas really are more of the
cookie-cutter approach. So, regardless of how their need differs,
communities get the same kind of help. We really don't do enough
to target those formulas in terms of substandard housing conditions,
in terms of low income and welfare recipients. I am wondering
whether or not formulas as currently used don't really get away from
targeting.
Dr. NATHAN. There is a tendency in the political process toward
spreading. Every time a new program comes up, all different kinds
of claimants come forward. Whether it is a project grant such as
model cities or a block grant such as the community development
block grant, there is the tendency toward spreading.
It is my view we have to do both things at once. There are some
new ideas as to how we can shift formulas to have a bigger im-
pact on the most needy cities. Take. for example the new block
grant formula which the administration fought very hard to have
adopted. I think they deserve credit for this. Cleveland would have
gotten $13 million under the old formula. Under the new formula,
Cleveland's share-and it is one of the most distressed cities on all
the various indexes-would go up to $36 million. So, there are power-
ful ways you can change formulas.
PAGENO="0032"
28
Someone at a recent Brookings meeting says Urbank is a slogan
in search of a program. I think that's all right. This is the way we
set up new institutions in the United States. Historically, people
think banks have a special aura about them, so we may as well
capitalize on that. TJrbank should be a separate institution with
project authority each year to provide a package of assistance for
selected development purposes in the most hard-pressed cities.
In sum, I think targeting is not something we should think about
just in relationship to formula grants. The distinctive problems of
the declining cities is so much the role of the Federal Government
in urban policy that this concern ought to be one we should take into
account in both areas.
Mr. MINETA. In what way do you see targeting coming under
attack?
Dr. NATHAN. I have done a fair amount of talking to various
groups about the issues you asked me to discuss in this testimony.
The best example I can give you is a specific one. I spoke in Okla-
homa City before the Southern Growth Development Board. Gover-
nor Boren of Oklahoma spoke first. Governor Busby of Georgia
finished me off. He said he was very concerned about, and opposed to
the community development block grant dual-formula concept. It
does not, in his view, take enough account of the needs of other kinds
of communities. From what I read in the newspapers, there have been
a lot of participants in the administration's urban planning process
who have made exactly this point that you have to recognize the needs
of other types of communities. My feeling is that Federal policy ought
really to focus on the needy communities. As I indicated in my testi-
mony, for healthy and strong communities we have a long tradition
of revenue-sharing devices and local decisionmaking.
Mr. MINETA. Thank you.
Ms. HOLTZMAN. Dr. Nathan, what programs do you think need to
be targeted?
Dr. NATHAN. I think the answer to that is that we should take into
account hardship conditions across the board in domestic policy. The
same kind of approach in defining the appropriate needs on which
the Federal Government should focus attention ought to be applied
in the jobs area, in the education area, in the community develop-
ment area, mass transit area, water and sewer, all of which are
functions for which the Federal Government now provides substan-
tial amounts of grant funds which go to local governments. All these
areas were discussed by Dr. Rivlin and are the major functional areas
of the Federal budget for domestic programs.
Ms. HOLTZMAN. The thrust of what you are saying then is that we
could solve all the problems of our fiscally distressed or hardship
cities, as you call them, if we just targeted all our programs?
Dr. NATHAN. I wouldn't want to give the impression we could
solve all the programs but it does help the cities to have this kind of
focus on their needs. We have been doing research in about 50 or so
cities around the country and they have been appreciably aided by
these grants. Detroit, someone mentioned earlier, not only their
PAGENO="0033"
29
economic but their fiscal situation is much better this year. Other
cities have been helped in relieving their fiscal pressures and being
able to make some program increases in areas where they want to
have initiatives. Federal aid has been very important but it doesn't
get at the fundamental economic forces that are at work. These
problems, particularly in the cities most severely affected-New York
is one-are not going to be solved by the kind of targeting implied
in my comments and testimony.
Mr. MINETA. Isn't there a polarization between rural and urban
areas in trying to develop that type of system ~ Even if you have a
city of 17,000, if they have an unemployment problem of 15 percent,
it seems to me for that community, it is just as serious a problem as
it is for New York and Cleveland, again, where they have a lot of
problems.
Is there a way of trying to come up with an investment strategy
that would be applicable to that rural community with its serious
infrastructure problems, high unemployment, declining population,
so we can deal with that as well as the Clevelands, the New Yorks,
and the Newarks as well ~
Dr. NATHAN. I said in my statement that distress in both urban
and rural areas should be focused on in national policy. That is the
appropriate national role. We have been experimenting with differ-
ent ways to measure hardship needs. It is difficult because of the
different layering arrangements, as you know, of governments and
finances.
I would like to submit for the record an appendix to a report that
we have done for HTJD on the community development block pro-
gram. This supplement is for 615 cities; it shows how the hardship
index we use would apply to these cities and the factors which go
into this analysis. It seems to me we could make grant revisions that
move in the direction of your suggestion and not only deal with the
larger cities but deal with distress in smaller urban areas and also
rural areas.
[Testimony resumes on p. 68.]
[The appendix referred to follows:]
27-196 O-78------3
PAGENO="0034"
30
URBAN CONDITIONS INDEX
Reprinted from
Decentralizing Community Development
a report to the
Department of Housing and Urban Development
on the Second Program Year of the
Community Development Block Grant
by
Paul R. Domme].
Richard P. Nathan
Sarah F. Liebschutz
Margaret T. Wrightson
and Associates
The Brookings Institution
Washington, D.C.
January 1978
PAGENO="0035"
31
APPENDIX II
PROJECTED CDBG ALLOCATIONS TO ENTITLEMENT JURISDICTIONS IN FISCAL 1980,
WITH URBAN CONDITIONS INDEX AND INDEX VARIABLES
The table that follows lists the 615 CDBO formula entitlement
jurisdictions for the third program year and their projected block grants
for fiscal year 1980. Columns 6 and 7 list projected grant amounts based
on the original allocation formula and the new formula, respectively. If
a jurisdictions grant under the new formula is greater than that under
the original formula, this means that the jurisdiction benefits from the
dual formula approach. Actual grant amounts will change as later popula-
tion figures are used to make the allocations,
The Brookings urban conditions index (column 1) provides a comparative
measure of distress conditions found in each jurisdiction. The index is
computed from the following formula:
Percent poverty X Percent pre-19140 housing
Mean percent poverty Mean percent pre-l91~0 housing
100 + rate of population change
100 + median rate of population change
Percentages of poverty and pre-l91~O housing are based on the 1970 census,
The index mean is standardized at 100; jurisdictions ranking above that
level tend to have greater problems of urban distress than those lower on
the scale.
For the urban counties listed, the projected 1980 allocations are
based on data elements used by the Department of Housing and Urban Development
to determine grant amounts for fiscal 1978. Not included are small hold-
harmless communities and municipalities who chose not to participate in the
program. The urban conditions index for these counties is based on balance-
of-county data; that is, the population, poverty and housing data for the
entire county minus the population, poverty and housing counts of the
central city (or cities) and any suburban cities over 50,000 population.
PAGENO="0036"
Appendix II. Projected CDBG Allocations to Entitlement Jurisdictions in Fiscal
1980, with Urban Conditions Index and Index Variables
ANNISTON SMSA
ANNISTON CC
BIRMINGHAM SMSA
BIRMINGHAM CC
JEFFERSON UC
FLORENCE SMSA
FLORENCE CC
GADSEN SMSA
GADSEN CC
HUNTSVILLE SMSA
HUNTSVILLE CC
MOBILE SMSA
MOBILE CC
MONTGOMERY SMSA
MONTGOMERY CC
TUSCALOOSA SMSA
TUSCALOOSA CC
ALASKA
ANCHORAGE SMSA
ANCHORAGE CC
ARIZONA
PHOENIX SHSA
PHOENII CC
GLENDALE SC
MESA SC
SCOTTSDALE SC
RECIPIENT
A LA RAHA
PERCENT
PERCENT
URBAN
POPULATION
PERCENT
PRE-1960
CONDITIONS
1975
CHANGE
POVERTY
HOUSING
INDEX
(1)
POPULATION
(2)
1960-75
(3)
1970
(14)
1970
(5)
GRANT UNDER GRANT UNDER
ORIGINAL NEW
FORMULA FORMULA
($ 000) ($ 000)
(6) (7)
2814
30,622
-9.0
27.8
39.7
1,016
278
61
276,273
332,372
-19.0
25.3
22.5
13.3
42.7
26.2
8,286
6,278
1,136
12,146u
93
36,602
8.7
18.0
214.0
750
191
50,357
-13.3
20.2
35.0
1,299
15
136,1119
88.5
10.5
10.8
2,132
1,827
1146
196,14111
.8
23.1
27.2
5,1105
2,132
113
153,3143
16.1
23.1
23.8
3,877
102
69,625
9.6
21.6
22.0
1,722
3,877
1,722
2
161,018
2614.0
6.5
3.7
2,050
2,050
21
666,721
51.11
11.6
11.2
11,199
8
7
65,671
99,0113
313.2
193.3
114.0
9.3
9.9
9.1
921
11,199
921
PAGENO="0037"
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0N-O' NJONNO OCo NOO `-O'O'C-Co
*O'Co CoCo OCoN- C-C_fl (C_IC-Co OCOCoC_fiCo ONJCoN-NJ0 NJN-O ON
`N-N- NCo'-ON CoN- NC_NO NO'OONJ OOC-IONJO'N-NC-'-
0'-N-O'O' NJCo CoC_fiCo O'O'000 NNJ~CoOCoOCo'-N
-Co 00'- CoO 00 Co O'0 000' Co N 00 `-N-Co Co'- NO'
C_NO NJCo N ON- Co 010 (NLtlOCo NJ 00 NJ ON NJ N- NJ0 O'Co
0
N N
0
NN- `-0 NJ'- C_N (NO' NJN
NJC_NCo0 `- `-`-N-NJ
N
0
0
Cl)
PAGENO="0040"
PERCENT
PERCENT PRE-19140
I~OVERTY HOUSING
1970 1970
(14) (5)
GRANT UNDER
ORIGINAL
FORMULA
($ 000)
(6)
PERCENT
GRANT UNDER
URBAN
POPULATION
NEW
CONDITIONS
RECIPIENT
1975
CHANGE
FORMULA
INDEX
(1)
POPULATION
(2)
1960-75
(3)
($ 000)
(7)
SAN MATEO SC 23
ALAMEDA IC 211
CONTRA COSTA UI 15
MARIN UC 22
SAN MATEO IC 17
77,878
256,516
3914,737
217,731
3111,8113
32.7
12.8
39.2
50.1
11.5
6.1
10.0
6.5
6.14
6.1
15.8
147.5
13.5
21.7
17.9
907
3,0511
11,685
2,389
907
3,0511
11,685
2,389
SAN JOSE SMSA
SAN JOSE CC 11
MOUNTAIN VIEW SC 6.
PALO ALTO SC 38
SANTA CLARA SC 53
SUNNYVALE SC 21
SANTA CLARA IC 114
555,707
55,1113
52,277
82,822
102,1162
289,317
*
172.1
78.5
.0
314.0
93.7
40.7
8.6
6.11
6.6
7.6
4.6
6.2
13.9
6.7
214.1
12.5
36.8
111.8
3,6146
7,176
6811
6119
1,097
1,066
3,6116
7,176
6811
925
1,097
1,066
SANTA BARBARA-SANTA MARIA-LOMPOC
LOMPOC CC 11
SANTA BARBARA CC 86
SANTA MARIA CC 27
SMSA
211,296
72,125
33,595
68.5
214.9
67.7
10.8
13.2
11.3
6.9
311.6
17.1
14,053
1112
1,310
11,053
1412
1,310
SANTA CRUZ SMSA
SANTA CRUZ CC 112
36,807
113.8
16.5
111.8
612
612
SANTA ROSA SMSA
SANTA ROSA CC 28
65,087
109.8
11.1
22.6
660
660
STOCKTON SMSA
STOCKTON CC 11
117,600
36.2
16.3
3.6
820
820
VALLEJO-FAIRFIELD_NAPA SMSA
FAIRFIELD CC 3
NAPA CC 22
VALLEJO CC 57
50,2614
146,557
70,681
235.8
110.0
16.1
9.8
8.9
10.0
3.0
21.8
?8.2
.
2,1488
7148
576
2,1488
7148
576
COLORADO
1,135 1,135
COLORADO SPRINGS SMSA
29
179,5814 155.8 11.1 27.8
2,382 2,382
PAGENO="0041"
DENVER-BOULDER SMSA
BOULDER CC
DENVER CC
ARVADA Sc
AURORA SC
LAKEWOOD Sc
FORT COLLINS SMSA
FORT COLLINS cc
GREELEY SMSA
GREELEY CC
PUEBLO SMSA
PUEBLO CC
CONNECTICUT
BRIDGEPORT SMSA
BRIDGEPORT CC
FAIRFIELD SC
MILFORD SC
BRISTOL SMSA
BRISTOL CC
DANBURY SMSA
DANBURY CC
HARTFORD SMSA
HARTFORD CC
EAST HARTFORD SC
WEST HARTFORD SC
MERIDEN SMSA
MERIDEN CC
NEW BRITAIN SMSA
NEW BRITAIN CC
29 78,560
131 14814,531
2 714,2514
3 118,060
7' 120,350
145 55,9814
73 147,362
122 105,312
URBAN
CONDITIONS
1975
PERCENT
POPULATION
CHANGE
PERCENT
POVERTY
PERCENT
PRE-1914O
HOUSING
*
GRANT UNDE1'
ORIGINAL
FORMULA
GRANT UNDER
NEW
FORMULA
RECIPIENT
INDEX
(1)
POPULATION
(2)
1960-75
(3)
1970
(14)
1970
(5)
($ 000)
(6)
($ 000)
(7)
108.3
-1.9
285.9
1143.2
123.7
80.0
15.5
-8.8
25.8
19.3
28.7
137.8
~111.8
27.1
6.8
11.3
_14*14
11.5
13.14
3.6
5.11
14.6
13.9
16.0
13.2
11.5
4 . 1
`4.9
4.7
7.0
16.2
14.3
3.5
6.6
8.14
22.0
141.0
5.0
3.9
6.2
30.7
314.7
`15.14
60.1
30.8
3145
40.7
`45.8
67.0
214. 1
37.3
52.9
514.7
1,087
9,337
575
1,025
1,0314
809
8i~
2, 014 1
2,880
537
581
712
709
3,639
6114
535
760
1,283
178 11,2,960
214 5B,0811
314 `49,7014
58,560
32 5'4,512
298 138,152
20 514,132
29 66,605
714 57,697
113 78,556
1,083
12, 91414
575
1,025
1,0314
809
815
2,014 1
5,085
537
581
712
716
6,518
6114
911
9014
2,238
PAGENO="0042"
URBAN
PERCENT
POPULATION
PERCENT
PERCENT
PRE-19110
GRANT UNDER
ORIGINAL
GRANT UNDER
NEW
CONDITIONS
1975
CHANGE
POVERTY
HOUSING
FORMULA
FORMULA
RECIPIENT INDEX
POPULATION
1960-75
1970
1970
($ 000)
($ 000)
(1)
(2)
(3)
(1')
(5)
(6)
(7)
NEW HAVEN SMSA
NEW hAVEN CC 320 126,8145 -i6.6 16.5 69.2 2,960 5,991
WEST HAVEN CC 58 53,002 23.3 7.2 42.~l 6811 718
NEW LONDON-NORWICH SMSA
NEW LONDON CC 203 30,1456 -10.9 12.2 63.3 522 1,110
NORWICH CC 11444 111,060 6.6 10.0 65.6 629 981
NORWALK SHEA
NORWALK CC 58 76,688 13.2 6.6 42.3 1,059 1,059
STAMFORD SMSA
STAMFORD CC 59 105,151 13.11 7.0 140.5 1,1498 1,1498
GREENWICH SC 111 59,566 10.7 3.9 149.3 5112 8116
WATERBURY SMSA
WATERBURY CC 139 107,065 -.1 9.5 62.2 1,783 2,876
DELAWARE
WILMINGTON SMSA
WILMINGTON CC 11411 76,152 -20.5 21.1 71.5 1,980 11,1211
NEW CASTLE UC 111 321,122 52.7 5.3 16.1 3,3112 3,3112
DISTRICT OF COLUMBIA
WASHINGTON SMSA
WASHINGTON DC CC 193 711,518 -6.9 16.3 117.0 18,389 23,1151
FLORIDA
DAYTONA BEACH SMEA
DAYTONA BEACH CC 1143 118,037 28.5 23.1 33.8 1,232 1,232
FORT LAUDERDALE-HOLLYWOOb SMSA
FORT LAUDERDALE CC 12 152,959 82.9 11.9 7.6 2,6~l5 2,6'IS
HOLLYWOOD CC 14 119,002 237.7 9.8 5.2 1,762 1,762
BROWARD UC 2 5714,735 167.9 10.6 2.0 7,196 7,196
PAGENO="0043"
URBAN
PERCENT
POPULATION
CHANGE
PERCENT
POVERTY
PERCENT
PRE-19110
HOUSING
GRANT UNDER
ORIGINAL
FORMULA
GRANT UNDER
NEW
FORMULA
CONDITIONS
1975
1970
($ 000)
($ 000)
RECIPIENT INDEX
POPULATION
1960-75
(I4)
(5) /
(6)
(7)
(1)
(2)
(3)
FORT MYERS SMSA
FORT MYERS CC
714
36,170
60.6
17.1
29.14
601
691
GAINESVILLE SMSA
GAINESVILLE CC
27
72,236
1113.2
19.7
111.2
1,532
1,532
~rACKSONVILLE SMSA
JACKSONVILLE CC
LAKELAND-WINTER HAVEN SMSA
LAKELAND CC
WINTER HAVEN CC
31
120
131
.
535,030
149,705
18,618
166.1
20.2
114.14
16.8
18.6
20.8
20.9
33.1
30.6
*
11,672
9614
1115
11,672
`
9614
1415
MELBOURNE-TITUSVILLE-COCOA SMSA
COCOA CC
MELBOURNE CC
TITUSVILLE CC
`46
7
2
15,51114
39,821
29,501
26.11
232.3
360.2
17.2
11.8
6.9
114.2
7.5
14.7
365
699
1405
365
699
1405
MIAMI SMSA
MIAMI CC
HIALEAH SC
MIAMI BEACH SC
DADE UC
1111
5
76
10
365,082
117,682
911,063
862,565
25.2
75.7
49.0
68.1
20.3
8.6
18.9
11.3
29.9
3.6
25.14
5.8
*
11,388
2,210
2,'450
111,527
11,388
2,210
2,1150
114,527
ORLANDO SMSA
ORLANDO CC
ORANGE BC
711
8
113,179
273,832
.
28.11
237.8
19.1
11.9
21.0
9.1
2,1428
14,1314
2,1428
~4,13~l
PENSACOLA SMSA
PENSACOLA CC
165
614,168
13.1
.
21.8
36.5
1,6014
1,6014
SARASOTA SMSA
SARASOTA CC
~12
147,089
38.2
17.14
114.2
9011
9014
TALLAHASSEE SMSA
TALLAHASSEE CC
36
83,725
73.8
17.5
114.9
1,6111
1,6141
TAMPA-ST PETERSBURG SMSA
ST PETERSBURG CC
611
2314,389
29.3
15.7
22.~4
14,391
14,391
PAGENO="0044"
URBAN
PERCENT
POPULATION
PERCENT
PERCENT
PRE-19110
GRANT UNDER
ORIGINAL
GRANT UNDER
NEW
CONDITIONS
1975
CHANGE
POVERTY
HOUSING
FORMULA
FORMULA
RECIPIENT INDEX
POPULATION
1960-75
1970
1970
($ 000)
($ 000)
(1)
(2)
(3)
(11)
(5)
(6)
(7)
TAMPA CC
CLEARWATER SC
HILLSBOROUGH UC
PINELLAS UC
122
20
12
7
280,2110
67,069
297,157
326,105
1.9
93.5
1112.0
115.5
18.5
11.8
12.0
10.6
28.6
13.6
10.2
5.3
6,520
950
11,268
11,1511
6,520
950
11,268
11,1511
WEST PALM 13EACH-BOCA
BOCA RATON CC
WEST PALM REACH CC
PALM BEACH BC
RATON
SMSA
1
1211
15
12,363
61,1171
313,795
508.6
9.11
1011.5
6.2
16.5
12.9
3.7
35.0
9.8
1117
1,329
5,330
1117
1,329
5,330
GEORGIA
ALBANY SMSA
ALBANY CC
72
73,373
31.3
211.11
16.11
.
2,259
2,259
ATLANTA SMSA
ATLANTA CC
DE KALB UC
157
8
1136,057
389,239
-10.5
75.5
19.8
14.9
30.3
11.7
12,7711
3,827
111,650
3,827
AUGUSTA SMSA
AUGUSTA CC
1181
5~1,019
-23.5
30.6
51.11
2,095
3,057
COLUMBUS SMSA
COLUMBUS CC
77
159,352
36.5
20.2
22.0
11,105
11,105
MACON SMSA
MACON CC
103
121,157
73.7
22.5
33.7
3,1457
3,1457
SAVANNAH SMSA
SAVANNAH CC
326
110,3118
-26.1
25.8
39.9
3,562
5,823
HAWAII
HONOLULU SMSA
HONOLULU CC
15
705,381 139.8 8.9 20.0
13,0143 13,0143
PAGENO="0045"
41
C
C C C C NJ rfl .- C C C.- C N- C C C C C C C - N-
C 3C CC N-CC CCC CNJCCC C
CIN CN~C N-N-N~CC~ C
3.3 C C N-
C C C -~ C `- NJ ç.J.-~-.-CC
C C4~
C 3..-
(3
3.3-3
o = C-~ C N~ ~NC C C INC CCC NJCC C C C C ~
(3CCC -
CJ-JC - ~CCN
N-
CC ~
(3
CC (3
CCC C CIN CCN- CN-C CCCCN-~)NJ COO
C-CC- `
(3 C N- C - (~-O C `- C N- C N- C CC C C C C N- CCC C C C
C C C CS-' Ni C NJ Ni C C CC N- - C C C N- C `- NJ C C C
C.-
0
CC
C C
C C C~
0 C N-C
CC
C
(-CCC CC'- N-C\JC CC'JCC CJCCNJCCN-CC
CC-J(3N-
C C C I - N- NJ C C\J `- C C C C C Ci C NJ C C NJ C Ni
o C C C Ni I NJ `- C NJ I C NJ I NJ `- `- C N-C
C.-30C-'
C CO C
C
C CNiC .~~CCCCCCC.-N-NiCNiN-CNi C
CC~ NiCC CNCCCCCN-CCCN-CCCN- CC
C _3 C C C C C Ni C C C C NJ C N- C NJ C N- C C
C - -
C
CCC C
C C C C .- C C C NJ C C NJ C C C N- NiC C C NJ C NJ C C N- C
C C C NJ Nfl NJ C NJ C' C C C - C C C C C `- NJ C CC C
CCC'.' NJ C
C
C C C
C C C
0 C C
-3
C
C C
0 0 I
C C C
C C C
C C -3
= -~ C
CO CO C C C 0
CO C CO C C
C CC CO C C 0 00 0 0 0
C C C C 0 CO C C 3~) C C C C CO
C CCO CZOO COC000C 0 0 0 COC. CO
CC 0(30 IC 0 C CCCCCOCCCCCC C 10-3 C
(-`0 CC CC.-3 CCC CCC CC CO 0 C C CC
C ()C.-3 (3CCC C(3CZC.-3 CCCCCOCCC CCC C
C OC CCC CCOC CCCCCCC.CCC~~.CC (3 CC CC
C C C CCC CCCC (3OCCCC CCC CCCCC o~I-4C CC
C CC C CCC C~CZC CC.~3CCOCOC~3CCCCO(-C C-JO CO
C CC C C-JO 00CC OOCCCCC.~3CCCCCCCCC CCC CC
0 CC C CCC COCO COCCCOOCI'J3CCCCOO CCC 00
C C C C .-3 = C C C
O C C ,J C (3 0 0 0
C C -
PAGENO="0046"
RECIPIENT
URBAN
CONDITIONS
INDEX
1975
PERCENT
POPULATION
CHANGE
PERCENT
POVERTY
PERCENT
PRE-1911O
HOUSING
GRANT UNDER
ORIGINAL
FORMULA
GRANT UNDER
NEW
FORMULA
(1)
POPULATION
(2)
1960-75
(3)
1970
(11)
1970
(5)
($ 000)
(6)
($ 000)
(7)
KANKAKEE CC
136
27,961
1.1
10.2
58.7
513
791
PEORIA SMSA
PEORIA CC
116
125,983
22.1
11.1
514.3
*
2,117
2,1116
ROCKFORD SMSA
ROCKFOIID CC
814
1115,1159
111.8
9.3
111.3
2,227
2,2814
ST LOUIS SMSA
EAST ST LOUIS SC
MADISON UC
ST CLAIR UC
609
714
59
57,929
2149,685
223,017
-29.1
11.1
23.1
33.6
8.7
9.14
511.9
140.3
32.5
2,733
14,179
3,793
3,9149
11,179
3,793
SPRINGFIELD SMSA
SPRINGFIELD CC
136
87,1418
5.0
10.5
57.8
1,527
2,226
INDIANA .
.
ANDERSON SMSA
ANDERSON CC
75
69,1186
41.6
9.7
116.6
1,136
.1,1711
BLOOMINGTON SMSA
BLOOMINGTON CC
514
.
148,955
56.1
10.0
35.6
883
883
EVANSVILLE SMSA
EVANSVILLE CC
152
133,566
-5.6
11.9
51.3
FORT WAYNE SMSA
FORT WAYNE CC
90
185,299
11L5
9.1
148.1
S
2,553
2,712
11,0311
2,895
GARY-HAMMOND-EAST
EAST CHICAGO CC
GARY CC
HAMMOND CC
CHICAGO
SMSA
289
162
77
1114,186
168,5146
1014,892
.
-23.11
-5.5
-6.1
.
13.14
114.9
6.5
70.7
143.7
147.0
1,0711
4,223
1,613
2,259
14,7214
2,701
INDIANAPOLIS SMSA
INDIANAPOLIS CC
59 7114,878 50.1 9.5 39.7
12,033
PAGENO="0047"
.
URBAN
PERCENT
POPULATION
PERCENT
PERCENT
PRE-19140
GRANT UNDER
ORIGINAL
GRANT UNDER
NEW
CONDITIONS
1975
CHANGE
POVERTY
HOUSING
FORMULA
FORMULA
($ 000)
RECIPIENT INDEX
(1)
POPULATION
(2)
1960-75
(3)
1970
(14)
1970
(5)
($
(6)
(7)
LAFAYETTE-WEST LAFAYETTE SMSA
LAFAYETTE CC 80 148,8914 15.5 7.6 51.14 637 755
WEST LAFAYETTE CC 66 20,297 60.1 13.0 314.6 3014 3014
MUNCIE SMSA
MUNCIE CC 1118 78,329 111.2 13.5 53.5 1,14119 1,11119
SOUTH BEND SMSA
SOUTH BEND CC 131 117,1178 -11.3 9.2 511.0 1,877 11,011
TERRE HAUTE SMSA
TERRE HAUTE CC 2118 63,998 -11.7 13.2 70.8 1,278 2,688
IOWA
CEDAR RAPIDS SMSA
CEDAR RAPIDS CC 70 108,9913 18.14 7.6 146.2 1,505 1,6614
DAVENPORT-ROCK ISLAND-MOLI~1E SMSP
DAVENPORT CC 106 99,9111 12.3 9.14 514.1 1,576 1,71414
DES MOINES SMSA
DES MOINES CC 137 1914,168 -7.1 10.0 544.14 3,137 6,085
DUBUQUE SMSA
DUBUQUE CC 1114 61,7514 9.1 8.6 61.8 1,006 1,162
OMAHA SMSA -
COUNCIL BLUFFS SC 137 58,660 5.14 11.3 514.3 1,117 1,312
SIOUX CITY SMSA
SIOUX CITY CC 172 85,719 -3.9 10.5 67.0 1,1405 2,6149
WATERLOO-CEDAR FALLS SMSA
CEDAR FALLS CC 146 11146 14146
WATERLOO CC 1114 1,302 1,14149
33,1814 56.6 8.14 36.2
77,681 8.3 10.6 149.7
PAGENO="0048"
URBAN
PERCENT
POPULATION
PERCENT
GRANT UNDER
GRANT UNDER
CONDITIONS
1975
PERCENT
PRE-1914O
ORIGINAL
NEW
RECIPIENT INDEX
(1)
POPULATION
(2)
CHANGE
1960-75
(3)
POVERTY
1970
(14)
NOOSING
1970
(5)
FORMULA
($ 000)
(6)
FORMULA
(5 000)
(7)
KANSAS
KANSAS CITY SMSA
KANSAS CITY SC
OVERLAND PARK SC
111
3*
168,153
81,013
37.9
.. .
13.8
2.14
147.14
11.5
3,1489
598
3,1189
593
TOPEKA SMSA
TOPEKA CC
97
119,203
-.2
9.9
41.5
1,897
2,735
WICHITA SMSA
WICHITA CC
73
2614,901
14.0
11.1
29.0
14,590
14,731
KENTUCKY
CLARKSVILLE-HOPKIN5VILLE
HOPKINSVILLE CC
SMSA
163
26,288
35.1
214.1
38.9
678
678
HUNTINGTON-ASHLAND SMSA
ASHLAND CC
209
27,1456
-12.2
114.3
5'I.8
561i
1,063
LEXINGTON-FAYETTE SMSA
LEXINGTON CC
39
186,0148
196.2
16.1
31.2
3,306
3,306
LOUISVILLE SMSA
LOUISVILLE CC
JEFFERSON UC
2146
9
335,9514
333,310
-144.0
63.8
17.0
6.1
53.2
9.5
8,4415
14,215
13,673
14,215
OWENSBORO SMSA
OWENSBORO CC
93
50,788
19.6
13.7
311.6
1,0114
1,O1~4
LOUISIANA
V
ALEXANDRIA SMSA
ALEXANDRIA CC
180
449,1481
22.8
29.7
32.0
1,697
1,697
BATON ROUGE SMSA
BATON ROUGE CC
56
*
2911,3914
92.5
18.6
20.7
6,537
6,537
LAFAYETTE SMSA
LAFAYETTE CC
514
75,1430
86.7
PAGENO="0049"
LAKE CHARLES SMSA
LAKE CHARLES CC
MONROE SMSA
MONROE CC
NEW ORLEANS SMSA
NEW ORLEANS CC
JEFFERSON PARISH UC
SHREVEPORT SMSA
SHREVEPORT CC
MAINE
LEWISTON-AUBURN SMSA
AUBURN CC
LEWISTON CC
PORTLAND SMSA
PORTLAND CC
MARYLAND
BALTIMORE SMSA
BALTIMORE CC
ANNE ARUNDEL UC
WASHINGTON SMSA
MONTGOMERY UC
PRINCE GEORGES UC
MASSACHUSETTS
BOSTON SMSA
BOSTON CC
ARLINGTON SC
BROOKLINE SC
CAMBRIDGE SC
FRAMINGHAM SC
,
RECIPIENT
URBAN
CONDITIONS
INDEX
(1)
1975
POPULATION
(2)
PERCENT
POPULATION
CHANGE
1960-75
(3)
PERCENT
POVERTY
1970
(Ii)
PERCENT
PRE-19110
HOUSING
1970
(5)
GRANT UNDER
ORIGINAL
FORMULA
($ 000)
(6)
GRANT UNDER
NEW
FORMULA
($ 000)
(7)
89
76,087
20.0
21.7
21.0
2,090
2,090
159
61,016
16.8
30.0
26.11
1,9143
1,9143
3110
12
559,770
399,016
-10.8
91.7
26.2
10.3
119.11
9.5
19,1183
6,398
22,9144
6,398
139
185,711
13.0
21.9
.30.6
14,939
14,939
199
23,3014
10.9
714.1
409
803
195
141,0145
.6
12.3
68.1
7143
1,220
317
59,857
-17.5
111.7
76.1
1,237
3,001
279
18
851,698
311,592
-9.3
66.5
18.0
6.1
60.0
19.9
20,952
3,670
32,338
3,670
1
7
518,691
551,232
67.7
89.7
4.1
5.7
1.2
*8.7
6,4431
6,7140
6,1431
6,7~40
303
29
636725
149,815
-8.7
-.3
15.3
514
77.2
22.5
13,369
568
25,831
1,258
130
52,590
-2.7
8.8
61.5
735
1,823
251
12
1O2,~420
65,5110
147.2
12.8
50
79.7
144.5
1,8111
673
3,820
673
PAGENO="0050"
PERCENT
PERCENT
GRANT UNDER
GRANT UNDER
URBAN
POPULATION
PERCENT
PRE-1914O
ORIGINAL
NEW
CONDITIONS
1975
CHANGE
POVERTY
HOUSING
FORMULA
FORMULA
RECIPIENT INDEX
POPULATION
.
1960-75
1970
1970
U 000)
($ 000)
(1)
(2)
(3)
(14)
(5)
(6)
(7)
LYNN SC 238 79,327 -16.0 10.7 79.8 1,1426 3,8146
MALDEN SC 1149 55,778 -3.3 8.0 76.6 765. 1,739
MEDFORD SC 1214 60,769 -6.5 6.1 80.9 726 2,035
NEWTON SC . 78 88,559 -14.1 14.7 67.5 853 2,1101
QUINCY SC 109 91,14914 14.7 6.8 71.2 1,157 2,153
SOMERVILLE SC 235 80,798 -114.7 9.5 90.1 1,379 3,778
WALTHAM SC 85 56,251 1.5 6.6 55.6 775 1,278
WEYMOUTH SC 12 56,815 17.9 5.5 11.0 678 678
BROCETON SMSA
BROCKTON CC 69 95,878 31.7 8.5 145.14 1,360 1,635
FALL RIVER SMSA
FALL RIVER CC 262 100,1130 .5 13.5 83.14 1,887 3,3145
FITCHBURG-LEOMINSTER SMSA
FITCHBURG CC 188 38,976 -9.14 9.8 714.1 666 1,519
LEOMINSTER CC 79 35,1493 27.1 7.1 59.9 1179 558
LAWRENCE SMSA
HAVERUILL CC 179 1414,377 -~4.2 9.1 80.11 676 1,567
LAWRENCE CC 225 67,390 -5.0 11.14 80.0 1,1146 2,1487
LOWELL SMSA
LOWELL CC 196 91,1493 -.7 11.2 714.2 1,605 2,860
NEW BEDFORD SMSA
NEW BEDFORD CC 292 100,133 -2.3 15.1 80.8 1,995 3,699
PITTSFIELD SMSA
PITTSFIELD CC 122 514,893 -5.1 7.14 66.7 723 1,676
SPRINGFIELD-CHICOPEE-HOLyOKE SMSA
CHICOPEE CC 81 57,771 -6.1 6.9 146.8 917 1,5147
HOLYOKE CC 283 146,1135 -11.9 114.5 73.11 987 2,091
SPRINGFIELD CC 191 170,790 -2.1 12.14 614.14 2,9211 14,992
WORCESTER SMSA
WORCESTER CC 188
171,566 -8.1 9.9 . 71414
2,678 6,117
PAGENO="0051"
URBAN
PERCENT
POPULATION
PERCENT
PERCENT
PRE-19140
GRANT UNDER
ORIGINAL
GR14NT UNDER
NEW
CONDITIONS
1975
CHANGE
POVERTY
HOUSING
FORMULA
FORMULA
RECIPIENT INDEX
POPULATION
1960-75
1970
1970
(5 000)
($ 000)
(1)
(2)
(3)
(11)
(5)
(6)
(7)
MICHIGAN
145
258 143,338
203 17,215
ANN ARBO.R SMSA
ANN ARBOR CC
BATTLE CREEK SMSA
BATTLE CREEK CC
BAY CITY SMSA
BAY CITY CC
DETROIT SMSA
DETROIT CC
CLINTON TWP SC
DEARBORN SC
DEARBORN HEIGHTS SC
FARMINGTON HILLS SC
LINCOLN PARK SC
LIVONIA SC
PONTIAC SC
REDFORD TWP SC
ROSEVILLE SC
ROYAL OAK SC
SOUTHFIELD SC
ST CLAIR SHORES SC
STERLING HEIGHTS SC
TAYLOR SC
WARREN SC
WATERFORD TWP SC
WESTLAND SC
OAKLAND UC
WAYNE UC
FLINT SMSA
FLINT CC
GENESEE UC
266
1,335,085
-20.1
2
58
6*
60,697
98,986
79,239
136.3
-11.6
*..
7
26
511,1211
119,5111
*
686.6
-8.2
2
1111,881
72.2
153
6
76,027
67,298
-7.5
-5.6
12
58,1111
15.8
21
79,191
-1.8
2
75,978
1111.2
7
3*
11'
11
85,9311
86,932
76,626
172,755
12.1
...
..
93.6
17
5*
16
59,888
92,689
1150,6711
27.1
...
23.14
39
3'42,822
-12.8
103,5142 53.8
10.5
28.1
1,5141
1,5141
-1.9
15.7
68.9
778
1,368
-11.9
10.5
72.7
7914
1,850
*
29,7011
632
1,181
935
~492
705
1,082
1,7014
797
861
8614
606
1,0148
687
1,010
2,023
720
1, 119
5,0114
14,936
614,509
632
2,792
935
`492
979
1,082
2,3119
929
861
1,259
606
1,0148
687
1,010
2,023
720
1 , 119
5,0114
14,936
-11.5
12.1
145.6
3,5146
5,870
56.3
5.1
23.8
3,0214
3,0214
114.7
10.2
5.5
3.3
17.0
5.3
2.1
12.8
2.9
11.9
3.8
3.2
3.2
2.8
11.9
3.2
14.7
3.6
14.1
`114
61.8
1.9
39.5
7.1
12.~4
19.0
6.5
117.2
7.7
11.7
22.9
5.6
9.7
3.9
9.1
8.9
19.1
5.3
19.9
32.8
1116 1714,218
19 252,631
PAGENO="0052"
URBAN
PERCENT
POPULATION
PERCENT
PERCENT
PRE-19140
GRANT UNDER
ORIGINAL
GRANT UNDER
NEW
CONDITIONS
1975
CHANGE
POVERTY
HOUSING
FORMULA
RECIPIENT INDEX
POPULATION
1960-75
1970
1970
($ 000)
FORMULA
($ 000)
(1)
(2)
(3)
(14)
(5)
(6)
(7)
GRAND RAPIDS CC 166
WYOMING SC 30
187,9146
57,918
6.0
26.11
12.1
5.9
62.0
26.7
3,220
(60
`4,805
760
JACKSON SMSA
JACKSON CC 273
143,9914
-13.3
12.5
80.8
787
1,918
KALAMAZOO-PORTAGE SMSA
KALAMAZOO CC 180
PORTAGE CC 10~
79,5142
38,6141
-3.1
. . .
12.9
3.14
57.7
11.5
1,1426
360
2,366
360
LANSING-EAST LANSING SMSA
EAST LANSING CC 29
LANSING CC 92
50,1425
126,805
67.0
17.6
10.7
9.9
18.8
146.5
701
2,055
701
2,127
MUSKEGON-NORTON SHORES-MUSKEGON HEIGHTS
MUSKEGON CC 2014
MUSKEGON HEIGHTS CC 3314
NORTON SHORES CC 19*
SMSA
1414,176
15,7145
21,2914
-5.0
-19.5
. . .
12.3
19.2
5.0
67.2
59.8
15.14
809
14141
276
1,14814
7145
276
SAGINAW SMSA
SAGINAW CC 2314
86,202
-12.3
13.7
614.1
1,802
3,3314
MINNESOTA
DULUTH-SUPERIOR SMSA
DULUTH CC 221
93,971
-12.1
11.14
72.6
1,608
3,830
FARGO-MOORHEAD SMSA
MOORHEAD CC 50
22,755
-.8
9.6
21.9
1452
`452
MINNEAPOLIS-ST PAUL SMSA
MINNEAPOLIS CC 2314
ST PAUL CC 151
BLOOMINGTON SC 2
HEN11EPIN UC 7
378,112
279,535
79,210
363,053
-21.7
-10.8
56.9
1,8.1
11.5
9.2
2.~7
3.4
68.1
62.14
3.8
12.6
6,8149
14,567
8114
3,554
19,859
10,290
8114
3,5514
ROCHESTER SMSA
ROCHESTER CC 50
56,211
38.2
7.9
37.3
731
731
PAGENO="0053"
URBAN
PERCENT
POPULATION
CHANGE
PERCENT
POVERTY
PERCENT
PRE-1914O
HOUSING
GRANT UNDER
ORIGINAL
FORMULA
GRANT UNDER
NEW
FORMULA
CONDITIONS
1975
1960-75
1970
1970
($ 000)
($ 000)
RECIPIENT INDEX
POPULATION
(~4)
(5)
(6)
(7)
(1)
(2)
ST CLOUD SMSA
ST CLOUD CC
914
140,621
20.1
9.9
.
148.14
699
699
MISSISSIPPI
BILOXI-GULFPORT SMSA
BILOXI CC
GULFPORT CC
MOSS POINT CC
PASCAGOULA CC
91
68
18
27
46,1407
143,126
18,298
30,1403
5.3
142.8
175.9
77.2
15.7
17.8
17.2
12.9
26.0
23.0
12.0
15.3
1,022
963
506
557
1,022
963
506
557
JACKSON SMSA
JACKSON CC
MISSOURI
109
166,512
15.3
23.7
22.5
14,635
11,635
~
COLUMBIA SMSA
COLUMBIA CC
1414
63,227
72.5
12.6
25.2
1,015
1,015
KANSAS CITY SMSA
KANSAS CITY CC
INDEPENDENCE SC
151
23
1472,529
111,1481
-.6
78.9
12.5
6.1
51.3
28.14
9,063
1,3141
13,582
1,3141
ST JOSEPH SMSA
ST JOSEPH CC
235
77,679
-2.5
13.7
71.14
1,1199
2,550
ST LOUIS SMSA
ST LOUIS CC
FLORISSANT SC
ST LOUIS UC
1487
1
17
5214,9614
70,1465
766,1147
30.0
814.6
33.8
1°.7
3.0
4*14
7~4.9
2.2
22.0
.
16,761
780
9,100
36,380
780
9,100
SPRINGFIELD SMSA
SPRINGFIELD CC
96
131,557
37.2
114.0
140.2
.
2,299
2,299
BILLINGS SMSA
BILLINGS CC
70 68,987 30.5 11.6 33.7
1,069 1,069
PAGENO="0054"
PERCENT
PERCENT
GRANT UNDER
GRANT UNDER
URBAN
POPULATION
PERCENT
PRE-1940
ORIGINAL
NEW
CONDITIONS
1975
CHANGE
POVERTY
HOUSING
FORMULA
FORMULA
RECIPIENT
INDEX
(1)
POPULATION
(2)
1960-75
(3)
1970
(4)
1070
(5)
($ 000)
(6)
($ 000)
(7)
GREAT FALLS SMSA
.
GREAT FALLS CC
89
60,868
10.2
10.4
40.0
1,027
1,027
NEBRASKA
LINCOLN SMSA
LINCOLN CC
72
163,112
26.9
8.8
44.2
2,085
2,265
OMAHA SMSA
OMAHA CC
91
371,455
23.2
10.4
46.1
5,914
5,914
NEVADA
LAS VEGAS SMSA
LAS VEGAS CC
4
146,030
126.7
9.3
3.8
2,154
2,154
REND SMSA
REND CC
33
78,097
51.7
8.9
23.7
1,095
1,095
NEW HAMPSHIRE
MANCHESTER-NASHUA
SMSA
MANCHESTER CC
NASHUA CC
169
48
83,417
61,002
-5.5
56.0
10.1
6.4
67.6
49.1
1,400
752
2,774
807
NEW JERSEY
ATLANTIC CITY SMSA
ATLANTIC CITY CC
460
43,969
-26.2
22.0
66.0
1,232
2,882
JERSEY CITY SMSA
.
JERSEY CITY CC
BAYONNE SC
UNION CITY SC
HUDSON UC
282
155
70
117
243,756
73,574
52,648
156,779
-11.7
-.9
.9
-.3
13.5
9.0
3.7
6.6
78.9
73.0
81.3
75.5
5,530
1,131
1,254
2,439
10,645
2,196
1,929
4,325
LONG BRANCH-ASBURY
PARK
SMSA
.
ASBURY PARK CC
LONG BRANCH CC
407
131
13,841
31,007
-20.3
18.0
23.1
13.1
60.0
50.3
456
610
805
617
PAGENO="0055"
11)
0
0
0 00
0001-
0
~
0000
000
~0.
51
o~r~ r~-ooc'~o ooc'~'- oo~o ~CoU~ C-tt\
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(fl C~J cC.- - (`4 Cci ~ `- (`40 (`4 0 Cci ~
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Cc0 ~(cjcC~CcJ~ 0~OC(CcO'I0CC (`JOD(CcN cONO
~ N Cci Cci'- (Cc~ Cci CC'-O (\J~ Cci (CICcJ ~ (`c 0 i\JLCc
I ~ ~ Cci ~ I IC' I I'- (14 1(1 `- Cci
0(11 0fCcC'0~f1O'- 0cCcCfCc('4~O NOcOCCI ~ 1(1cC
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aD~ NL11CCcI0~ LCcfCc CcC'JfCccO 0'-~ C'4~ OcC'cCN C'co N ~ff(
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11)
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11) 0
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0
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Cl) 00 C/) *
11)0 * I `C 11. 0
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00 0*OCC)Q. CC) 00 0000 `C -)0 `COO
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0= *0Z.i1-.I-'OO Cl)OCO'CO *000 0 ~ Cl)I-' 0 0
00 V)O'CCci CC)COc/) 0 0~I-.0 0 1000 Q~ 0 (1)00
COO 0 00(11CC) (1)0 1.. 00 1-' Cl) 00(000 -~ 0>' 0 00
~) 0 00COO `CO ..i ~110 0100(00 00 `C 0(0 000 01-' ~)
00 111 1-.0000 0'C01-C-cCl)OC00 cl)C..Cl)00 OOCCC.J COCci
00 C0*=OCciI-cioO 111*00000Cl)o1o CciI-cicl)1-C11' `C000 1-COO
(-40 COtO'CO.~)0C0 `C(0'C*C'COCl)O CO.~C'C'CCO O
00 *ZQ.Cl)0000 0000011.0000 1-011.11.0 o000 0I-
(0 (0 `C = =
= 0 11. 11. 1'
0
00' 0
1.).->' 0'-'
0 I Cl) NLC1
CC)O 0"-'
1000'-
ci. ci.
ZI-.
£000
010 N cC
COO
00(01(1
01-CO N
01-0 I
0 ~) = cC
£0000'
0
0
01-'
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Cl)
000
`C C-C CO~
000'-
CciZ
00(0
0
0
0
CO
0
CO
PAGENO="0056"
VINELAND-MILVILLE-BRIDGETON SMSA
BRIDGETON CC 226
MILLVILLE CC 97
VINELAND CC 65
NEW MEXICO
ALBUQUERQUE SMSA
ALBUQUERQUE CC
NEW YORK
ALBANY-SCHENECTADY-TROY SMSA
ALBANY CC
SCHENECTADY CC
TROY CC
BINGHAMTON SMSA
BINGHAMTON CC
BUFFALO SMSA
BUFFALO CC
NIAGARA FALLS SC
WEST SENECA TOWN SC
ERIE UC
ELMIRA SMSA
ELMIRA CC
NASSAU-SUFFOLK SMSA
NASSAU UC
SUFFOLK UC
NEW YORK CITY SMSA
NEW YORK CITY CC
MT VERNON SC
NEW ROCHELLE SC
YONKERS SC
ROCKLAIID UC
WESTCHESTER UC
272 11O~311
207 711,995
287 60,312
2814 60,666
388 1107,160
199 80,773
13 514,1511
30 591,793
-23.6 114.8 85.7
-21.1 10.9 61.5
61.0 3.7 214.5
26.0 5.0 32.2
URBAN
PERCENT
*
PERCENT
GRANT UNDER
GRANT UNDER
POPULATION
PERCENT
PRE-1911O
ORIGINAL
NEW
RECIPIENT INDEX
1975
CHANGE
POVERTY
HOUSING
FORMULA
FORMULA
(1)
POPULATION
(2)
1960-75
(3)
1970
(14)
1970
(5)
($ 000)
(6)
($ 000)
(7)
30 279,~401
-1.8
114.1
67.1
1400
633
25,119
53,637
31.5
112.3
10.11
9.8
52.0
140.3
3143
791
382
791
38.9
13.9
12.6
14,978
14,978
-15.0
-8.2
-10.6
13.2
10.0
13.5
714.7
81.3
81.0
1,990
1,097
1,107
5,081
3,052
2,538
Oi
399
23
114
222
1714
105
86
16
58
37,320
1114,021
931,535
7,1481,613
67,687
71,8141
192,509
193,7314
2314,309
15.6 87.6
3.8 27.0
6.0 18.7
-19.8
7.9
88.0
-3.9
-10.9
-6.5
1.0
83.6
17.6
8, 1432
1,1406
5147
6, 1414 1
757
1,566
9,878
1714,170
1,233
1,0145
2,816
1,997
2,619
214,293
3,657
5447
6 , 14241
1,999
2,161
9,878
255,919
2,630
2,086
11, 5214
1,997
3,869
114.7
9.3
7.5
7.2
4*1~
6.1
62.1
71.1
56.0
51.14
27.8
147.8
PAGENO="0057"
URBAN
PERCENT
POPULATION
PERCENT
PERCENT
GRANT UNDER
GRANT UNDER
CONDITIONS
1975
PRE-1940
ORIGINAL
NEW
RECIPIENT INDEX
(1)
POPULATION
(2)
CHANGE
1960-75
(3)
POVERTY
1970
(4)
ROUSING
1970
(5)
FORMULA
($ 000)
(6)
FORMULA
($ 000)
(7)
POUGHKEEPSIE SMSA
POUGHKEEPSIE CC
287
31,608
-17.5
12.8
79.0
558
1,531
ROCHESTER SMSA
ROCHESTER CC
GREECE TOWN SC
IRONDEQUOIT TOWN
MONROE UC
SC
266
8
20
23
267,173
76,1401
60,1614
271,6714
-16.1
57.0
8.7
86.2
12.0
2.8
2.7
6.9
`
79.5
19.0
32.9
25.5
14,935
629
1487
2,282
12,8143
629
667
2,282
SYRACUSE SMSA
SYRACUSE CC
ONONDAGA UC
265
27
182,5113
289,380
-15.5
40.2
.
13.5
5.2
70.8
30.2
3,1114
3,126
8,314
3,126
UTICA-ROME SMSA
ROME CC
UTICA CC
110
297
.49,014
82,443
-5.1
-17.9
8.2
13.2
54.3
79.0
701
1,547
1,272
4,148
NORTH CAROLINA
ASHEVILLE SMSA
ASHEVILLE CC
177
59,591
-1.0
18.0
51.0
1,339
1,743
BURLINGTON SMSA
BURLINGTON CC
60
37,586
13.2
9.6
30.1
616
616
CHARLOTTE-GASTONIA
CHARLOTTE CC
GASTONIA CC
SMSA
48
79
281,417
49,343
39.6
32.4
14.8
13.6
19.3
32.5
5,235
997
5,235
997
FAYETTEVILLE SMSA
FAYETTEVILLE CC
.
118
.
65,915
39.9
19.4
18.9
1,613
1,613
GREENSBORO-WINSTON
GREENSBORO CC
HIGH POINT CC
WINSTON-SALEM CC
SALEM-HIGH
POINT
75
114
107
SMSA
155,848
61,330
141,018
*
30.3
-1.2
26.9
23.6
11.7
13.6
20.7
33.1
28.5
2,551
1,288
2,551
1,364
PAGENO="0058"
URBAN
PERCENT
POPULATION
.
PENCENT
PERCENT
PRE-1914O
GRANT UNDER
ORIGINAL
GRANT UNDER
NEW
CONDITIONS
1975
CHANGE
POVERTY
HOUSING
FORMULA
FORMULA
RECIPIENT INDEX
POPULATION
1960-75
1970
1970
($ 000)
($ 000)
(1)
(2)
(3)
(11)
(5)
(6)
(7)
RALEIGH-DURHAM SMSA
DURHAM CC
RALEIGH CC
WILMINGTON SMSA
WILMINGTON CC
NORTH DAKOTA
FARGO-MOORHEAD SMSA
FARGO CC
OHIO
AKRON SMSA
AKRON CC
SUMMIT UC
CANTON SMSA
CANTON CC
STARK UC
CINCINNATI SMSA
CINCINNATI CC
HAMILTON UC
CLEVELAND SMSA
CLEVELAND CC
CLEVELAND HEIGHTS SC
EUCLID SC
LAKEWOOD SC
PARMA SC
CUYAHOGA UC
COLUMBUS SMSA
COLUMBUS CC
FRANKLIN UC
DAYTON SMSA
DAYTON CC
91
52
101,2211
1311,231
29.3
42.9
17.3
12.8
33.6
211.8
2,356
2,251
2,356
2,251
191
53,818
22.3
25.2
39.5
1,360
1,360
81
56,058
20.1
8.6
790
826
179
27
251,7147
2111,969
-13.3
26.9
11.6
5.2
57.d
27.11
11,1153
2,7119
9,6146
11,058
211
311
101,852
219,009
-1O.~l
20.9
12.2
11.6
66.2
37.6
1,873
2,558
3,953
2,558
289
22
1112,5614
1118,196
-17.9
314.9
17.1
14.5
59.3
28.2
10,536
11,860
19,577
14,860
1400
638,793
-27.1
17.0
73.3
16,020
39,1490
913
17
82
10
114
51,1111
63,307
65,395
98,883
1112,199
-17.3
.5
-1.1
19.14
35.6
5.5
11.1
5.14
3.6
3.6
72.7
17.3
614.1
13.2
21.6
533
685
701
968
3,8117
2,273
879
2,132
968
3,8147
106
535,610
13.6
13.2
39.0
9,8314
9,8314
15
321,797
52.14
5.0
18.8
3,239
3,239
213
205,986
-21.5
13.7
52.1
14,595
9,7814
PAGENO="0059"
.
RECIPIENT
URBAN
CONDITIONS
INDEX
(1)
1975
POPULATION
(2)
PERCENT
POPULATION
CHANGE
1960-75
(3)
PERCENT
POVERTY
1970
(14)
PERCENT
PRE-1914O
HOUSING
1970
(5)
GRANT UNDER
ORIGINAL
FORMULA
($ 000)
(6)
GRANT UNDER
NEW
FORMULA
($ 000)
(7)
KETTERING SC
MONTGOMERY UC
5
1~4
69,9149
310,179
28.14
48.2
3.1
14*14
7.1
19.0
611
3,218
611
3,218
HAMILTON-MIDDLETOWN
HAMILTON CC
MIDDLETOWN CC
SMSA
1514
100
66,1469
148,0014
-8.1
114.0
11.1
10.8
514.2
1414.9
1,222
825
2,085
825
LIMA SMSA
LIMA CC
LORAIN-ELYRIA SMSA
ELYRIA CC
LORAIN CC
205
58
81
51,372
52,14714
814,907
.7
19.9
23.2
12.0
7.1
10.0
73.14
141.2
142.3
9614
7314
1,376
1,1493
7314
1,376
MANSFIELD SMSA
MANSFIELD CC
117
56,916
20.3
11.14
52.8
9149
1,0140
PARKERSBURG-MARIETTA
MARIETTA CC
SMSA
2514
16,1714
-1LO
114.2
-
73.3
296
576
SPRINGFIELD SMSA
SPRINGFIELD CC
196
77,317
-6.5
12.5
62.6
1,14143
2,628
STEUBENVILLE-WEIRTON
STEUBENVILLE CC
SMSA
2146
28,280
-13.0
114.8
61.8
579
1,1614
TOLEDO SMSA
TOLEDO CC
123
367,650
15.6
107
56.8
6,028
.
7,280
YOUNGSTOWN-WARREN SMSA
WARREN CC
YOUNGSTOWN CC
105
275
60,1486
132,203
1.14
-20.7
9.6
13.8
147.1
67.14
9714
2,612
1,363
6,2814
OKLAHOMA
LAWTON SMSA
LAWTON CC
51 76,1421 23.9 17.14 15.14
1,679 1,679
PAGENO="0060"
URBAN
PERCENT
POPULATION
PERCENT
PERCENT
PRE-19140
GRANT UNDER
ORIGINAL
GRANT UNDER
NEW
FORMULA
CONDITIONS
1975
CHANGE
POVERTY
HOUSING
FORMULA
(5 000)
RECIPIENT INDEX
POPULATION
1960-75
1970
1970
(5
(7)
(1)
(2)
(3)
(Ii)
(5)
(6)
OKLAHOMA CITY SMSA
OKLAHOMA CITY CC
MIDWEST CITY SC
NORMAN SC
814
6
37
365,916
50,105
59,9148
12.8
39.0
79.14
13.9
9.2
13.1
29.1
3.7
21.3
7,110
779
909
7,110
779
909
TULSA SMSA
TULSA CC
.
57
331,726
26.8
11.9
25.9
5,5145
5,5145
OREGON
EUGENE-SPRINGFIELD SMSA
EUGENE CC
SPRINGFIELD CC
36
19
92,1451
33,1432
*
81.14
70.44
12.14
9.8
22.3
13.5
1,3143
465
1,3143
465
PORTLAND SMSA
PORTLAND CC
176
356,732
~I4.3
12.6
57.2
6,173
12,016
SALEM SMSA
SALEM CC
544
78,168
59.1
10.6
344.5
1,063
1,063
PENNSYLVANIA
ALLENTOWN-BETHLEHEM-EASTON
ALLENTOWN CC
BETHLEHEM CC
EASTON CC
SMSA
1146
11~4
329
106,6214
73,827
29,263
-1.6
-2.1
-8.14
9.2
8.6
15.3
66.5
55.5
814.2
1,1469
967
560
3,2114
1,877
1,2314
ALTOONA SMSA
ALTOONA CC
211
59,692
-144.0
9.2
814.0
1,088
2,765
ERIE SMSA
ERIE CC
186
127,895
-7.6
11.0
66.8
2,082
14,2814
HARRISBURG SMSA
HARRISBURG CC
1478
58,2714
-26.9
20.3
73.6
1,500
3,900
C;'
JOHNSTOWN SMSA
JOHNSTOWN CC
-25.8 114.9 814.7
829 2,14014
398 140,01414
PAGENO="0061"
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