URGING SUPPORT FOR LOCAL FISCAL RELIEF AND ECONOMIC GROWTH
WHEREAS, local governments across the nation are facing the worst fiscal crisis they have
experienced in decades, brought on mostly by the 2001 recession; the 9/11/01 terrorists attacks
which caused a huge reduction in local revenues particularly from taxes related to the travel and
tourism industry; and drastic cuts in state aid to local governments; and
WHEREAS, local governments are suffering from significant budget shortfalls and are taking
drastic actions to close their budget gaps, including laying off police officers, firefighters, teachers
and other critical workers; cutting back on services and in some cases closing down libraries and
other public facilities; and delaying capital improvement projects; and
WHEREAS, a recent report released by the United States Conference of Mayors provides that
overall, job growth in the nation's metro areas will average a mere 0.7 percent annually between
2001 and 2004, down from a robust 1.7 percent growth rate between 1998 and 2001; and
WHEREAS, states are facing the worst fiscal crisis since World War II with budget deficits
estimated at almost $100 billion, nearly 10 percent of total state spending, and many are
significantly reducing aid to local governments; and
WHEREAS, in January 2003 Conference President and Boston Mayor Thomas M. Menino led
Conference efforts in developing policy on economic security, which called for general fiscal
assistance for local governments as well as urged support for the following:
- Tax Code Amendments
- The President's home ownership tax credit proposal;
- Raising the state volume cap for municipal bonds to spur more economic
development and jobs;
- Exempting water and waste water projects from the state volume caps;
- School construction tax credits bonds to meet the need for new and renovated
facilities;
- High speed rail tax credit bonds to improve transportation between regions;
- Brownfield redevelopment tax credits to turn blighted properties into tax
producing and job producing sites; and
- Expansion of the Earned Income Tax Credit to more working families.
- Job Creation Investments
- Acceleration of transportation funding to put more Americans to work as soon as possible;
- Increase federal investments in housing, again to create jobs and put a roof over
the head of more American families;
- Job training initiatives to help prepare unemployed Americans for new jobs of
the 21st century;
- General Fiscal Assistance for local governments.
- Fiscal Relief
- Medicaid relief for states;
- Full funding of the "No Child Left Behind" Act; and
WHEREAS, Senator Olympia J. Snowe worked timelessly in the Senate on behalf of state and
local governments, and as a result, the Senate voted 95 to 3 to approve $20 billion in temporary
assistance for state and local governments, with $10 billion earmarked for Medicaid and the
remaining $10 billion for general fiscal relief split $6 billion for states and $4 billion for local
governments; and
WHEREAS, a House and Senate conference panel decided to eliminate the $4 billion earmarked
for local governments during negotiations on the final compromise, and instead the total $20
billion was provided to states with no requirement to share these funds with local governments;
and
WHEREAS, instead of spending funds immediately to avoid layoffs and service cuts, some
governors are reluctant to spend these funds on ongoing programs and are planning to place some
of their funds in reserve for certain programs later on,
NOW, THEREFORE, BE IT RESOLVED that The United States Conference of Mayors does
hereby commend Senator Olympia J. Snowe and the other 94 Senators for voting to earmark a
portion of the fiscal relief funds for local governments and urges Congress to enact legislation that
provides at least $4 billion in general fiscal relief to local governments; and
BE IT FURTHER RESOLVED that The United States Conference of Mayors urges states to
use some of their fiscal relief money to fund local government programs and services; and
BE IT FURTHER RESOLVED that The United States Conference of Mayors urges Congress to
enact legislation to amend the tax code, and increase investments in programs as mentioned earlier
in this resolution to spur economic growth by creating jobs and helping to improve the local
infrastructure.
©2003 U.S. Conference of Mayors