By Dave Gatton and Carolyn Merryweather
January 31, 2005

At the opening plenary session of the U.S. Conference of Mayors 73rd Winter Meeting in Washington, January 18, mayors and key U.S. business interests outlined a common agenda to promote the economic growth of the nation's 318 metro economies.

The 2005 Metro Agenda includes passing TEA-21; creating jobs through a Brownfields tax credit; saving CDBG, HOME, Housing Vouchers, and reforming FHA; resisting efforts by the federal government to repeal the deductibility of state and local taxes; passing legislation allowing for the fair and equal collection of state and local sales taxes for internet purchases; ensuring that sufficient homeland security funding is sent to local jurisdictions, and reauthorizing the Terrorism Insurance laws.

The agenda is an outgrowth of the U.S. Conference of Mayors Second Annual National Economic Summit in December, 2004, where mayors, non-profit groups, and private sector representatives developed a list of important policy issues key to the health of metro economies. The agenda was further refined by the Council for the New American City and its members, who sponsored the December Summit.

"In the past we have made a strong case and laid the groundwork for why metro economies are so important to our nation. With this agenda we show what issues will best enable our metro areas to grow in the future," said Conference President Akron Mayor Donald L. Plusquellic.

Also speaking about the agenda were John Courson, Chairman of the California Housing Finance Agency; Michael Petrie, Chairman of the Mortgage Bankers Association; Lamont Blackstone, Principal for DLC Urban Core representing the International Council of Shopping Centers; and David Lereah, Chief Economist for the National Association of Realtors.

During the Council meeting, Courson reiterated the importance of CDBG and Section 8, pointing out that both his agency and the nation's mayors are in the business of creating communities, and that CDBG and Section 8 support that goal. Petrie agreed, stating that mortgage lenders support both programs and believe they need to receive funding.

"Forty percent of a household's disposable income is spent on housing and housing-related goods and services. That's how important housing is for local metro areas," Lereah told the mayors.

Petrie also emphasized the importance of FHA reform, telling the mayors during the Plenary session that, "FHA has been around for 70 years and has served minority homebuyers at nearly twice the rate of the conventional market and has been fundamental in providing affordable rental units. Together, we need to explore tools to empower FHA to do more to help increase homeownership especially for minority and low income areas. To get this done, we need to pass the Zero Downpayment Act of 2004 which did not pass in the last session of Congress."

The agenda calls for the 109th Congress to pass TEA-21, and to also create a 21st Century Transportation System which would include a commitment to high speed rail, projects of national economic significance, and promotion of alternative transportation technologies. "We are fast becoming an economy based on logistics, and the cornerstone of logistics is transportation. If we fail to respond, we will jeopardize our future," said Detroit Mayor Kwame M. Kilpatrick, Chair of the Council for the New American City.

On the subject of brownfields, Petrie urged the mayors to support Representative Michael Turner's bill to create a brownfields tax credit. To illustrate why this is important for both mayors and the mortgage banking industry, he said, "current legislation does not cover Petroleum sites, which is a major issue for lenders and discourages private investment and financing of brownfield redevelopment projects."

A new issue in the 109th Congress is expected to be the repeal of deductibility of state and local taxes. "Local revenues are at the heart of how our communities function," Kilpatrick told the mayors, "and to impose a tax on a tax is not the way to build confidence in our revenue raising systems. Neither is increasing the cost of homeowership for every American family by taxing their property taxes."

Collecting taxes on internet purchases is also a key item on the agenda. "In 2003 retail sales on the internet increased at a nearly 40 percent jump over the previous year. State and local governments lost an estimated $15.5 billion in revenue because states currently cannot effectively collect sales and use taxes on e-commerce purchases. This revenue erosion is projected to continue at an alarming rate," Lamont Blackstone, Principal for DLC Urban Core, representing the International Council of Shopping Centers informed the mayors.

On the subject of terrorism insurance, Petrie said, "no matter where you are in America, chances are terror insurance is required on office buildings, shopping centers, and other buildings in your communities." He also told the mayors that 93 percent of all commercial real estate requires terrorism insurance.

"The issues on this agenda affect us all. Not just the public sector, but businesses and employees who are anxious to compete globally and who want to -grow- America," said Kilpatrick.