February 3, 2003

The following remarks were given by Conference President Boston Mayor Thomas M. Menino as he unveiled the Conference's economic security proposal on January 22.

America's mayors are working to build safe and strong cities. All around the country, our local leaders have invested billions of dollars in homeland security and economic security.

Yet, as the Metro Economies report released by the Conference tells us, the ongoing national recession is impairing our economic security and inaction by Washington threatens our homeland security.

Today, we are putting forward a strong and balanced plan that addresses both homeland security and economic security. It also addresses the growing problem of state governments in crisis, with the prospect of $65 to 80 billion in deficits, according to Business Week. If you look around the country to California, Michigan, Massachusetts and many other states, the governors are passing a growing share of this problem on to the local level. Many of you here today probably have your own story to tell.

The bad news about cuts in state aid is that they come at the same time as yet another round of corporate cutbacks. Last week, a major northeast bank announced that it was reducing its payroll by 1,900. K-Mart closed hundreds of stores across America, including one in a very successful mall in Boston. FAO Schwartz declared for bankruptcy. Economic hardships are just continuing to grow and grow.

Meanwhile, I can tell you that the leadership of the Conference has been working to find solutions:

• Solutions to our need for the homeland security dollars we were promised over a year ago;
• Solutions to the growing state government deficits and their spillover impact on local services, and;
• Solutions to the problems of our national recession and the need to jumpstart our economy back to prosperity.

Recently, I met with Governor Paul Patton of Kentucky, the head of the National Governors Association, to offer our support for federal aid to our distressed states, possibly through a change in the federal rate of Medicaid reimbursement to them. He appreciated our backing for this aid. We also had a discussion about the need that cities have for direct homeland security funding, and while we didn't resolve all our differences, he later told an interviewer that the cities needed some type of "direct" funding. So I think we made some progress. We also agreed to meet again with a group of mayors and governors, to seek common ground.

Last Thursday, the Conference of Mayors' officers met with several of our committee chairs and Past President Victor Ashe. We discussed the recent economic stimulus proposals put forward by the Administration, by the House Democrats, by the Democratic governors and by Democratic and Republican senators.

And we determined that none of them really fit the needs of America's cities. There are good items, here and there, but generally, they didn't really meet our needs.

So we are putting forward our own plan!

We support including direct homeland security funding to our cities in the economic stimulus package. As I said earlier, we have spent billions of our own money, now the funds we were promised have to be there. We are the First Responders. When that 911 call comes in for help, it doesn't go to the state house or the White House, it comes in to city hall and our local police, fire and EMTs. We-ve waited long enough for this money, it's time for action now!

We support federal aid to our struggling states, either through Medicaid relief or through general economic assistance that would be provided to states as well as cities that have suffered cutbacks from their state governments.

And let me say, it's time for a general reexamining of the federal'state-local partnership. States have had a great run, granting billions of dollars in tax cuts, taking in billions more in tobacco settlement money and acting as a pass through for programs that would have been more efficiently spent locally — from welfare reform to job training to homeland security. They take their percentage before the money ever gets to us. That must be what George Washington Plunkitt once called "honest graft"!

Finally, and perhaps most important, we have to put our people back to work. More and more American families are in trouble and breadwinners go months and months without full-time work. Many of these families have cut back on frills, maybe refinanced their mortgages as rates dropped, or accepted part-time work. For them, reducing taxes on stock dividends isn't the answer. A good job is.

So we are proposing a real stimulus program to Washington. We say speed up and increase spending on transportation and housing development. Give us more resources to put people to work cleaning up brownfields. Don't make tax exempt financing for job producing projects harder, make it easier by raising the bond "cap", or eliminating it for a year or two.

And I have one other idea, which didn't make it into our package, which we endorsed over a year ago. I want to give a tax credit to every family buying their first computer. I believe that it would accomplish two goals — bridging the digital divide and stimulating high tech production, which is urgently needed right now.

During this meeting, we will be hearing a number of different perspectives on the economy and how to get it moving again. We should be open to good ideas, we should reach out and build coalitions, but we should all continue to push our common priorities.

Because if we don't, no one else will.