By Larry Jones
June 19, 2006

Oklahoma City Mayor Mick Cornett, chairman of the Urban Economic Policy Committee, led mayors through a full agenda during the committee’s June 3 meeting in Las Vegas. The committee adopted ten resolutions and heard from three speakers on topics ranging from preparing for the 2010 census, to the impact of gas and energy prices on local budgets, to economic development and the space industry.

Eminent Domain: In explaining the need for a new resolution on eminent domain, Cornett told members of the committee that the House of Representatives, in response to the Supreme Court’s decision last year in City of New London v. Kelo, approved a bill last November that would prohibit local use of eminent domain for economic development. “We think this goes too far and we’ve been working to influence the Senate bill to retain some flexibility for local governments to do economic development,” he said. Cornett mentioned that he had discussed eminent domain with his Senator Tom Coburn (OK), who serves on the Senate Judiciary Committee, which has jurisdiction over the issue.

He told Senator Coburn his first preference would be for Congress not to take any action, and instead allow states to address the issue, since 43 states and many local governments have already taken action or are in the process of responding to the Kelo decision. However, he explained that if Congress decides to act, the resolution urges the adoption of legislative language that will allow local governments to continue to use eminent domain for certain economic development activities. A letter from The United States Conference of Mayors to the Senate Judiciary Committee was also circulated during the five-day conference and signed by 85 mayors urging that local governments maintain some flexibility to use eminent domain to assemble property for affordable housing, hospitals, educational institutions and for other purposes that serve the general public.

Telecom Tax Reform/Streamlined Sales Tax Project: Another key issue discussed was telecom tax reform. Cornett told members of the committee that a new resolution was needed to express opposition to provisions in proposed legislation that would require mandatory state collection and administration of local telecom taxes. He explained that the resolution is in response to proposals introduced last year by Senators Michael Enzi (WY) and Byron Dorgan (SD) that would add telecom taxes to the Streamlined Sales Tax Project. The effort started out with the aim of simplifying the collection of sales taxes on remote transactions but has been expanded to telecom taxes. Cornett pointed out that since telecom taxes are so different, the Conference and other local groups in Washington have opposed adding local telephone taxes, franchise fees, rights-of-way fees and other telecom fees to this proposal. To do so would play into the hands of representatives from the communications industry who are pushing for the elimination of all telecom specific taxes and only allowing state and local governments to apply their sales taxes to communications services.

To do so would play into the hands of representatives from the communications industry who are pushing for the elimination of all telecom specific taxes and only allowing state and local governments to apply their sales taxes to communications services.

The full text of all of the resolutions adopted by the Urban Economic Policy Committee during the meeting can be viewed in full by visiting the Conference of Mayors website at usmayors.org and clicking on adopted resolutions under the Urban Economic Policy Committee. In summary resolutions were approved:

Urging increasing the federal role in the assessment, development and financing of critical national infrastructure.

Urging revitalizing cities through eminent domain.

Urging opposition to mandatory state collection and administration of local telecommunication taxes in federal streamlined sales tax simplification proposals.

Urging support for IRS collection of past-due legally enforceable local government tax obligations.

Urging support for federal tax reform.

Urging support for the Federal Consent Decree Fairness Act.

Urging the elimination of IRS’s payroll tax burden on volunteer municipal board and commission members.

Urging support for the Go Direct Program to promote direct deposit of Social Security payments.

Urging support for the Mayors National Dollar Wi$e Campaign.

Expressing opposition to the disproportionate effect that the Sarbanes-Oxley Act has on small businesses.

A new resolution referred to the committee after the May 3 deadline to urge the U.S. Postal Service to designate a default city for zip code purposes was tabled due to lack of support.

Alfred Pfeiffer, division chief for local geographic partnerships at the Census Bureau, provided mayors an update on the Bureau’s preparations for the 2010 census. He urged mayors to take an active role in working with the Census Bureau to make sure an accurate address list is developed which will help ensure that everyone in their cities are counted. He also discussed the importance of the American Community Survey which will replace the census long form and provide mayors and other community leaders more timely information about their community in which they live.

Chesapeake (VA) Mayor Dalton Edge discussed the impact of gas and energy prices on local budgets. He said that rising energy prices have had a significant impact on his city’s budget which has caused city officials to make though decisions to accommodate the higher costs. He discussed a number of conservation and budget-tightening alternatives for mayors to consider.

Rory Cooper, director of intergovernmental relations for the National Aeronautics and Space Administration (NASA) provided mayors an overview of NASA’s involvement in economic development. He explained that NASA has contractual arrangements with companies that produce space-industry products and services in many cities across America. These contracts, he pointed out, generate a huge number of jobs and economic opportunities. He said the agency is interested in developing a closer relationship with mayors to keep them informed about the space industry’s economic development plans.