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is that without the revenue sharing funds we would either
have to increase other taxes or do without a new fire
truck or garbage truck, and that we make the decisions in
the course of our overal deliberations in the appropriation
and budget cycles.

With best regards.

Sincerely,

Brut a blueretur

Bruce D. Claus onthue
Village President

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I have received your December 11, 1979 letter concering Federal revenue sharing funds and requesting comments on the program. It was our understanding that the revenue sharing program was to be a continuing program to support needs at the local level without undue Federal restrictions. It should be kept that way. Our residents and taxpayers realize that what River Forest receives in revenue sharing funds is less than a pro-rata share of the Federal taxes paid from River Forest into the revenue sharing pot , but they look on the funds as at least a partial return. To cut them out complete ly by retargeting the program would be un acceptable. River Forest has used revenue sharing funds as it has used funds from any other general fund source--where the need is greatest at the particular time. To remove this source would have the same adverse effect as chopping off another source of revenue, with the resulting reduction in personnel, services or equipment. We support your efforts to retain and maintain the revenue sharing program in its present form.

Best regards.

Sincerely,

musen

Emerson K. Houser
Village Clerk

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Dear Mr Hyde: | Your letter of_11 Dec.1979 was gratefully received by

my person and I would like to extend my sincere appreciation for your endeavors in co-sponsoring house bill H.R.2291. to extend Federal Revenue Sharing. As I am sure you are aware most suburban comunities are involved in self imposed austerity programs,promoted by necessity to meet the basic needs of their respective citizentry. The somewhat misguided concept of suburban areas, and communities therein related being affluent, is factually a now non-existant entity. Only with people such as you representing in essence the peoples of those communities, can the necessary funding be continued and thereby the level and degree of respective services be continued; In summary I would 11ke to state emphatically, that I firmly believe the Revenue Sharing Program must of necessity be continued, and that any prohibitions relative thereto could seriously impede amount and degree of police service generally. Thank you for your concern in this matter and please be assured of my complete support in your endeavors relative to H.R.2291:

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Donald Dóneske:
Chief of Police:
Riverside, Illinois:

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la answer to your letter of December 11, 1979, Federal Revenue Sharing funds have meant a great deal to the village of Norridge.

These funds have been a tremendous asset to our village, since they have enabled us to continue excellent water service to our citizen users, without increasing rates.

Our use of Revenue Sharing funds for the purchase of Water Department equipment, improvements, and in some cases, actual purchase of water, has kept our water rates down, thus providing lower costs to the users, and has meant a definite savings to our people. This 18 particularly important to those on a fixed income, as many of our retiree citizens are.

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STATEMENT OF HARRY HUGHES, GOVERNOR OF THE STATE OF

MARYLAND, ON BEHALF OF THE NATIONAL GOVERNORS' ASSOCIATION

Mr. HUGHES. Mr. Chairman and members of the subcommittee, thank you for providing me this time to appear before you. I am appearing today on behalf of the National Governors' Association and the National Governors' Association Committee on Executive Management and Fiscal Affairs on which I serve. I am cochairman, with Gov. Lamar Alexander of Tennessee, of the committee's task force on revenue sharing.

These are unsettling times for the country both at home and abroad. We elected officials must provide the leadership and intellectual guidance necessary to move our country forward.

While I believe the President and the Congress are providing that leadership, I also must emphasize the importance of a significant State role in the process of Federal budget reduction. We who are administering, implementing, and partly funding Federal programs have an interest and a responsibility in the substance as well as the effective delivery of those programs.

It is in this regard that I wrote to the President last week. I would like to share that letter with you and have attached it to my testimony to be included in the record of these hearings. With your permission, I would like to share the letter with you now. From here on, I will be quoting from the letter:

DEAR MR. PRESIDENT: I am concerned, both as Governor of Maryland and as Co-Chairman of the Task Force on Revenue Sharing of the National Governors' Association, with the restraints on federal grant-in-aid programs you seek to impose in connection with the anti-inflation program announced on March 14, 1980.

I support the purposes of that program. I also accept that cuts in aid to state and local governments are an essential part of attainment of these purposes. Reductions in federal subsidies to the private sector and increased federal user charges, elements apparently omitted from your program, should also be considered.

Because it is desirable that states have flexibility in responding to the conditions created by cuts in federal aid, it is imperative that such cuts be focused on narrow categorical programs rather than on programs, such as general revenue sharing, which gives states flexibility to respond to areas of greatest need within each state and to fill the widening gaps caused by reductions in categorical programs.

My concerns relate to the principles which I believe must be followed in this necessary effort if random violence to important programs is to be avoided, if the anti-inflation program is to be effective, and if due respect is to be paid to the federal nature of our system of government. These principles are several :

1. It is essential that state and local governments individually, as well as through their national organizations, be actively involved in the identification of areas to be reduced. In anticipation of just such a need to reduce federal grants in aid and improve their effectiveness, the Committee on Executive Management and Fiscal Control of the National Governors' Association, of which I am a ember, has undertaken to survey state governments

identify programs which are most expendable or amendable to consolidation. I would hope the results of this ongoing work will be considered as the administration and Congress make their decision ;

2. We recognize that large-scale consolidations in categorical programs require protracted legislative consideration. I believe that the present occasion requires immediate measures to allow state and local governments greater flexibility in the use of the categorical funds that remain. I suggest that categorical cuts should take the form of ceilings for groups of related programs. The grant

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