Mr. Chairman, members of the Committee, I am Florence Rubin, Urban Policy Chair of the League of Women Voters of the United States. The League is a multi-faceted citizen's education and political action organization with 1400 Leagues in all 50 states, Puerto Rico, the Virgin Islands, and the District of Columbia. I am here today to testify on behalf of the League of Women Voters' support of the reauthorization of General Revenue Sharing at the present annual level of funding--$6.85 billion. We also urge specific formula adjustments that would better target General Revenue Sharing funds to areas of greatest need, with particular emphasis on the nation's distressed cities. We support multi-year renewal to ensure the necessary predictability for orderly financial planning. I also want to recall for you our participation in 1975 and 1976 in a major coalition effort in favor of mandated citizen participation, civil rights enforcement and auditing requirements, which were enacted as amendments to the General Revenue Sharing Act. We believe these provisions have had a beneficial influence on the program, and I want to underscore our support for their continuation. This In June 1979 the LWVUS completed a study of urban problems conducted by local League affiliates in each of the 50 states. League members in suburban, rural and urban communities all across the country are concerned about the well-being of the nation's cities and believe that special federal attention should be directed to cities experiencing financial distress--largely as a result of national or regional economic trends beyond their control. distress is shared by the many jobless, low income and minority residents concentrated within their borders. Despite promising signs of revival in some parts of some cities, the fact remains that many cities are still suffering severe financial hardship. Their service needs are high; their tax revenues are inadequate despite a generally high tax effort; and they are forced to rely heavily on federal and state aid. In looking at how the federal government can best address these problems the League has endorsed unrestricted financial assistance as one effective strategy. The addition of General Revenue Sharing (GRS) to local budgets since 1972 has been a vital factor in keeping cities solvent and in maintaining services needed for a decent quality of life. Our members were impressed by such comments as that of the mayor of Newark when he said, "The federal government has many programs that assist us in our efforts to provide the vitally needed new social services for our residents. However except for General Revenue Sharing, you offer us no program that enables us to offset the destructive burden of paying for the services we already provide." During the last several months our research and education affiliate, the League of Women Voters Education Fund, has participated in a joint project with the Center for Community Change, the Center for National Policy Review and the National Urban Coalition to examine the options for achieving greater equity in the distribution of General Revenue Sharing funds. Details are set forth in the joint testimony given today. The following list highlights the suggestions the League of Women Voters would support to improve the program: o Targeted formula: The five formula changes that have been suggested by the Administration in allocating the local shares are a move in the right direction. While the present formula does direct money to central cities, the five changes would improve the targeting: lowering the floor from 20 percent to 10 percent and raising the ceiling from 145 percent to 175 percent of the statewide per capita average, limiting a locality's payment to no more than 25 percent of its budget and using factors to scale down funding for high income jurisdictions and for tax enclaves. The League supports their intent--although we have not had an opportunity to see their full distributive effects. O Eligibility standards: We urge you to go a step further by establishing a threshhold of need for eligibility of both localities and states to participate in GRS. We are mindful of the political unpalatability of eliminating jurisdictions from the program, but we find it difficult to countenance the distribution of tight federal funds to jurisdictions or states that don't need help while others are struggling to stay solvent or to maintain minimum levels of service. In particular, the effect of severance taxes that are providing bonanzas for some states should be taken into account in allocating funds to states. O Incentives to states: Allocation of at least a portion of the states' share among states according to a formula that takes into account 1) the degree of equalization exhibited by each state in its local assistance programs and 2) a measure of need. The accompanying testimony from the group suggests ways of developing such a formula. The result would be to reward states that are distributing in an equalizing way and to favor poorer states. We also urge you to consider whether the counties should continue to serve as the distributors of GRS to the jurisdictions within their borders or whether direct distribution to the general purpose governments would serve equity better. There is mounting evidence that elimination of the county middleman would have a favorable effect on central cities. A word about the states' role in General Revenue Sharing: We are certainly mindful of the vulnerability of the states' share in the renewal debate. The LWVUS supports the thesis that states have an important, albeit often poorly filled role in assisting their distressed cities. We would be sorry to see the states' share lost for that reason. Our major concern however is the loss of $2.3 billion from the program. While it is true that some states have large surpluses and will not suffer noticeably if the state share is dropped, others will. We would hope that if not all of the state share can be saved, at least part will remain for distribution to states with the greatest need or for reallocation to distressed cities. And, last but certainly not least, the League continues to support the 1976 GRS amendments that we helped to pass. Each of these amendments--mandated citizen participation, civil rights enforcement and auditing and accounting requirements--has a vital role in ensuring accountability to the federal government and to the residents of each jurisdiction receiving funds. With the approach of the renewal debate, we canvassed League leaders across the country for their perceptions on how the 1976 amendments are working. Using these results and the League's long experience with citizen participation in government programs, the League of Women Voters Education Fund has prepared an analysis on the impact of the amendment mandating citizen participation. I will summarize some of the major points from this paper, which we will be pleased to submit to the committee as soon as possible. By the one easily quantifiable measure--citizen attendance at hearings--the impact of the citizen participation requirements appears to be disappointing, a closer look shows that the requirement has already had limited success. Even more significantly, the experience under the mandate suggests ways to develop a more effective citizen-government partnership for determining local priorities for spending GRS funds through the local budget. Using increased citizen access to decisionmaking as an initial yardstick, |