We thank you for this opportunity to express our views to the submmittee about this vital piece of legislation. Our intimate involveent with the workings of States and localities, and the link between e program and the livelihood of many of our members, make our mmitment to the passage of a comprehensive and equitable general venue-sharing program a steadfast one.

Mr. FOUNTAIN. Thank you very much for your statement.

Our next witness is Arnold Cantor, assistant director of the deartment of economic research, American Federation of Labor and ongress of Industrial Organizations. He is accompanied by Robert IcGlotten, associate director, department of legislation.

Both of these gentlemen are representing the AFL-CIO. We are elighted to have them with us this morning.

TATEMENT OF ARNOLD CANTOR, ASSISTANT DIRECTOR, DEPARTMENT OF ECONOMIC RESEARCH, AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS; ACCOMPANIED BY ROBERT MCGLOTTEN, ASSOCIATE DIRECTOR, DEPARTMENT OF LEGISLATION

Mr. CANTOR. Thank you very much, Mr. Chairman. Mr. McGlotten had a meeting, but hopefully he will be back before I complete our testimony.

My name is Arnold Cantor. I am the assistant director of the department of economic research of the AFL-CIO.

We are pleased to appear in support of a reauthorization of the general revenue sharing program for 5 more years at the present $6.85 billion annual level.

Recession, unemployment, rampant inflation and taxpayer resistance at all levels of government have resulted in an enlarging of the Nation's public investment gaps over the past decade. The prospects for the next few years point to even greater strains on the fiscal capacities of State and local governments, and there is a clear need to at least maintain, if not expand, those programs that are preventing a worsening of the situation.

As an example of this need, we should like to call attention to the data from the U.S. Department of Commerce-attached to my statement-showing the dismal record of State and local public construction over the past decade.

Mr. FOUNTAIN. Without objection, the data referred to will be entered in the record at this point.

[The material follows:]

Note: Outlay figures include grant-in-aid funds from the Federal Government

e Estimate

SOURCE:

U.S. Department of Commerce, Bureau of Economic Analysis,
Government Division

Mr. CANTOR. According to the Commerce Department, in 9 out of ne past 11 years, the real volume of outlays for State and local public onstruction declined. In 1979, State and local governments spent $40 illion on public construction, including Federal aid. After adjusting or inflation, this represents a rate of 32 percent below 1969 levels. In eal terms, on a per person basis these figures show that public contruction represented $151 per capita in 1969, compared with only $95 last year. And these figures do not reflect the recent huge increases n interest rates and their impact on current State and local construcion activity and the likely further depressing effects due to the inability of State and municipalities to borrow to finance needed public facilities.

Many communities that were particularly hard hit by the 1974-75 recession continue to experience stagnation and decline. They have still not recovered and remain extraordinarily vulnerable and ill equipped to deal with another economic downturn.

An examination of unemployment data for the Nation's metropolitan areas highlights the continuing economic problems. The most recent figures-December 1979-show that there still is a large number of areas with extraordinarily high rates of unemployment. In December 1979, when the national average rate of unemployment was at 5.9 percent-it is now 6.2 percent-62 metropolitan areas recorded unemployment rates of 6.5 percent or more and 18 of these metropolitan areas had unemployment rates of 8.5 percent or more. This is shown on table 2 which I have submitted for the record.

Mr. FOUNTAIN. Without objection, a copy of table 2 will be entered in the record at this point.

SOURCE:

8.5

9.3

8.7...

9.3

8.8

8.7

9.0

9.2

10.7

Bureau of Labor Statistics, U.S. Department of Labor -- preliminary

Mr. CANTOR. In recent years, grants in aid to the States and loilities, including revenue sharing, have grown substantially—from 19.8 billion in 1975 to an estimated $88.9 billion in 1980.

This is indicated on table 3 which I have submitted for the record. Mr. FOUNTAIN. Without objection, a copy of table 3 will be entered n the record at this point.

[The material follows:]