INSIDE WASHINGTON/1999 Congress satisfies local leaders

The partisan bickering that dominated the first half of the 106th Congress left lawmakers little time to interfere with or inflict serious damage on cities and counties. In fact, local leaders are pleasantly surprised that federal funding and programs essential to cities and counties were not gutted in the waning days of this year’s appropriations process.

“I think we did a lot better than expected, particularly in the appropriations areas related to things that are really important to us,” says Cameron Whitman, director of policy and federal relations for the National League of Cities.

Throughout the year, cities and counties dodged a number of bullets. For example, a proposed $250 million cut in the Community Development Block Grant program turned into a $50 million increase after lobbying by local government groups.

Those groups also were able to fight off cuts to the Home Investment Partnership Fund, a 10-year-old affordable housing program, and help stall potentially troublesome legislation like the Religious Liberty Protection Act, which they claim would have pre-empted local zoning laws.

Lobbying by local government groups also helped save programs like the Community Reinvestment Act (CRA), which requires banks to invest in poor communities. (Opponents led by Senate Banking, Housing and Urban Affairs Chairman Phil Gramm (R-Texas) had threatened to eliminate the CRA during the debate over a bill overhauling the banking, insurance and investment industries.)

Local governments also benefited from bitter fighting between Republicans and Democrats over appropriations, particularly the Labor, Health, Human Services and Education funding bill. Eleventh-hour negotiations last month produced more flexibility for local governments to spend the $1.3 billion set-aside in the bill for hiring new teachers and training current educators. This year, local governments were allowed to use just 15 percent of the federal funding to provide training for their teachers, even if training was deemed a greater priority than hiring new teachers. They will now be allowed to use up to 25 percent of the money for teacher training.

Also on the education front, city and county leaders won a victory when funding for the E-rate program, which helps bring technology into classrooms and libraries, was increased by nearly $1 billion.President Clinton ‘s veto of the Republican-led $792 billion tax cut also drew praise from local government leaders, who reasoned that the cut would eventually affect crucial funding to local governments. “Local officials understand what it really means when people start talking about surpluses,” Whitman says.

Despite those victories, local leaders realize that they have only a short time to relax before Congress returns next month. Already, concern is building over the fact that HUD’s budget is $4.2 billion in the red because of the advanced appropriations process used to bring the Fiscal Year 2000 budget in under spending caps.

Additionally, in five months, Congress will take up the Internet sales tax moratorium, which local governments say deprives them of the revenue they need to help pay for critical services such as public safety and public works. (Last year, Congress passed the Internet Tax Freedom Act, which places a three-year moratorium on sales taxes for Internet purchases.)

Meanwhile, the Advisory Commission on Electronic Commerce, a federal panel investigating the issue, will report back to Congress by April 2000. Virginia Gov. Jim Gilmore, who heads the panel, supports the sales tax ban. The issue is expected to be the primary point of concern for most local government organizations.