Don’t reduce the deficit at counties’ expense
Here is an excerpt from a letter addressed to Alan Simpson and Erskine Bowles, co-chairmen of the bipartisan National Commission on Fiscal Responsibility and Reform, which is formulating a proposal to reduce the federal deficit.
On behalf of the National Association of Counties (NACo) and America’s 3,068 counties, I am writing to convey our views as you address efforts to provide recommendations in dealing with the nation’s fiscal challenges. As the Commission evaluates steps to balance the budget, counties are concerned that too much focus will be placed on reductions to domestic discretionary spending programs, within which many programs critical to counties’ ability to fulfill their numerous responsibilities are funded.
Recommendations that ultimately result in cost shifting to state and local governments will only exacerbate the current fiscal strain and delay efforts toward economic recovery or deficit reduction. For the same reasons, recommendations must also avoid creating underfunded or unfunded mandates for state and local governments.
Over the next two years, local tax bases will suffer from depressed property values, hard-hit household incomes and declining consumer spending. Further, reported state budget shortfalls for 2010-2012 will pose a significant threat to funding for local government programs. In this current climate of fiscal distress, local governments are forced to eliminate both jobs and services.
In May and June of 2010, NACo, the National League of Cities (NLC) and the United States Conference of Mayors (USCM) conducted a survey of counties and cities across the country for the purpose of gauging the extent of jobs losses. The surveyed local governments report cutting 8.6 percent of total full-time equivalent (FTE) positions over the previous fiscal year to the next fiscal year (roughly 2009-2011). If applied to total local government employment nationwide, an 8.6 percent cut in the workforce would mean that 481,000 local government workers were or will be laid off over the next two-year period.
Counties are responsible for a substantial portion of America’s transportation infrastructure — 45 percent of the nation’s bridges, 44 percent of the highways, and one-third of the airports and transit systems are county-owned, often financed by property and sales taxes and/or various forms of user fees. The revenue from these sources [is] decreasing.
When the Commission considers reform to federal infrastructure programs, counties would urge them to see infrastructure spending as an economic driver that in the long term causes economic expansion and deficit reduction.
The federal government must be the leader in spurring infrastructure development in the short term and maintain a key role as a partner in infrastructure development in the long term. The federal government’s targeted investments in transportation, broadband, businesses incubators, water/wastewater infrastructure, community facilities, community and economic development through the community development block grant program and a host of other key infrastructure programs are critical to our intergovernmental framework for financing infrastructure and will play a key role in reducing the deficit through spurring economic expansion.
When the Commission considers reforms to entitlement programs, counties urge you to bear in mind the fact that Medicaid provides the essential core funding for the local health care safety-net for low-income and other vulnerable populations. Reforms [that] simply shift costs to state and county taxpayers are not reforms at all.
While none of the decisions will be easy, we are ready to continue our intergovernmental partnership and welcome consultation or any questions you may have.
About the author
Larry E. Naake, Executive Director, National Association of Counties (NACo)
