Cities Put in Bad Shape by 'No New Taxes' Slogan

THE JOURNAL RECORD, July 11, 1989 | Go to article overview
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Cities Put in Bad Shape by 'No New Taxes' Slogan


WASHINGTON (AP) - The ``no new taxes'' promise of federal and state politicians is a fine campaign slogan but it has put many cities in bad shape, the National League of Cities reported Monday.

Officials said that in the end local governments are the ones stuck with raising taxes and fees to pay their bills.

``The ledgers of local government show the reality of what happens when others say `no new taxes,''' said Alan Beals, executive director of the league. ``The burden is shifted, the taxes are shifted, and the cities get clobbered.''

He said local governments not only have to carry out their traditional responsibilities but they have to cope with a growing list ``of crisis issues or unfunded mandates'' from state or federal agencies.

The league's report showed that half the 362 cities surveyed are spending more than they expect to take in in 1989. And 57 percent said their income is not keeping up with inflation.

``When federal government pulls back, state government pulls back, the impact is on local government,'' Beals said. Asked to describe the cities' financial ailment in human terms, he said they were suffering from high stress, high cholesterol level and heart attack.

Sixty-nine percent of the cities raised fees and charges for municipal services last year; 41 percent raised property taxes; 36 percent reported imposing new fees and charges, and 10 percent instituted new taxes, the report said.

Beals pointed to new drinking water regulations anticipated by the Environmental Protection Agency, expected to cost $3 billion for plants and equipment and $500 million a year to operate.

``No one disputes the importance of safe drinking water; when we have to foot the bills, we are fully justified in objecting to the relentless federal intrusion into the municipal bond market,'' Beals said.

``By writing clumsy regulations and meddlesome rules that mangle the municipal bond market, our government is adding millions of dollars to the cost of financing these projects from our already strained local tax base.

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