RALEIGH – I’m sympathetic to the plight of city and county governments having to fashion their budgets downstream of state and federal politicians who tend not to care what fiscal refuse they dump. It’s an old trick to foist budgetary imbalances onto other policymakers while claiming to be making “tough choices.”
But sometimes, to continue the riverine metaphor, local claims of unfunded mandates are little more than carping.
For example, some urban bottom-feeders are attacking President George W. Bush’s proposed FY 2006 budget for shifting the cost of economic development to cities. They decry the Bush administration’s proposal to eliminate the Community Development Block Grant program, through which the Department of Housing and Urban Development routes federal tax dollars to local housing projects, land redevelopment, and subsidies to retail and industrial sites.
The CDBG program costs about $4.1 billion. Other, similar grant programs to localities cost another $1.6 billion. Unfortunately, Bush isn’t proposing to eliminate the entire $5.7 billion category. His budget would merge all 18 items into a single grant program and give it $3.7 billion, constituting a cut in federal funding of about a third.
For this light tap on the welfare state, Bush is being charged with swinging a heavy blow against local communities. “Everything gets dumped down on the cities,” whined Don Plusquellic, the mayor of Akron, to The Wall Street Journal.
This is nonsense. An unfunded mandate is, by definition, a requirement by a higher branch of government that a lower branch of government do something – and to levy the taxes locally to pay for the mandated service. The new “Strengthening America’s Communities” block grants are nothing of the kind. They are not mandatory. Local governments can (and should) refuse them.
More importantly, subsidizing real-estate deals is not a public function, either at the federal or the local level. Even if you assume that the federal government has a legitimate role to play in combating poverty, that role does not extend to the vague category of “community development” activities for which these tax dollars have been spent for years. For example, one might argue that a housing-voucher program assists lower-income people in finding homes without encroaching directly into the private market for new-home construction or redevelopment.
Michael Coleman, the mayor of Columbus, was beside himself when asked about the Bush proposal. The CDBG program “is one of the only remaining economic-development tools the federal government provides to local government,” he told the Journal. “You can’t talk about building the economy when you take away the tools that local communities use to build the economy. Local communities are not going to be able to replace the money.”
Good. Local governments don’t “build the economy.” It really works the other way around. To the extent that cities and counties waste precious staff time and other resources trying to figure out how to secure and spend federal grants for “building the economy,” they are missing the opportunity to do their legitimate jobs well. That means policing the streets, protecting our rights, providing basic public services, and keeping taxes and regulations light.
Go beyond that, and you’re just fishing without bait.
Hood is president of the John Locke Foundation and publisher of Carolina Journal Online.