U.S. mayors on Saturday welcomed the $825 billion stimulus plan introduced in Congress this week, but worried that much of the assistance would stop at the state level and not reach cities.
“This stimulus package is a good start, it’s a great start. I would like to see more money directly allocated to cities and not passed through,” Los Angeles Mayor Antonio Villaraigosa said at the U.S. Conference of Mayors convention.
Mayor Abram Wilson of San Ramon, California, put it more bluntly, saying, “You’re going to give the money to the state and we’re not going to see it.”
The stimulus plan introduced by Democrats in the House of Representatives includes increased spending on public transit repairs, as well as loans for updating sewers. Cities would also get a boost in school spending. The plan adheres largely to measures requested by President-elect Barack Obama, who takes office on Tuesday.
Obama wants to spend hundreds of billions of dollars to jolt the country out of a deepening recession. He has stressed that an economic recovery package must include public works and assistance for states and local governments, which have had to make steep spending cuts as their revenues decline.
States face the worst economic downturn in a quarter of a century and their financial health is likely to worsen through 2009, the National Governors Association said last month. Cities, too, are grappling with dwindling property tax revenues due to the housing downturn at the same time as they find it harder to take out debt in the municipal bond market.
INFRASTRUCTURE, NOT SHORTFALLS
Dallas Mayor Tom Leppert said the plan would help his city’s transit system buy buses that rely on alternative energy. He said he worried funds would end up plugging holes in state budgets instead of being spent on job-creating efforts such as infrastructure projects.
“If we take these dollars … and we put it in for cities or states simply to make budget shortfalls, we’re in the same position next year as we were last year,” Leppert said.
He also said some of the stimulus measures may pass through state governments so slowly that cities will have to wait years to get assistance.
Under the stimulus proposal released on Thursday, $87 billion would go to helping states cover the costs of Medicaid, the healthcare program for the poor, in the hopes of freeing up money for states to spend on other programs. A further $21 billion would go to building schools and $30 billion would be dedicated to highway and bridge construction projects.
House Speaker Nancy Pelosi has said the economic recovery bill will be voted on in February. An aide to the House Ways and Means Committee told the mayors that the House was working closely with the Senate to craft similar bills so the final measure can be quickly signed into law.
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