One of the few bright spots in the recent $350 billion tax cut is that $20 billion was given to states to help them face budget shortfalls. Unfortunately, a similar provision to help the nation's cities and counties didn't end up in the legislation that President George W. Bush signed.
This omission is just another example of Bush's skillful use of political posturing. He gets the credit for giving individuals -- especially wealthy ones likely to donate to his campaign -- tax cuts and doesn't take the blame for decisions by states and local governments to cut services, raise taxes or both.
Tom Goodman, a spokesman for the National Association of Counties, recently told The Hill that 70 percent of counties are dealing with budget shortfalls. Some counties have even dropped their memberships with the organization because of financial woes. That's pretty significant when you consider that memberships start at just $360 per year and that the organization lobbies the federal government for aid to the states.
The situation is just as bad in the nation's cities. According to an article by Lance Davis on the National League of Cities' Web site, mayors across the country are laying off employees and not replacing them, or offering early retirement packages. In Tempe, Ariz., for instance, Mayor Neil Giuliano cut 150 full-time positions, or about 10 percent of the city's work force. Giuliano is also delaying the start of some capital-improvement projects.
Some cities, such as West Valley City, Utah, are even dipping into their reserves. Margaret Peterson, a West Valley City councilwoman, told Davis: "The reserve funds were the last thing we wanted to use, but they were also the last thing we could use. We're at the end of things we can do in the short-term."
Other leaders say the quality of life in their cities is declining. And while city revenues are dropping, the leaders have to spend more money on homeland security. Some state and local governments, as I noted recently, are weighing whether or not to adopt "orange" level security precautions the next time the terror-alert level is raised.
The situation is only likely to get worse at both the state and local levels. According to a National League of Cities report by Michael A. Pagano and Christopher W. Hoene, state governments are facing a $29.9 billion budget shortfall this year; in 2004, that number will rise to $78.4 billion. So states trying to balance their own budgets aren't able to help out local governments.
All of this is leading to a split between state and local governments. Boston Mayor Thomas Menino, who heads the U.S. Conference of Mayors, says his colleagues are "extremely disappointed" with Congress' decision. "Mayors fought hard not only for assistance to cities but also for state aid, at a time when governors were reluctant to speak up for themselves," he said in a statement. "Providing federal aid to states without any requirement that they, in turn, help cities is economically and politically foolish."
The question is, with all of this happening, why on earth did Bush push for another tax cut this year? Even if he thought his (dubious) 2001 tax cut would help boost the economy, he was well aware of the current problems state and local governments are facing. The situation is especially disturbing when you consider that Bush is a former governor, as is his homeland-security director, Tom Ridge; his brother Jeb, meanwhile, is governor of Florida. It's not as though Bush can't find people who can tell him how difficult it is to govern with no money.
The irony is that while some taxpayers think they're getting a big tax cut from Washington, they may have to pay more in taxes if their local governments are forced to raise extra money to cover needed services that the White House no longer wants the federal government to pay for. But because governors and local officials aren't eager to raise taxes -- it didn't work for Walter Mondale in the 1984 presidential campaign or for then-Gov. Jim Florio (D-N.J.) in his 1993 re-election bid -- a cut in state and local government spending is the likely result. Karl Rove's first priority may be re-electing Bush, but the fact that he gets to limit government growth is just as integral a part of his plan to reshape American politics. It's a civics lesson of the worst kind.
Mary Lynn F. Jones is a Prospect senior editor.
