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7338917
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State and Local Fiscal Assistance Act Amendments of 1975 [Fact Sheet]
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7338917
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document
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State and Local Fiscal Assistance Act Amendments of 1975 [Fact Sheet]
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White House Press Releases (Ford Administration)
Press Releases
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Legislation
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7338917
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25
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1975-04-25
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1975
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Digitized from Box 10 of the White House Press Releases at the Gerald R. Ford Presidential Library
EMBARGOED FOR RELEASE
UNTIL 2:00 P.M. EDT
April 25, 1975
Office of the White House Press Secretary
THE WHITE HOUSE
FACT SHEET
THE STATE AND LOCAL FISCAL ASSISTANCE ACT AMENDMENTS OF 1975
The President is transmitting to Congress today the State and
Local Fiscal Assistance Act Amendments of 1975 which will extend
and improve the General Revenue Sharing program to provide
essential fiscal assistance to general purpose governments
through September of 1982.
BACKGROUND
The General Revenue Sharing program was authorized by Title I
of the State and Local Fiscal Assistance Act of 1972, which was
signed into law on October 20, 1972. The Administration has
conducted a careful study of the program, which expires at the
end of 1976, considering issues raised by interested groups and
the several independent studies addressing themselves to revenue
sharing. This review has led the President to offer this legisla-
tion, which seeks to continue the benefits of this program, in
its existing broad outlines. It also would propose certain
changes to strengthen the ability of General Revenue Sharing to
contribute to a vital and balanced Federal system.
IMPORTANT REASONS TO EXTEND THE PROGRAM AS PROPOSED
(1) It provides $39.85 billion to State and local general purpose
governments over 5 and 3/4 years to make it possible for them
to perform the essential tasks required by their residents.
- Renews a program that has already distributed almost $19
billion to nearly 39,000 State and local governments;
-- These funds are used to pay for vitally needed day-to-day
services and capital expenditures of benefit to a wide
spectrum of Americans;
- States and communities especially our large cities where
it accounts for about 1/3 of all Federal aid, depend on
shared revenues to such a degree that termination of or a
decrease in funding would lead to cuts in essential services
and/or counterproductive increases in taxes;
- It is vitally important that the program be renewed at the
earliest possible time to assure governments planning their
FY 1977 budgets in the Fall of 1975 that there will be a
full year of GRS funding in FY 1977.
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(2) It contributes to a revitalized, balanced Federal system
in which States and localities can play their appropriate
roles.
- General Revenue Sharing has slowed the march of ever
greater power and control over the lives of our citizens
to Washington:
-- State and local governments can better perform those
public tasks for which they are best suited as a result
of sharing in the advantages of the Federal tax system;
- GRS strengthens the ability of the Federal system to
respond to the diversity of our large nation and to
preserve our essential freedoms.
(3) State and local budgets as a whole are currently in a
deficit situation.
- State and local governments have had to face the impact
of rising costs along with the effects of unemployment on
both expenditures and tax receipts. For the first quarter
of 1975, deficits on State and local general fund account
stood at approximately $10 billion;
- There is little doubt that GRS is vitally needed to prevent
cuts in essential services accompanied by increased un-
employment, and tax increases ---- all of which would con-
tradict our efforts to further economic recovery;
-- State and local budgets are likely to remain under severe
pressure in the foreseeable future.
(4) The General Revenue Sharing program has given more balance
to our system of Federal assistance to State and local
governments.
- The program has provided a badly needed source of assist-
ance distributed by formulas responsive to need and tax
effort which elected State and local officials can use
to meet needs which they identify;
-- Funds can be spent freely without trying to meet burden-
some and restrictive Federal requirements;
- Shared revenues reach many smaller governments which
are either ineligible for or not knowledgeable about
most of the other forms of assistance or are unable to
deal with the often complex procedures associated with
these grants.
(5) Allocation of shared revenues in the States and communities
has focused public attention on the governmental process at
these levels of government.
-- The program has for many citizens served as a lesson in
how to influence public decisions in the States and
localities;
- Elected officials familiar with a wide scope of State and
local issues and responsive to voters, as opposed to
program-oriented bureaucrats in Washington, make most
decisions about the use of shared revenues.
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(6) The President's proposal would strengthen the current
program in several important ways.
!
The ceiling on local entitlements would be raised to
allow the formula to work in a less constrained fashion:
-
An assurance that means for citizen participation are
available would be required;
***
The Secretary of the Treasury would be given greater
flexibility in requiring the reporting and publicity of
uses of shared funds so as to improve the effectiveness
of these requirements and make them less burdensome
--
The remedies available to the Secretary of the Treasury
in preventing the discriminatory use of GRS funds would
be clarified.
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