- The Washington Times - Thursday, February 27, 2003

WASHINGTON, Feb. 27 (UPI) — The nation's county government leaders Wednesday joined state officials in asking Congress for some federal help in the face of widespread budget shortfalls.

Nearly 72 percent of America's counties are facing revenue shortages, according to a survey released by the National Association of Counties. About 56 percent of them are facing reductions in state funding for state-mandated programs.

"Local and state governments are finding it increasingly difficult to provide basic services to our citizens due to the magnitude of the budget shortfalls," said Kenneth Mayfield, a Dallas County, Texas county commissioner and association president.

State governments are facing shortfalls of about $30 billion in the current fiscal year ending in June and projected deficits of up to $80 billion in fiscal 2004. States are using up rainy day funds, cutting programs, or raising taxes.

"County governments are feeling the brunt of such actions," Mayfield said.

About 25 percent of the counties are planning to cut health services, according to the survey conducted in January by NACO and the Carl Vinson Institute of Government at the University of Georgia.

Thirty-seven percent of the counties facing state reductions will reduce services and 17 percent will increase taxes, according to the survey. At the same time, the counties reported that they are seeing an increasing demand for services. A 60 percent increase in demand was reported in jails and correctional institutions.

The county officials called on Congress to pass an economic growth package that would stimulate the economy and provide significant aid to state and local governments, noting that they employ 16 million Americans and impact the national economy.

"Over 50 percent of state and local budgets are for human investment in education and training as well as for physical infrastructure," Mayfield said. "Cuts in public services may counteract federal efforts to provide assistance to the unemployed. Layoffs and cancellations of capital projects may hinder economic growth and increase unemployment while tax increases may offset the stimulus provided by federal tax reductions."

NACO also called for legislation authorizing states to require retailers in other states to collect and remit sales and uses taxes on Internet and mail order sales. In 2001, counties, cities and states lost an estimated $13 billion in revenues because retailers were not collecting those taxes. By 2005, the losses are projected at $45 billion, NACO said.

"Given the fiscal crisis faced by most states it is time to require collections on what is not a new tax, but one that is already due," Mayfield said.

NACO also called on Congress to appropriate $3.5 billion in fiscal 2004 to aid local first responders in preparing for homeland security. The county officials said they were shortchanged in fiscal 2003 when only $1.5 billion was approved.


(Reported by Phil Magers in Dallas)

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