This is not Dick Nixon’s New Federalism. This is New Federalism on steroids.
In 1972, the Nixon administration began distributing federal dollars under the rubric of the New Federalism directly to state and local governments. The program was terminated in 1986, during the Reagan years.
In between, revenue-sharing put some $83 billion in the coffers of 39,000 local units of government.
In 2021, under the $1.9 trillion American Rescue Plan, the Biden administration is set to distribute $350 billion to pretty much the same cohort of mayors and county commissioners, but this time in a short 12-month period, from May of this year to May 2022.
For Fayette County, this avalanche of dollars means a whopping $25.1 million – $25,109,959, to be exact.
Greene County is due $7 million from the feds, while Somerset will get $14.2 million.
Washington County is on tap for a cool $98.8 million.
(For the record, Allegheny County is due $350.9 million; Westmoreland’s share comes to $105.3 million and Indiana and Beaver counties will receive $16.3 million and $91.9 million respectively.)
The money is designed, in the words of the U.S. Treasury, to “respond to the COVID-19 crisis and bring back jobs.”
And in doing so, in a throwback to the Nixon-Ford years, local officials will enjoy considerable flexibility when comes to spending the cash.
Spending categories include such things as “health care expenditures”; “premium pay for essential workers”; and water, sewage and broadband projects. Money may also be directed at easing the pain of economic hardship and municipal budget shortfalls, both the result of the pandemic.
In other words, on just about anything and everything, including tourism, vaccinations for COVID-19, lead hazard remediation, housing vouchers, community violence prevention programs, and help for small businesses, nursing homes employees, farmers, restaurant workers, and truck drivers.
About the only thing the money can’t be spent on is to cut taxes, and there is sentiment in some quarters for even that.
President Nixon signed the original revenue-sharing bill into law at Independence Hall in Philadelphia. On national television, Nixon outlined “the New Federalism.”
“After a third of a century of power flowing from the people and the states to Washington, it is time for a New Federalism in which power, funds, and responsibility will flow from Washington to the states and to the people.” The president stressed that the proposals would offer “more money and less interference” to states and local governments and would act “not as a way of avoiding problems, but as a better way of solving problems.’”
Whether the latter occurred is a matter for debate. Nevertheless, Michigan State University’s Mary Schulz of the Center for Local Government Finance and Policy recently wrote, “What if the American Rescue Plan Act ... is the beginning of a new revenue-sharing effort? Imagine what our communities could be like with substantial federal resources.”
This matter of reviving revenue-sharing had been kicking around, prompted as much by the pandemic as anything.
Exactly a year ago, in the spring of 2020, the House Ways and Means chairman, Massachusetts Democrat Richard E. Neal, told the nation’s mayors that Congress should consider “returning to a great initiative that fell to the wayside in the 1980s called revenue-sharing to help us with getting through this challenging moment.”
At the time of its termination in 1986, the benefits of revenue-sharing were clearly recognized. “Big cities,” the New York Times said, “got a big boost and small town America could for first time count on direct aid from Washington.”
On another occasion, the Times said, “For many rural communities and small towns, revenue-sharing funds are the only monetary aid directly provided by Uncle Sam.”
The case for a renewal of revenue-sharing is compelling, and not just because it will swell local government treasuries. It may also help the nation unlimber. There is altogether too much red tape in government and in American life in general.
It seems to take as long to repair a bridge these days as it did to win World War II.
During the early days of the New Deal, when it was imperative that government find jobs for the millions of unemployed, the emphasis was on speed. The presidential aide tasked with whipping the federal government into action, Harry Hopkins, worked off a card table in the White House.
Local governments responded with their own a sense of urgency, flooding state and federal officials with job-creation projects and ideas literally overnight.
Perhaps the American Rescue Plan, with it echoes of revenue-sharing, might help lead the way back to that kind of government.
Richard Robbins lives in Uniontown. His latest book, “JFK Rising,” is available on Amazon. He can be reached at email@example.com.