Tags: states | stiffing | cities

Mayors Blasting Governors For Denying Stimulus Funds

By Dan Weil   |   Monday, 11 May 2009 11:56 AM

Big cities complain that their statehouses are neglecting them when it comes to doling out money from February’s $787 billion fiscal stimulus package.

About $280 billion of that windfall goes to state and local governments. But many major metropolis mayors say states are underfunding them while doling out more generous sums to politically powerful suburbs.

And some state governments, as they pass along money from the feds, are cutting their own allocations to cities.

Years ago plenty of federal money went directly to cities, but not anymore. Direct federal allocations as a portion of city budgets have dropped to as low as 5 percent from as high as 20 percent in the 1970s, Hal Wolman, director of the George Washington Institute of Public Policy in Washington, tells The Wall Street Journal.

Governors, of course, dispute the mayors’ claims. They say they are trying to distribute federal money equitably among cities, and that in some cases they are constrained by Congressional rules or their own state laws.

Charlotte, N.C., Republican Mayor Pat McCrory has complained to the state’s Democratic Gov. Bev Purdue that his city is getting shortchanged. Charlotte officials sought about $220 million this year to finish a highway to serve the city.

But they were only able to garner about $4 million from the stimulus package for their project. And at the same time, the state decided to keep almost $4 million which it originally planned to give Charlotte for highway spending.

McCrory argues that states dole out federal money to cities “by politics and not by need.”

North Carolina officials deny they are stiffing Charlotte, pointing out that the region including the city received $100 million of the $735 million the feds provided the state for road work.

But across the country, big cities are at a disadvantage Wolman says. “If you use state legislatures to distribute federal money, the suburbs are going to do better than cities,” he tells The Journal. Suburbs "have grown enormously, and in political strength, and cities have not."

A bigger issue than how federal money is divided between cities may be whether their states accept all the federal money in the first place.

In Texas, Louisiana, South Carolina and Alabama, for example, Republican governors have fought to refrain from taking federal money to boost unemployment compensation.

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