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A. Distribute funds and technical assistance, with local governmental coordination, to encourage local entrepreneurship and indigenous industry in deprived areas.

B. Grant the Small Business Administration (SBA) increased authority and funds, and require that SBA emphasize loans in areas which have substantial unemployment and loans or loan guarantees to "high risk” ventures.

C. Economic Development Administration (EDA) and ŠBA loans, grants and guarantees should be made available to community development corporations as well as private profit-making corporations.

(Adopted at the annual meeting of the U.S. Conference of Mayors, in Philadelphia, Pa., June 16, 1971.)

RESOLUTION 23. Housing OPPORTUNITIES WHEREAS, there are inadequate housing opportunities for low and moderate income families in many metropolitan areas; and

WHEREAS, zoning and land use restrictions are sometimes used to impede equal housing opportunities throughout metropolitan areas; and

WHEREAS, some cities do not have adequate land and few cities have the additional financial resources necessary to provide adequate housing, education, police and fire protection, public works, health, and other public services; and

WHEREAS, the U.S. Constitution, the Housing Act of 1949, and fair housing legislation has established that the provision of and access to and adequate supply of low and moderate income housing regardless of income or race in all parts of our country is a vital national goal; and

WHEREAS, in furtherance of this goal, each level of government, whether it be federal, state, county, or municipal, has an affirmative duty to assure that a full range of housing opportunities becomes a functional reality; and

WHEREAS, the federal government, pursuant to the Civil Rights Act, has an affirmative obligation to administer its programs and to allocate its resources with this national policy firmly in mind; and

WHEREAS, President Nixon's policy on equal housing opportunities announced on June 11, 1971 raises great concerns about its potential effectiveness in achieving such opportunities; and

WHEREAS, low and moderate income groups, including blue and white cɔllar workers, returning war veterans, the elderly, the young and minorities, cannot afford new single family housing, for all of which in 1970 median sales price was $23,500 including subsidized 235 lower income housing;

NOW, THEREFORE, BE IT RESOLVED that the USCM strongly urges President Nixon to support the incremental initiative taken by Secretary George Romney of the Department of Housing and Urban Development (HŮD), and direct all other appropriate federal agencies to cooperate with HUD to promote the development of low and moderate income housing throughout all Standard Metropolitan Statistical Areas, including suburban communities; and

BE IT FURTHER RESOLVED that President Nixon, or where appropriate Secretary Romney, direct federal agencies administering programs such as, but not limited to, highway appropriations, public works projects, and FHA mortgage loan guarantees, as well as community development projects, to advise all communities that the future availability of federal funds for these projects will depend upon the applicant-community's commitment to provide low and moderate income housing, and that to refuse to cooperate in this regard will serve to terminate all such federal assistance; and

BE IT FURTHER RESOLVED that the federal government should take great care in analyzing the availability of housing opportunities when locating a government facility or when awarding a federal contract to a private company, and that where cooperation is not forthcoming from the community or company in question, the federal government should refuse to so locate the facility or approve the contract; and

BE IT FURTHER RESOLVED that the USCM requests that a delegation of mayors meet with the President to discuss the ramifications of his policy on the development of low and moderate income housing for the nation.

The CHAIRMAN. We are obligated to a few other members who would like to interrogate this witness before he leaves.

Mr. Rousselot.

Mr. ROUSSELOT. Mr. Mayor, in your statement you mentioned you favored this legislation, and, in the legislation, it mentions the intolerable level of high employment.

In your opinion, will this do anything substantial in that direction, even if you got all of the money that we do not have, because, as you know, we are more broke than you are.

Mr. ROUSAKIS. The obvious answer to that is that any new construction, of course, will create jobs.

Mr. ROUSSELOT. In your case, how many?
Mr. Rousakis. I really have no way of judging that right now.

Mr. Rousselot. This is purported to be one of the great objectives of this legislation, it begins to solve the levels of employment.

Can you give us the number, in your case, of how many actually will be involved as a result?

Mr. RousAkis. I do not have any idea of what it would mean dollarwise to my community, so that I could give you a projection on that, sir.

Mr. ROUSSELOT. Could you give us some kind of an idea for the record, later on?

Mr. ROUSAKIS. Here again we go back to the statement, the rule of thumb, that the expenditure of $1 million for a public facility produces 100 onsite and offsite construction jobs and 150 jobs in the consumer industry, wholesale and retail trade.

Mr. ROUSELLOT. Do you think that that applies to your area?
Mr. ROUSAKIs. Yes, sir.

Mr. ROUSSELOT. Can you give us an estimate, on your part, of how many actually would be hired that are not now employed?

Mr. ROUSAKIS. How much money we would be talking about?

Mr. ROUSSELOT. Whatever the formula of the bill says would be applied to your area.

Mr. ROUSAKIS. I am not aware of a specific formula here.

Our projected costs in Savannah at the present time for the construction of our waste-treatment facility and the other lines, and interceptors, et cetera, will come to some $24 million based on this rule-of-thumb projection here. That would mean 2,400 construction jobs, and 3,600 additional jobs.

Mr. RousseLOT. Thank you.

Now, you mentioned that part of your problem in going to your local taxpayers for this is that it really kind of socks it to the inner city-I think that is the term you used.

Would you rather that we sock it to our taxpayers to raise the money for this?

Are you willing to support an increase in, say, the income tax, or whatever, to raise this money?

Mr. ROUSSELOT. You are?
What percentage of increase would you be willing to support?

Would you be willing to support an increase of, say, 5 or 10 percent in income tax to support this bill?

As you know, it is estimated we are going to go in debt this year anywhere from $40 billion to $50 billion at the Federal level. This bill is talking about additional dollars, and you are willing to have us vote for a tax increase of what, 5, 10 percent?

Mr. RousAKIS. What would that produce?

Mr. ROUSSELOT. Well, a 5 or 10 percent increase in the Federal income tax would be a substantial increase in dollars. It would probably cover many of the very expensive programs we are now debating right here.

Are you willing to say to your taxpayers, “Yes, we have asked for these dollars from the Federal Government, and we are also willing to have the taxes increased to cover the cost?"

Mr. ROUSAKIS. Let me start by saying “Yes." We faced that problem on a local level, and I guess we could have ducked it and said "Let it ride for a few more years,” but we met it head-on. We have incieased our property taxes some 20 percent this past year, we have doubled our parking tax, had a 150-percent increase in our beer tax, and a 60-percent increase in water and sewer rates.

You have the capacity through the Federal income tax to tax in the areas that we can't as a city. This is where we are experiencing one of our greatest problems, in that, also, the new taxable properties are not being developed inside the city limits but outside. Furthermore, the Federal income tax is progressive, local property taxes are regressive. Finally, when city taxes are rising, Federal income taxes are being cut.

Mr. ROUSSELOT. So, the answer to the question is "Yes," that you are perfectly willing for us to increase the Federal income tax in order to cover the cost of this and many other programs?

Mr. ROUSAKIS. To meet a need. We have a need here; we have faced it on the local level.

I would support the Federal Government doing it on a national level.

Mr. ROUSSELOT. Thank you very much.
Mr. Hanley?
Mr. Hanley. Thank you, Mr. Chairman.

I ask this question at the request of Mr. Annunzio who had to leave for another committee activity.

Mayor, the formula measuring the direct economic impact on a $5 billion investment in water and sewer facilities indicates that some 500,000 onsite and offsite jobs would be directly created for publicworks-project workers and suppliers of project materials and services, but the economic impact is obviously far greater than this.

Now, Mr. Annunzio has a two-pronged question:

First, could we assume, from your statement, that the total number of jobs created throughout the economy would at least be double the 500,000 jobs which are being directly produced?

And, second; in your judgment, would it be possible to reduce nationwide unemployment by 20 percent, reduce the number of unemployed from, say, 5 million to 4 million with this measure?

Mr. ROUSAKIS. Let me do a little figuring here.

Theoretically, I would have to say that we would have to get some professional economic help to answer that.

The CHAIRMAN. Are you willing for him to submit his answer for the record, Mr. Hanley?

Mr. HANLEY. Fine.
Mr. Mayor, if you would be good enough, submit the response.

The CHAIRMAN. You may extend your remarks and answer that for the record, please.

(In response to the questions of Mr. Annunzio, the following letter was received from Mayor Rousakis :)


May 25, 1972.
U.S. House of Representatives,
Longworth House Office Building,
Washington, D.C.

DEAR CONGRESSMAN ANNUNZIO: On behalf of the National League of Cities and the United States Conference of Mayors, I am responding to your question regarding the impact on unemployment of passage of H.R. 13853.

As we testified, $1 million in public works expenditures should produce 100 on-and-off-site jobs, and 150 additional jobs through a multiplier effect. Therefore, an expenditure of $5 billion would produce 500,000 construction jobs, and 750,000 additional jobs in consumer industries wholesale and retail trades, for a total of 1,250,000 jobs. This well may be a conservative figure, depending upon the strength of the multiplier factor involved.

If the total unemployed in the nation is 5 million persons, an increase of 1,250,000 new jobs generated could reasonably be expected to cut the unemployment rate by 20 percent. This is absolutely necessary, but we must also consider the underemployed and those too discouraged to continue seeking jobs. National policy must also be directed to them, for they are of national concern. That is why we support H.R. 13853 as an addition to existing federal grant-in-aid programs and revenue sharing. Sincerely,


Mayor, Savannah, Ga. The CHAIRMAN. We have time for one more. Mr. Wylie? Please be brief, because we must excuse the gentleman. Mr. WYLIE. Thank you, Mr. Chairman and Mr. Mayor. Why is Savannah under directives from EPA at the present time?

Mr. ROUSAKIS. Because, in primarily the downtown section of Savannah, we are dumping raw sewage into the Savannah River.

Mr. WYLIE. What is the population of Savannah?

Mr. ROUSAKIS. 188,000, close to 190,000. I am sorry. The city of Savannah is 120,000 and Chatham County is 190,000.

Mr. WYLIE. Would you say this has been a lack of planning in the past as to why you are in this situation now?

Mr. RoUsakis. I do not, Mr. Wylie, think it is unlike any other community in the Nation.

Mr. WYLIE. I would just give you one example. I am from Columbus, Ohio. We have a population of 534,000. It is one of the fastest growing communities in the United States.

We made plans for a second-treatment plant about 10 years ago, and we are not under directives from EPA but the local people are paying for the sewage-treatment plant through a revenue bond. Has this been thought of as a possibility?

Mr. RoUsakis. We are doing that now. I have been in office since October of 1970. On our local level, the city did drag its feet in going into the pollution abatement program and the construction of waste treatment facilities, and, if it would have been done 10 years ago or 5 years ago, instead of the $24 million to $27 million that we are going to be facing today, we could have probably built our facilities for $20 million. But we can't go back now and say "Why did not previous administrations move on pollution abatement?"

It is not a fun-thing to do, as I say. We went across the board on increases in taxes, service fees, water rate, and everything else this year, but we faced up to it. We hear now it is going to cost $24 million to $27 million, and we have issued revenue bonds to amortize the cost of the waste treatment facility.

Mr. WYLIE. Would Savannah be an eligible area under the provisions of this bill as a community designated by the Secretary of Commerce as a redevelopment area or economic development center?

Mr. ROUSAKIS. I think it would.

We do not have a major unemployment problem at the present time in Savannah, but we are surrounded by counties that do have, that are economically depressed and do have severe unemployment.

Mr. WYLIE. What is your unemployment rate at the present time? Mr. Rousakis. Roughly, 6 percent.

Mr. WYLIE. Around 6 percent. That would have to be “6 percent,” I think, to qualify under this bill.

The CHAIRMAN. Would you be willing to yield to Mr. Widnall?
Mr. WYLIE. Yes, I would be glad to yield.
Mr. WIDNALL. Thank you, Mr. Chairman.

Mayor, on page 4 of your testimony, you referred to the vague "communities.

In view of the fact that in the economic development programs that we have on the books right now, they are spelled out, section 102(a), page 19 of the booklet put out by the Committee on Public Works, on page 27, under title IV, "Area and District Eligibility, Redevelopment Areas, and Area Eligibility," it seems to me that there is no vagueness as to what they spell out as to eligibility there.

What is your problem?

Mr. RoUsakis. It is not a major problem, Mr. Widnall. It is just more specific in the definition "general purpose local government.”

Mr. WIDNALL. I wish you would pin it down.

You do not have to do it right now. But pin it down by a further statement, as to what you really mean by "vague.”

The CHAIRMAN. Are you willing to do that, Mr. Mayor?

(In response to the question of Mr. Widnall, the following letter was received from Mayor Rousakis:)


May 25, 1972. Hon. WILLIAM B. WIDNALL,

U.S. House of Representatives, Rayburn House Office Building, Washington, D.C. DEAR CONGRESSMAN WIDNALL: The concern of the National League of Cities and the United States Conference of Mayors over the eligibility criteria of H.R. 13853 was directed toward an objective of assuring that funds made available would go only to units of general purpose local governments. The construction of basic public facilities should be undertaken only in conformance to plans developed by local elected officials or their delegates, and should be built only by units of general purpose local governments. Our concern would be that use of the broad criteria for EDA assistance would remove these basic community development considerations from local government and place them into broader or even sub-city areas, and out of the hands of elected representatives of cities and counties. Sincerely yours,


Mayor, Savannah, Ga. Mr. Wylie. I have one other question I want to follow up. The CHAIRMAN. Make it brief. Mr. Wylie. I think I yielded.

Are you aware, Mayor, that during the past 3 years this Congress has authorized $18 billion for water and sewer grant facilities?

Mr. ROUSAKIS. I will accept that.

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