So I assume we would be entitled to about half, and it would be a very significant part of the total.

Mr. CRAMER. And even though the cost to the Federal Government for that very small increase is $600 million

Mr. CONNOR. That is the total. It, of course, would not be the total of the cost of the 4,000 in Detroit.

Mr. BLATNIK. Well, it is obvious that there are areas, such as yours, where acute economic situations exist and are a major problem, a very grave problem.

No one has contended that this is the answer to the whole economic problem but, certainly, thorough consideration and deep thought should be given to doing something. If it is not enough, it does not mean that we should continue to do nothing.

We will just continue to have recessions if we do not have something. I contend that it is within the skill, the knowledge, and the competence, plus the technical ability that we have in this country, and plus the tremendous capabilities, I contend it is within those tremendous capabilities of our industries to do our best to keep men and women, who want to work, at work, and keep the economy on the uptrend and as healthy as it can be.

It is being done in every major industrialized country in the world. No major industrialized country in the world has the unemployment rate that we have and have had particularly over the last 8 years.

Mr. SCHERER. The real cause is the high production cost. That is the real evil. It is our labor costs and high taxes that make it impossible for us to compete any more with foreign made products. That is the real evil.

Mr. CONNOR. Mr. Chairman, if I might offer one more comment: I would like to point out that in the city of Detroit we have held the line on our costs of local government to the point that there has been no appreciable increase in that during the last several years and, as a matter of fact, by reducing the assessments on personal property, particularly inventories and equipment, from 90 percent where it was, cash value, just a few years ago down to a present of 70 percent we have been attempting within the full limit of our abilities, at the local level, to assist in keeping local production costs, at least our contribution to them, at the lowest possible minimum.

Mr. SCHERER. I was not talking about your cost of local government. I was talking generally about industrial production costs being up due to our continuing high labor costs, continuing high taxes in this country. We are losing our markets both foreign and domestic because of these.

Mr. CRAMER. Well, if the gentleman will yield

The other side of the problem is that we are faced with some of the problems that your community has.

How are these things going to be financed?

We are faced in this particular legislation with the basic question of who should decide, the Congress or the President?

Should Congress delegate this much authority to the President? We are faced with the further question: Is it better to accelerate present programs and to go into new construction and so forth under

present programs, in which there are hundreds of millions and, yes, just billions of dollars available for acceleration, as a means of

increasing employment, or should we start an entirely new program which could mean 100 percent Federal grants to any type of local public works program?

Now, you admit that these are very serious considerations and Congress does not have only one solution available. The thing now that bothers me with regard to this testimony is that the assumption is that the direction that the administration proposes the delegation of this substantial authority and so forth is the only direction available. Now, that is not true. There are other directions, such as acceleration orders under the present programs, where money is already available; $89 million, for instance, in Area Redevelopment alone out of $90 million made available that has not been used.

There is $500 million in community facilities that can be 100-percent Federal loans for construction, and no interest loans for advanced planning, for advanced planning, for instance.

Now, Congress has a lot of alternatives and we think it is our duty to consider all of these alternatives, and not to rubber stamp what the President sends down here as a proposal when, as a matter of fact, it is, in large measure, extremely unsound.

on.

Mr. CONNOR. I will say one other thing. I do not

Mr. BLATNIK. You may say that, and then we would like to move

Mr. CONNOR. All right. Most of the existing programs in the public works field, we feel, in the Detroit area are discriminatory against the larger cities. They have a ceiling or they have a declining scale for the larger city on the degree of participation that is possible.

We feel that any other approaches that may be suggested that will go to meeting this problem, we are in favor of, because, among other things, we want to keep the Detroit area at a high productive level so that it can continue to be a major contributor to both Federal income tax and otherwise to the whole economy of the Nation. Mr. BLATNIK. Gentlemen, thank you very much.

The Honorable James B. McKinney, mayor of Sacramento, Calif., will speak on behalf of the American Municipal Association.

STATEMENT OF JAMES B. MCKINNEY, MAYOR OF SACRAMENTO, CALIF., ON BEHALF OF THE AMERICAN MUNICIPAL ASSOCIATION

Mr. BLATNIK. Mayor McKinney, I have a deep appreciation for your time and realize that you, too, have to catch a plane this afternoon.

Mr. MCKINNEY. Yes, this afternoon.

Mr. JOHNSON. Mr. Chairman?

Mr. BLATNIK. Mr. Johnson?

Mr. JOHNSON. I would like to welcome Mayor McKinney here today. He represents the capital city of the great State of California, and he has a very fine city.

Mr. McKinney has been one of the fine young mayors who have come up in California, and I am sure that my colleague, Mr. Baldwin, joins me in welcoming our mayor from north California here this morning.

Mr. SCHWENGEL. As a Representative from Iowa, who has a great interest in California, because some of our people go there, I want to welcome you, also.

Mr. MCKINNEY. Yes, I understand that you have a program to keep people in Iowa, have you not?

Mr. CRAMER. I will say that those of us from Florida will be glad to hear what the mayor of Sacramento has to say, too.

Mr. MCKINNEY. Mr. Chairman and members of the committee, I am James B. McKinney, mayor of Sacramento, Calif. I appear before you in behalf of the American Municipal Association, an organization representing over 13,500 municipal governments of all sizes, to support the Standby Capital Improvements Act of 1962, H.R. 10318, and to comment upon some of the features of the Public Works Coordination and Acceleration Act, H.R. 10113.

I understand that the official position of our association has been presented in full to this committee by a previous witness and I will not repeat it here. I would like to point out, however, that our association does not have specific policy on the particular legislation which you are considering; rather, we are on record as favoring Federal grants and loans to municipal governments in the public works field because we feel that these grants and loans are fully justified by the situation which exists locally.

I also understand that the merits of this legislation in terms of the economic benefits to be derived from an accelerated program of public works expenditures have been discussed fully with this committee by expert witnesses who are thoroughly versed in that field. We recognize that all governments are faced with the problem of persistent high unemployment and that steps must be taken to meet this problem.

Municipal officials, on the other hand, must represent the needs of the Nation's urban population. In this we can speak with some knowledge. The present situation of municipal public works must be considered against a backdrop of the following factors: (1) Federal and local public works programs during the depression years; (2) relative stability of urban populations prior to 1940; (3) World War II and the Korean conflict; and (4) the postwar population increase in numbers and concentrations.

As a result of determined Federal, State, and local efforts during the 1930's, I think that it is fair to say that public facilities, while perhaps not wholly satisfactory, achieved a nearly adequate level before World War II. This situation was abetted by the fact that our urban population did not increase rapidly during this period and we were not subject to the vast rural-urban population shifts which we have seen recently. Greater governmental attention, plus stable population therefore roughly equaled adequate local public facilities construction. But after 1940 this Nation was forced to defend itself in a global war. It was correct and necessary that public facility construction should be limited during this crisis in the greater effort to achieve victory. In the immediate postwar years, we still faced a shortage of materials which made postponed construction even more difficult to accomplish. Yet we faced a situation where we had fallen behind in the public works field and were unable to catch up.

During and after the war, the Nation's birth rate rose and people moved, more and more, to the urban centers. We then began to face the problem not only of providing public facilities for the natural population increase of our urban areas but also to provide facilities for previously rural populations and at the same time trying to make up the backlog left over from the war years.

When we were able to get down to business on needed public works, the Korean conflict again changed emphasis of the national effort and shortened the supplies which are necessary to a comprehensive public works program.

At the present time our municipalities are faced with the results of 20 years of population growth and migration and delayed construction which were completely beyond their control but demand their immediate and long-term attention. We must fashion an adequate system of public facilities if our increasingly urban civilization is to persist and to flourish.

What are the needs in this area? As of February 1962 the backlog of State and local public works is $55 billion, according to Engineering News Record; and this includes only public works which have had engineering attention. One wonders what the figure would be if it included all public works which are needed as well as those represented by this $55 billion figure.

The next logical question is: Have local governments made sufficient efforts to meet this demand for facilities and services? Since the end of World War II, municipal indebtedness has quadrupled and since 1946 municipal income has tripled. In spite of the heavy debt which cities incurred, in spite of the tax raises by cities, the problem of inadequate public works remains.

The magnitude of the problem can be understood from the huge backlog of projects awaiting financing. These are some 88,000 projects which have had engineering attention. One can only wonder what the figure would be if all needed public works were included rather than only those which had already had engineering.

Our association, therefore, urges you to favorably consider H.R. 10317 since it would provide badly needed assistance to local governments in the public works field. We are of the opinion that assistance is in order, independent of the fluctuation of the economy. In this regard, we welcome the proposed amendment to make available $600 million for immediate use in the public works field. It is, indeed, a step in the right direction. We urge the committee to consider using as much of this fund as possible for grants to local governments.

Concerning one feature of H.R. 10113, I would like to comment briefly. We are convinced that an orderly collection of accurate data in the public works field on a national basis would be most helpful to all concerned. A coordinator of public works could make a valuable contribution to our national efforts in this regard. I hope the committee will give this concept serious consideration in its deliberations on this legislation.

Thank you, Mr. Chairman, and members of the committee.

I would also like to submit to the committee a statement on the public works problems of Sacramento, and I will not bother to read

this but just add it to the prepared statement on behalf of the American Municipal Association.

Mr. JOHNSON (presiding). Without objection, it is so ordered. (The document referred to follows:)

THE PUBLIC WORKS PROBLEMS OF THE CITY OF SACRAMENTO

POPULATION

Sacramento is a fast growing city. The population figures since 1900 illustrate this fact:

During the last 11 years the population growth inside the city has been 45 percent.

The suburban population surrounding Sacramento-all close in urbanized areas, is 11⁄2 times Sacramento's population. There are 500,000 people in the metropolitan area. And these suburbanites make problems for the city. They use our street systems, use our parks and recreational facilities, use many other city facilities.

STREET PROBLEMS OF SACRAMENTO CITY

In a study prepared by the State of California in 1960 the critical deficiencies on the major arterials alone within city limits were listed as $60 million. This was on streets of city responsibility. With street revenues of about $1 million per year we can barely scratch the surface in attacking this problem.

SEWERAGE

In a fast-growing city the extension of sewerage and drainage to serve newly developed areas. The area growth of Sacramento City has been 400 percent during the past 11 years. The annexations which caused this increase were prompted by the desire for city services, such as sewerage and drainage. Although spending more than $2 million a year on sewerage and drainage we are failing to meet demands. In June of this year the city voters are being asked to approve another bond issue of $7 million for drainage alone.

While Sacramento City has sewage treatment we know that betterment of river quality standards will soon require additional treatment. The cost of this increased treatment will be more than $7 million.

WATER SUPPLY

In 1959 Sacramento voted $26 million of bonds for additional filtration plant capacity and improvements in the water distribution system. We doubled water rates to defray these costs. We know that when these new facilities are completed in 1963 we must immediately begin worrying about more extensions and more capacity. We also face the prospect of needing more money, much more money.

DOWNTOWN REHABILITATION

Sacramento City, like most cities of the country, is struggling with the problem of preserving its central business area and thus indirectly preserving its tax base and fiscal solvency.

In June we are asking the voters for $7 million for financing off-street parking. Although Sacramento was a pioneer city in the field of publicly owned parking and has some 2,000 spaces available for downtown shopper parking we are failing to meet the demands.

We have a redevelopment program underway which will completely rebuild the older business areas of Sacramento. Even though normal redevelopment ests are met with tax increase anticipation bonds and Federal assistance, the city government itself must make substantial annual contributions to service projects involved in redevelopment.