Mayors of three cities hit hardest by the economic crisis – Philadelphia, Atlanta and Phoenix – asked the federal government Friday for a piece of the $700 billion bailout package, saying they need help just like financial institutions.
Mayor Michael Nutter of Philadelphia said he wants “to make sure that cities and metro areas are at the table, that their voices are being heard, that our challenges and problems are well understood, so that we can get relief.”
The mayors proposed providing loans to help cities pay pension costs. They also want $50 billion in loans for infrastructure investments and additional one-year loans to cities that are unable to borrow cash because of tight credit markets.
“The future prosperity of this country is tied directly to our ability to provide basic services and quality infrastructure to our citizens,” Atlanta Mayor Shirley Franklin wrote in a letter to Rep. Charles Rangel, chairman of the House Ways and Means Committee. “We are at serious risk in failing in that most basic public responsibility.”
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President-elect Obama has also called for some sort of aid to state and local governments so they do not have to raise taxes or lay off workers while the federal government tries to revive the economy. But he has not proposed or endorsed a specific plan.
Also Friday, Chuck Reed, the mayor of San Jose, Calif., said he planned to make a separate request for $14 billion of the bailout package to pay for mass transit improvements and expansion of the area's clean-technology businesses.
“If the federal government is going to be doling out money, we'll be asking for our fair share,” Reed said. “As the 10th-largest city in the country, we should at least get 2 percent. That would be fair.”
In Atlanta, an expected budget shortfall of $50 million to $60 million means that 4,600 city employees will have their weekly hours and pay cut by 10 percent. The city has also adopted a hiring freeze for most agencies.
And those were not the first budget cuts. Earlier this year, Atlanta laid off 372 employees and eliminated about 900 jobs.
The mayors made their request in a letter to Treasury Secretary Henry Paulson.
Asked about the request, a Treasury spokeswoman referred to Paulson's statement Wednesday that assistance to state and local governments was not the purpose of the bailout funding.
“The focus … is to stabilize financial institutions and strengthen the financial system, promote lending and so on,” Paulson said.
U.S. cities have seen revenue fall 4.3 percent from last year, according to Chris Hoene, director of policy and research at the National League of Cities.
For the first time since 1985, a survey showed that revenue from property, income and sales taxes are all down simultaneously, and widespread cuts in services are likely, he said.
New York Mayor Michael Bloomberg said he is open to receiving federal assistance, but he doesn't think it's likely.
“We would certainly love to have our share of it,” he said Friday. “Everybody's lining up now. There's no industry that isn't saying ‘We need a bailout.' There's no government entity that all of a sudden isn't saying ‘We need a bailout.'”
Other cities such as Dallas and Wilmington, Del., hope to obtain help from a separate assistance package being promoted by the U.S. Conference of Mayors.