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Sending a wake up call: Bradley meets with White House, Congress.

NLC Past President Tom Bradley, the Mayor of Los Angeles, last week met with President Bush and the Congressional leadership and then, in his first public testimony before Congress since the civil disturbances, joined Philadelphia Mayor Ed Rendell in sending Congress and the White House a "national wake-up call from cities all across the country:

"Let me tell you, as the mayor of one of the largest cities in this country, we need your help. We can no longer shoulder the burden alone, and benign neglect is not acceptable."

The call came as the administration unveiled a significantly expanded enterprise zone proposal (See chart) and Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.) prepared to offer a comprehensive tax package to help all distressed communities and guarantee access to credit and insurance for businesses located in blighted areas of communities. The Senate Finance Committee could begin work on Bentsen's proposal as early as this week.

The key meetings also came as negotiators at the White House and Congress indicated they were close to an agreement on acting on a package which would include enterprise zones prior to the July 4th Congressional recess.

On Thursday, NLC President Glenda Hood wrote to Bentsen to support his efforts to act promptly on a comprehensive tax package to assist distressed communities across the nation:

"We believe any city package should include, in addition to an expanded enterprise zone program, extension of the expiring small issue idb and mortgage revenue bond programs, and the expiring low income housing and targeted jobs tax credit programs. We believe it must include other tax exempt municipal bond changes to provide cities with tools to leverage investment and credit availability. We want to ensure that any tax bill enacted as part of a response to cities benefits all distressed cities and provides incentives for affordable financing and insurance for those businesses most likely to create job opportunities."

Hood wrote that NLC wants to ensure that cities have some role in coordinating enterprise zones, but that zones by themselves would be insufficient:

"They will neither reach enough cities, nor provide sufficient incentives for credit availability for small businesses. Without a specific role for cities in coordinating enterprise zones with local economic planning and development, we share the concern of many in the administration and the Congress that the zones could merely shift jobs and opportunities from adjacent neighborhoods, instead of creating new jobs and opportunities.

"We are especially concerned at the impression that the problems that Los Angeles is experiencing are unique to the largest cities, when, in fact, crime, poverty, and lack of meaningful job opportunities that contributed to the alienation and hopelessness in LA exist in cities of all sizes and parts of the country."

Administration revises enterprise zone proposal

After the White House meeting with Mayor Bradley and a subsequent meeting with Republican mayors on Tuesday, HUD Secretary Jack Kemp and Fred Goldberg, the assistant Secretary of the Treasury, testified before Bentsen on Wednesday in support of a revised enterprise zone proposal which would make the program an entitlement program--automatically qualifying all eligible cities --and would permit cities to issue tax exempt municipal bonds for commercial uses in such zones.

The administration estimates that the changes could make as many as 150 cities eligible and more than one area in some cities. There were disagreements, however, between Goldberg's and Kemp's testimony, and the administration has not made clear when or if it will submit actual legislation to clarify its intentions.

The administration revisions would also, for the first time, give cities an opportunity to participate directly in the program. Under the revised proposal, cities would be able to issue tax exempt financing to provide low cost loans of up to $250,000 per business for commercial activities--an option that was eliminated under the 1986 Tax Reform Act. The bonds would have to come out of the existing state volume cap, however, making access for most cities unlikely.

In response, Bentsen indicated his version would be targeted to people living in the zones themselves, and that he saw the need to address access to insurance protection for any business in a distressed area. Bradley had made a very strong point, both in his meeting with President Bush and with Bentsen's committee, that focusing federal tax benefits on workers who live and work in an enterprise zone was a critical element.

In her letter to Bentsen, Hood supported the change to eligibility by formula, rather than by discretionary selection, and for changes to authorize local governments to certify the businesses that could qualify for the federal tax credits. She and Bradley urged that any enterprise zone proposal be combined with new anti-drug and anti-crime funds for the "Weed and Seed" program.

She also urged the creation of a new distressed communities bond program dedicated only to tax exempt bond proceeds used in distressed areas; modification of current restrictions on small issue idb's to permit their use for certain commercial purposes in distressed areas; and modification of the current restrictions on bank deductibility to permit full bank deductibility and comparable insurance deductibility for banks or insurance companies that purchase or hold general obligation, revenue, or private activity bonds where the proceeds are used in distressed areas--or for a bank with a Superior CRA credit rating.
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Title Annotation:includes related information on enterprise zone proposals; Tom Bradley
Author:Shafroth, Frank
Publication:Nation's Cities Weekly
Date:Jun 8, 1992
Previous Article:Fire staffing goes to vote on May 20.
Next Article:White House slows city relief, delaying key municipal programs.

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