Plenary Session Transcripts

Governors Attending:

Guests:

Discussion Subjects:

Governors and the problems of the cities; revenue sharing; major issues in human resources; transportation; response to the challenge of crime; environmental quality; evening address by the President of the United States; addresses by other federal officials

Points of Interest:

President Nixon spoke to the Governors about his new administration's strategies for overhauling the structure of the federal government, pruning failed programs, and gearing programs to the concept of social investment.

During discussion, Governors focused on one particular aspect of the administration's proposals: namely, revenue sharing. Dr. Arthur Burns, Counsellor to the President, said that by giving money directly to states to spend as they saw fit, revenue sharing would eliminate problems associated with administrative requirements, restrictions, and matching provisions that accompanied grants-in-aid to the states. He said that two factors would determine state-by-state distribution of federal funds: population, and the ratio of state and local revenue to a state's total personal income. States would be required to pass through a percentage of federal dollars to local governments, based on a formula that measured how much of a state's revenue was raised by local governments and how much by the state. Governor Arch Moore of West Virginia pointed out that his state's constitution specifically prohibited pass-through of funding to local governments. But Dr. Burns responded that federal legislation could be worded such that money to be passed through to local governments would go to the states as "trustees."

Governors also talked about the Nixon administration's proposals for federal takeover of welfare financing and for adoption of a national universal health insurance programs that was to be accompanied by hospital cost controls.

Labor Secretary George Shultz talked about the administration's proposals to improve occupational safety, which would permit states to take over the establishment and administration of standards. He also spoke of the Manpower Training Act proposal to put a mechanism in place that would enable state and local governments to plan their own manpower programs. Governors expressed concern that the administration's requirement for states to pass money through to local governments would enable Mayors to choose prime manpower program sponsors without consulting the states. But Secretary Shultz made clear that whatever plan a city developed would have to be submitted to the Governor and become part of the state's manpower plan.

Transportation Secretary John Volpe spoke of urban congestion and the need to establish a trust fund for urban mass transportation. Governors questioned being required to spend federal transportation dollars on specific modes of transportation if those modes were not suited to a state's specific needs, and it was proposed that the states be able to spend federal dollars more flexibly. Ultimately, Governors agreed on language in a national transportation policy proposal that recommended study of "The establishment of trust funds for various modes of transportation supported by revenues derived from the respective modes and...general appropriations."

On behalf of the association's Committee on Law Enforcement, Governor Calvin Rampton of Utah summarized activities that had occurred at state and local government levels since the 1968 Omnibus Crime Control and Safe Streets Act had established the Law Enforcement Assistance Administration. The new law was designed to give states block grants to establish criminal justice planning programs, requiring that at least 40 percent of planning funds and 75 percent of action funds be made available to local government units. Governors also talked about organized crime, narcotics abuse, and campus unrest.

Memorable Quotes:

Governor Richard Hughes of New Jersey said this of President Nixon's three-pronged proposal for welfare reform, tax reduction, and revenue sharing: "While the needs of the suburbs are great...there can be no question that the cities deserve first call on the Nation's limited resources...For the cities, the irony of the one-man-one-vote decision lies in the fact that once-dominant rural representatives have been replaced largely by suburban representatives, who serve their constituency as faithfully as their predecessors—and also at the expense of the cities. Under these circumstances, substantial new help for the cities must come from the federal government...A first step is to re-shape...[the] three measures that are now before Congress...First, the national minimum standard set for welfare should be adjusted to reflect realistically regional differences in the cost of living...It is probable that the mechanical cotton-picker provided far more of an incentive to...[rural to urban] migration than any differentials in welfare payments among regions. Second, the proposed tax reduction should be limited at first to persons with incomes of less than $10,000...This will produce an additional—and necessary—$3 billion for investment in welfare reforms and revenue sharing. Finally, let us recognize that revenue sharing, on the scale now contemplated, will not contribute substantial funds to the Nation's cities."

Then-Governor Ronald Reagan of California said: "Between the state and the local and the federal government, by and large, we are already taking about as much money out of [the pocket of the taxpayer] as can possibly be taken and maintain a free economy. So perhaps our problem of financing is one of distribution. I believe that the past custom of financing directly through the federal government has been one in which there is a sizable discount or a skimming off at the top for administrative overhead. The Nixon administration's approach of reducing this vast federal bureaucracy and getting the money more directly to the scene of action—the local community and the State—is one which, I believe, will provide more money for these projects out of already existing funds..."

President Richard Nixon said: "In proposing to begin the sharing of federal tax revenues with the States—to be spent as the States see fit—we are putting our money where our principles are. The power to tax is the power to destroy; but the sharing of tax revenues provides the power to build. We have proposed, for the first time in history, a comprehensive and effective delegation of federal programs to state and local management."

Secretary of Transportation John Volpe said: "...what about the overall traffic paralysis within our urban regions? Nearly 80 percent of our people now live in the cities, and the percentage is increasing...the urban population will double in about thirty years. My friends, the automobile, carrying about one and one-half passengers on the average trip, can no longer be counted on alone to provide transportation. The number of automobiles in this country has doubled since 1950. By the year 2000 the number will double again...President Nixon has recognized the dangers of relying solely on one mode of transportation. He knows...that if we expect to make any headway with our urban problems of congestion, poverty, pollution and employment, we are going to have to try something new in the way of urban transportation. We will be compelled to invest many billions of dollars over the coming years if we are to provide the new and updated public transportation our urban residents need to assure mobility.  But the cities alone cannot sustain this burden...Without federal help, public transportation would probably dry up in all but a few of the larger cities...We have proposed to Congress that this Nation invest $10 billion in transit aid over a twelve-year period."

Selected Policy Positions Adopted:
(1) Urging federal cooperation with states to coordinate planning of community development programs; (2) urging the federal Office of Intergovernmental Relations, in cooperation with the National Governors' Conference and local government groups, to evaluate the possibilities and mechanisms for better coordination and delivery of federal and state programs in rural areas; (3) urging Congress and the Administration to take action to correct the confusing, contradictory, duplicative, and overlapping mass of federal planning requirements and definitions for federal programs; (4) urging all levels of government, in cooperation with private industry, to expand the market for housing production; (5) urging the Administration to streamline and coordinate federal housing programs; (6) urging an increase in obligational loan authority of the Farmers Home Administration for rural housing programs; (7) reiterating support for revenue sharing and recommending that: it be formulated on the basis of income tax payment, appropriations to states should specify pass-through formulas to local governments, and the allocation by formula should be made to relatively populous cities and counties based on population and on the ratio between the total receipts from all taxes imposed by eligible cities or counties and the total receipts from all taxes imposed by the state and its political subdivisions; (8) affirming the principle that state and local bonds issued for general governmental purposes must remain tax exempt; (9) reiterating concern  that action be taken to counteract the effects of court decisions giving an unfair tax advantage to national banks; (10) supporting substitution of a federally financed system of welfare payments—administered by states—for the current federal-state program for the aged, blind, and disabled and for dependent children, and including the general assistance programs now financed by the states themselves; (11) urging adoption by the federal government of a national universal health insurance program coupled with hospital cost controls; (12) urging greater federal responsibility for education financing and consolidation of grants; (13) urging enactment of federal legislation to consolidate manpower programs; (14) pledging state cooperation in the development of a national transportation policy under which all modes of transportation shared in the maintenance of public facilities that they used and benefited from, goals and guidelines were incorporated for environmental quality control, and trust funds were established for various modes of transportation supported by revenues derived from the respective modes and minimum general appropriations; (15) urging the establishment of a National Airport/Airways Trust Fund; (16) urging that funds from the Highway Trust Fund not be suspended or withheld and that federal gas taxes not be increased; (17) urging establishment of a National Urban Mass Transit Trust Fund; (18) urging full funding of the Omnibus Crime Control Act of 1968; (19) expressing commitment to the integration and coordination of all state and local crime control efforts into a streamlined, efficient system of criminal justice administration; (20) pledging support and cooperation in the intergovernmental war on organized crime; (21) urging states to enact state drug control legislation that gave the courts and correctional authorities flexibility to permit individualized sentencing and treatment, to increase efforts to educate the public—particularly young people—about drugs, and to develop programs for the rehabilitation and treatment of offenders; (22) recommending enactment of federal and state laws to control the transportation and possession of military-type firearms and ordnance, and to prohibit certain categories of persons—such as convicted felons—from buying, owning, or possessing firearms; (23) urging adoption of a national policy or goal regarding voluntary distribution of population within the Nation's boundaries; (24) endorsing programs to promote tourism in the United States; (25) given the rising problem of crime, holding that "national leaders must draw nearer to God...[and] provide the spiritual leadership for which our people will have the will and the means to heal this great land so that we might all, once again, live in God's peace;" (25) urging the President to request that the United Nations adopt—and its member nations agree and subscribe to—an international agreement providing that hijackers of commercial and private aircraft be immediately returned for trial to the member nation in which the hijacked aircraft was registered, or otherwise to the member nation from which a hijacked aircraft departed; (26) urging Governors to cooperate in designating state bicentennial commissions and assisting the U.S. Bicentennial Commission in preparing for the 200^th anniversary of American independence; and (27) indicating gubernatorial support for the U.S. bid to hold the 1976 Summer Games in Los Angeles and the Winter Games in Denver.

Presidential Addresses: