Congressional Budget Office director Alice Rivlin testified yesterday that like most of the rest of his budget President Carter's urban spending proposals for 1979 are basically the same as in 1978.
But, Rivlin cautioned the House Budget Committee, President Carter plans to propose an urban policy package within a few months, so it is somewhat "premature" to make judgments about the administration's policies.
While the budget is expected to have an impact little different from recent budgets, she noted that there were big increases in urban spending last year, due in large part to the economic stimulus package, and those enlarged urban programs remain in the 1979 budget.
She told the budget committee's task force on state and local governments that some of the President's proposed tax changes might have an adverse impact on cities.
The extension of the investment tax credit to buildings has the "effect of favoring new construction over the repair, maintenance and rehabilitation of existing property and are thus biased against central city development."
Most new building, especially for the industrial and utility structures that are beneficiaries of the credit (commercial buildings are excluded) takes place outside the city "boundaries where land is cheaper and more easily assembled."
She noted that the president proposed extending the tax credit to rehabilitation of structures, but she said it is too early to tell whether this will "offset the potential anti-urban bias from extending the tax credit to new structures."
Richard P. Nathan, an urban expert for the Brookings Institution, said that without any "trumpets and flourishes" an urban policy that is "actually quite sensible" has been emerging in recent years.
He said that Congress has passed a number of bills such as accelerated public works and education and training that have been going to the cities and, "more particularly the cities that need help the most."
Nathan noted that while the traditional view of federalism is that the relationship exists between the federal government and the states, more and more the federal government is developing direct relationships with local governments.
Taking out medicaid, Nathan testified, one-half of all federal grants to states and localities go to cities or other local governments.