Urban lobbyists, fearing the loss of billions of dollars in federal aid to cities, yesterday attacked a study that claims many of the nation's larger cities are not troubled financially.
The study by the accounting firm of Touche Ross & Co. and the First National Bank of Boston said cities could be economically and socially decrepit and fiscally sound all at the same time.
As result, many cities don't need massive infusions of federal money to solve their problems, according to the study, released Tuesday.
That conclusion shocked many city lobbyists especially those at the Washington-based U.S. conference of Mayors, whose 800 city members could stand to lose a substantial portion of the $6.8 billion in federal general revenue sharing money if Congress takes the accounting and banking firms' report to heart.
Authorization for revenue sharing spending expires next fiscal year, much to the chagrin of city advocates who fear that attempts to renew the federal spending could fall prey to balanced budget fever in a political campaign season.
It is against that backdrop that officials at the mayors conference launched their attack yesterday. It also was the backdrop for the House subcommittee on fiscal and intergovernmental policy which began hearings Tuesday on the topic, 'Is The Urban Crisis Over?'"
"It is a banker's report,' said conference executive director John Gunther, commenting on the Touche Ross-First National Bank of Boston Study. "It is a bookkeepers manual that is based on inadequate data," Gunther
The two-year study was based on 1975 data. However, Dr. James M. Howell, chief economist and senior vice president for the Boston bank, and Charles F. Stamm, Touche Ross' chief management consultant, said yesterday that the 1975 findings are more relevant because they were made during a severe economic downturn.
Howell and Stamm said that one of the study's major findings is that a city's fiscal condition -- its tax rates, debt and expense levels -- cannot be judged on the basis of its social and economic conditions alone.
But Gunther countered that the study ignored some major points, such as the differences in the quality and kinds of services provided by individual cities, in drawing its conclusions.
"Who furnishes health services? What city is paying for welfare benefits? ... These are major differences that the study does not take into account," Gunther said.
For their part, Howell and Stamm said yesterday at a press luncheon that their study is "really step one" in an overall process to find better ways to keep cities fiscally solvent and to help those in trouble.