In the first year after federal revenue sharing funds started flowing to local governments in late 1972, fire engine manufacturers reported to the federal government a near doubling in sales.
According to the Office of Revenue Sharing, many local government offcials six years ago saw revenue sharing money as a windfall that might not come again. So, they bought things - animal shelters, mosquito control chemicals, fire engines.
Now, however, the Office of Revenue Sharing and budget makers for local governments in the Washington area say revenue sharing funds have become an essential source of revenue that supports normal government operations.
In the current fiscal year, Montgomery County uses its $8.294 million in revenue sharing funds to pay for about one-third of the yearly police department cost. Arlington County uses its $2.47 million to help pay for fire department salaries. Fairfax County uses its $6.7 million to pay interest on county debts.
"We have really come to depend on it (federal revenue sharing money) in our budget processess," says Ron Coen, a budget analyst for the Fairfax County Office of Management and Budget.
A spokesman for the federal Office of Revenue Sharing says the $6.82 billion paid annually to 39,000 state local governments nationwide has become over the past six years a source of in 3/4 ome much like "any other tax revenue."
Under federal guidelines that went into effect in 1977, local governments are free to spend revenue sharing money on anything they legally can spend their own money for.
Before that time, the money was required to be spent on capital expenditures, like new fire engines, or in any of eight categories ranging from public safety to social services.
Of the major jurisdictions in the Washington area, only Alexandria is sticking to what was for many governments the normal practice of spending about half its revenue sharing money on one-shot capital items. Alexandria used $25,000 of its $2.19 million this year to buy dentures for indigent residents.
Jim Randle, Alexandria's assistant city manager for management and budget, says the city spends about half its money on one-time items "to hedge against possible discontinuance" of the revenue sharing money.
Congress in 1976 extended the program through Sept. 30, 1980. The amount of money a jurisdiction is entitled to is based on a complex formula that weighs, among other things, per capita income, local tax burdens and population.
The District of Columbia, which receives about $28 million from the program this fiscal year, has never tried to hedge its budget against the possible stoppage of funds.
"From the beginning, the funds have been an indispensable element to help finance our local government," says Comer S. Copple, the District's budget director.
Revenue sharing money in the District, which Copple describes as "a major element in our financial plan," helps pay for schools, libraries, police and fire departments environmental services and recreation.
Federal regulations require local governments to account for each program into which revenue sharing funds are funneled. Copple says this involves no great amount of papershuffling for the District. Other area jurisdictions, however, prefer to spend their money on just one program.
"We put all of ours into servicing out debt to simplify accounting," said Fairfax County Executive Leonard Whorton.
In Montgomery County, Deputy Director of Finance J.Edward Rowley says revenue sharing funds are used to support just one program - the police department - because the county wants to "keep it simple and keep it visible."
Priscilla Baker of the Office of Revenue Sharing said that part of the original purpose of revenue sharing was to provide money for local use that would be relatively free of red tape. Before the program started, Baker said, many smaller governments could not get federal aid because they could not afford to hire people to fill out the forms necessary to get the money.
Baker says now it is common for local governments to spend all their revenue sharing money on one program, enabling them to fill out a minimum of forms.
Prince George's County, which currently gets $13.2 million in revenue sharing funds, spends about $10 million for school operating costs, such as water and fuel oil, and about $3 million to cover health care benefits for county employees.
In Fairfax County, the Board of Supervisors is currently considering diverting 15 percent of its revenue sharing money for fiscal year 1979 to pay for highway construction and road improvements.
The reason for using the money for roads instead of county debts, according to Board Chairman John F.Heity, is that the state of Virginia match any count funds spent on road improvement.