A Reagan administration proposal to abolish the $4.6 billion general revenue sharing program was assailed yesterday by the National Association of Counties, which said local taxes would have to be raised to offset the loss of the federal money.
The group, which represents 2,100 counties, said at a press conference that the proposed reduction could significantly harm public works projects, police and fire services and health programs.
The organization and its member counties also called for a freeze in the federal fiscal 1986 budget in an effort to reduce the federal deficit by $50 billion. But such a freeze, the group said, should not be achieved by eliminating revenue sharing or by reducing the federal contribution to Medicaid and community development block grant programs.
Officials from Prince George's and Montgomery counties, which have used revenue sharing to pay school utility bills, joined the protest.
John Wesley White, chief administrative officer for Prince George's County, said in a letter to the association's executive director, Matthew B. Coffey, that his county would lose $11.8 million annually, which he said could add 16 1/2 cents per $100 of assessed valuation to the property tax rate.
Montgomery County Executive Charles W. Gilchrist said the loss of the $9 million in revenue sharing funds his jurisdiction received this fiscal year would "very likely" mean an equivalent tax increase. The loss, he said, would come at a time "when we're already spread pretty thin."
Coffey said that according to a recent poll by the National Association of Counties, 54 percent of counties surveyed said general revenue sharing funds are spent on public works. Other major uses for the funds are public safety, cited by 34 percent of the counties surveyed, and health, cited by 24 percent.
The loss of those funds, he said, would place greater pressure on financially strapped local governments still functioning under tax rollback initiatives such as Prince George's County's TRIM, Tax Reform Initiative by Marylanders.
"Changes in federal tax expenditures or efforts to raise revenue should not preempt the tax and financing capacity of local government," the association said in its statement.
Earl M. Baker, chairman of the Chester County, Pa., Board of Commissioners, said that the revenue sharing allocations become especially important for local governments because other domestic programs are on the deficit-reduction chopping block as well.
Prince George's County's White said that the loss of revenue sharing coupled with Treasury Secretary Donald T. Regan's tax simplification plan to remove local taxes as a deductible item on the federal tax return could result in a "hidden double taxation situation."
"To exacerbate the tax cost through higher local taxes prompted by the loss of general revenue sharing would be unconscionable," he said.
At least one local government, the Shelby County, Tenn., Board of Commissioners, has recommended that the reauthorization of general revenue sharing be financed by a reduction in defense appropriations.
"In general, we think that defense ought not to be a draft dodger in this battle," said Jim Rout, chairman of the Tennessee panel.