A group of top major corporation executives expressed doubt yesterday that President Reagan's proposal to establish urban enterprise zones would bring about a rebirth of declining American cities or that corporate philanthropy would fill the void left by deep cutbacks in federal domestic spending.
Reagan's plan would provide special tax incentives to businesses that locate in depressed cities that have declining economies and rising unemployment.
The best hope for urban areas, the prestigious Committee for Economic Development suggested, is for business and local governments to put aside historic conflicts and mutual acrimony and form partnerships to keep existing firms, attract new ones, create jobs for the disadvantaged and improve conditions in aging neighborhoods.
"Corporations have more than money to give," the CED said in a four-year study released yesterday. "Their resources also include the company's personnel, facilities and services, reputation and leadership and business investments and operations."
The study was prepared by the CED's subcommittee on revitalizing America's cities, which includes the top officers of major insurance companies, banks, universities and several former cabinet secretaries.
They were skeptical, however, that there would be a surge in corporate giving, noting that corporate contributions to charity have remained at about 1 percent of pretax net income over the last two decades even though businesses have been able to deduct donations up to 5 percent.
The substantial reduction in corporate tax rates under Reagan's economic recovery program will actually increase the corporations' cost of giving, the study said.
The report also expressed strong reservations about the widespread tendency among faltering cities in the industrial north to give special tax breaks for businesses to induce them to locate in their cities.
It is doubtful that these incentives or the Reagan administration's only new plan for aiding troubled cities, the proposed enterprise zones, will significantly affect corporate decisions on where to locate, the study said.
The danger is that they drain off revenues needed to repair roads and bridges and improve schools, police and fire protection and other public services, and they build resentments among homeowners who do not get tax breaks, committee members said.
They urged that the enterprise zone experiments be implemented on a "limited basis" and that the results be "carefully evaluated."
Their report expressed much more enthusiasm for Reagan's initiatives to end red tape and paperwork requirements.
It urged local governments to move in that same direction as one of several steps the cities need to take to improve the "business climate."
The committee also suggested that local governments should explore the possibility of making savings in city budgets by contracting with business for some services such as snow removal, garbage pickup and road repair.
It cited projects in several cities where successful business-government partnerships had been responsible for major development projects such as Baltimore's Inner Harbor and Detroit's Renaissance Center.
It acknowledged that many of these projects got off the ground only because of an infusion of federal seed money.
The Reagan administration has cut these programs and advocated ending federal control over them. The committee, however, while expressing the belief that the federal system had become "congested, confusing and incapable of doing the job demanded of it," said it believed that some federal assistance to distressed cities should continue.
The study strongly emphasized the need for business and government to take initiatives to improve urban neighborhoods, saying that both had in the past pursued policies that had led to their decline.