State and local officials said yesterday that they have seen the future of the New Federalism and they think they are getting a raw deal.
The White House has been trying to sell local leaders for weeks on President Reagan's plan to fold two dozen domestic spending programs into block grants, in part by promising that the programs would not be cut for five years. But there was a catch: spending would be frozen at fiscal 1984 levels, which were not made public until Monday.
When local officials finished poring over the fine print yesterday they cried foul.
"This would not be a very good base year to use for any program under New Federalism," said John J. Gunther, executive director of the U.S. Conference of Mayors. He said cities already are being shortchanged by existing block grants to the states, and that overall federal aid to localities has been cut 20 percent in constant dollars since 1980.
"What the administration calls a freeze in spending actually translates into major cuts in programs to help cities and city residents in need," Gunther said.
The National Conference of State Legislatures was equally unenthusiastic. "The federal government would be abandoning its responsibility to the nation's needy with these proposed reductions in welfare-related programs," said Conference President William Passannanate. "State legislators cannot support the plan to shift these costs to the states."
White House officials, however, say their plan would protect states and cities against further cutbacks while giving them greater discretion in spending the money.
An analysis by the mayors' conference detailed 18 programs that Reagan proposes to reduce or eliminate. For example, the Environmental Protection Agency's grants to help state and local governments meet pollution standards would be cut by more than a quarter to $173 million.
Noting that many of the air and water pollution rules were imposed by Washington, Gunther said, "Don't mandate something you're not going to pay for."
The Reagan budget also would reduce existing housing subsidies by a third, limit housing aid for new families and raise rents for poor tenants by counting their food stamps as income, the group said. In addition, Reagan would eliminate a popular loan program for housing rehabilitation.
Congress repeatedly has rejected Reagan's effort to eliminate some programs, such as the Economic Development Administration (EDA), Legal Services Corp., urban parks program and historic preservation grants, Gunther observed.
Other new proposals include a 68 percent cut in transit operating subsidies, eliminating most direct loans by the Small Business Administration, abolishing a juvenile justice program and cutting back on vocational education, energy assistance and nutrition programs.
Separately, the Northeast-Midwest coalition in Congress said that Reagan's budget strongly favors the southern and western states. Coalition members say the 18 states in their region are particularily dependent on some of the programs that are scheduled to be cut the most. They receive 65 percent of the urban development action grants, 54 percent of EDA grants and 57 percent of transit operating aid.
"The budget is seriously tilted away from older and industrial areas," said Rep. Stewart B. McKinney (R-Conn.), a coalition spokesman. "It's a budget with the wrong priorities."
But a spokesman for the congressional Sunbelt Council insisted that "if anything, the budget is tilted the other way."