The president of the U.S. Conference of Mayors accused the Reagan administration yesterday of virtually abandoning the federal government's commitment to urban America by proposing a 1986 budget that would slash grants to state and local governments by $20 billion.
"In the name of deficit reduction, this budget proposes to cut or eliminate nearly every federal investment of benefit to the cities," New Orleans Mayor Ernest N. (Dutch) Morial (D) said at a news conference here.
"Viewed another way," Morial said, "it spells the beginning of the end of the historical federal-city partnership that has contributed so much in so many ways to our economic development and vitality."
The budget President Reagan sent to Congress Monday for the fiscal year that begins Oct. 1 would eliminate funds for general revenue sharing, urban development action grants and the Economic Development Administration. Revenue sharing has become a necessary filler in many city spending packages, while the other two programs have been used to help spur urban revitalization.
The Reagan budget also proposed sharp reductions in community development block grants, job training, housing assistance, transit subsidies and wastewater treatment funds.
"These budget programs have a definitive bearing upon domestic tranquility in this nation," Morial said, and there is a "rising tide of discontent" in some increasingly impoverished urban areas.
He said the United States could be moving toward a variation of the two separate societies found by the U.S. Advisory Commission on Civil Disorders, the Kerner commission, in its study of the race riots of the 1960s.
"This time it's not going to be one black and one white," Morial said. "It's going to be one rich and one poor."
Morial said an analysis by the staff of the bipartisan mayors' group showed that, since 1981, grants to state and local governments have been cut in half, after adjusting for inflation. "Key federal programs of direct benefit to cities" have been reduced by 80 percent during the same time, without taking inflation into account, he said.
The New Orleans mayor said localities could be hurt even more by enactment of Treasury Department income tax recommendations that would eliminate the deductibility of state and local taxes and restrict some tax-exempt bonds used to finance city development projects.
Morial said cities have taken "more than a fair share" of the budget cuts of the last few years.
"We are deeply concerned about the federal deficit and and the effect it is having on the economy," he said. "But we do not believe that destroying the federal-urban partnership and ending vitally needed programs -- including those aiding low-income people -- is in the best interests of our nation."
The administration has maintained that some of the city-oriented programs are no longer feasible because of the federal government's fiscal squeeze. Moreover, administration officials have contended that many state and local governments have budget surpluses that can easily absorb the federal reductions.
But Morial said yesterday that state budget surpluses are an exception rather than a rule. Many large cities have lost their clout in the legislatures, he added, and are further pinched by voter-imposed referenda on spending and taxes.