Mayors hope if one federal hand takes, another will give

The Reagan administration and the nation's big cities appear to be heading in opposite directions on the issue of federal urban aid -- but the gap that results may not be as wide as at first suspected.

Clearly, the centerpiece of the "urban message" that emerged from a meeting of a dozen of the nation's big-city mayors with President Reagan at the White House Feb. 3 was that cities must do more with less.

But despite the news revealed at this meeting, and from other sources, that major segments of federal urban aid programs may be shredded by budget-cutting proposals, the mayors took the news with a minimum of rhetoric and doom-saying.

Part of their generally mild reaction was out of courtesy to a new president. But much deeper than this was the optimistic hope of many of them that what Mr. Reagan "is taking with one hand, he will give with the other," says Randy Arndt of the National League of Cities.

"Obviously, there are going to be some strong protests and anger," Mr. Arndt, a leading expert on federal funding for urban areas, continued. And there no doubt will be, he says, the normal jockeying for specific programs that goes on during the course of any administration.

New York City Mayor Edward I. Koch, one of the mayors who met with the President, already has declared that likely urban aid cuts will be "painful."

However, Mayor Koch and Arndt, along with urban analysts, see a number of issues to be cautiously optimistic about:

* Mr. Reagan's proposed taxes cuts to businesses and individuals, if enacted, may in turn spur local tax revenues.

* The President intends to give state and local governments more of a say in developing and running federally funded local programs.

* Although some of the cuts will be substantial, more cities became accustomed to belt-tightening under the Carter Administration, which promised a lot of urban aid that never materialized.

Recent interviews with Reagan administration spokesmen, public statements by mayors, and published accounts, however, indicate changes do lie ahead for existing urban aid programs.

The Urban Development Action Grant (UDAG) program will either be reduced or incorporated, probably on a smaller scale, into other federal grant programs that do not have to be used for specific purposes.

UDAG was a major plank in former President Carter's urban policy, dispensing development. On Feb. 3, Housing and Urban Development Secretary Samuel Pierce told the mayors that UDAG is a prime target for elimination or substantial reduction.

Yet when the mayors told Mr. Pierce how effective UDAG had been, he promised to take their comments into consideration in deciding the program's final fate. Reagan administration sources told the Monitor that Pierce had not made up his mind about eliminating UDAG when he talked to the mayors. If he finds the program was effective, these sources say, he will keep parts of it or recommend using some of its funds elsewhere.

The Comprehensive Employment and Training Act (CETA), which funds public service jobs in many cities, may not fare as well. The Chicago Sun-Times has reported that the Reagan administration is planning to phase out some 350,000 public service jobs by first imposing a freeze on them in fiscal 1981 and then eliminating them the following year.

The loss of public service jobs would be a big blow to many cities. Chicago, for example, has 6,300 public service employees funded through $88 million in CETA and UDAG money. Mayor Jane Byrne was busy Feb. 4 preparing a public statement that would decry cuts in this area. But at the same time, there is a growing recognition among other big-city mayors that "make work" temporary public service jobs are not the answer to either unemployment or understaffed city services.

The mayors also support a Reagan administration proposal, recommended by the Office of Management and Budget (OMB), to coordinate all federal mandates to cities to avoid inconsistent or conflicting instructions and regulations.

Alan Beals, executive director of the National League of Cities, recently applauded the proposal in a letter to the OMB.