League of Cities on Reagan cuts: small towns, Sunbelt faring better

Not all cities are feeling the pinch of the Washington budget cuts to the same degree. Officials of some smaller towns and growing Sunbelt cities gathered here for the National League of Cities (NLC) 1981 congress, say they have felt little impact so far.

James McCrae, a city commissioner in Ottawa, Kan., a city of 12,000 with a $ 10 million a year budget, says even the Reagan administration's proposed additional 12 percent cut won't affect his city that much.

''We don't really have anything we're that dependent on the federal government for,'' observes Oatman Gerald, a city commissioner from North Charlston, S.C., who says his city has tried to wean itself from heavy reliance on Washington.

Officials of cities that are feeling the crunch - virtually all large cities and cities of any size in the frost belt - insist they often get it from all sides.

Mayor-elect Terry McHane of Lansing, Mich., for instance, says all three pillars of his city's economic foundation - Michigan State University, state government, and the auto industry - are shaky. All have had layoffs, he says, and the city, which expects a $3 million to $4 million shortfall this year in its $50 million annual budget, may be next.

Despite this kind of variance, all of the close to 3,000 delegates assembled here agree that there has been a dramatic shift in Washington's policy toward the nation's cities, a shift that leaves them with more responsibilities than they had before.

And even in such a diverse group as the NLC, generally considered more conservative than the US Conference of Mayors, which limits membership to cities of 30,000 or more, there is widespread support for general revenue sharing and for a more equitable distribution of the cuts.

''Indirectly, the cuts are going to hurt us a lot in such areas as health care, nutrition, and day care that we as local governments have no direct control over but where residents feel they can put a hand on us because we're their elected officials,'' says Michael Hightower, a city council member in College Park, Ga. ''I just feel there should be greater concern for human needs in Washington.''

President Reagan's proposed cuts in the nation's $4.6 billion revenue-sharing program, now expected to be about 3 to 5 percent, is likely to hit cities using it for operations costs, such as police and fire services, especially hard.

President Reagan, who earlier had vowed to phase out revenue sharing altogether by fiscal 1984, now says he will not do so until he has a good substitute for it.

A group of mayors, including NLC president William Hudnut who met with the President about city problems a few weeks ago, stressed that they felt revenue sharing, which is based not only on a city's population but on its tax base, is one of the fairest mechanisms for dispersing federal dollars.

Some city leaders surmise that Mr. Reagan hopes eventually to do away with all federal funding to states and cities, and they may have to do some fast talking and skillful planning if they hope to divert him from that aim.