Urban emphasis

IT has always been one of the great anomalies about the United States that a society that spends so much of its financial resources on housing -- from soaring rents and sky-high mortgages to expensive outlays for furnishings, lawns, and other home-related projects -- does not have a national policy aimed at preserving and bettering its cities. Yet, a substantial portion of the nation's housing stock is located in or near most of the nation's largest cities. Moreover, whether dwellings are located within cities or not, the cities provide the trellis -- the backdrop of commerce, jobs, offices, and cultural attractions -- that links together the hundreds of thousands of neighborhoods and communities that make up the United States.

Precisely for these reasons, the nation's political and economic leadership -- as well as the public in general -- needs to think creatively about its cities.

To a degree, innovative thinking has begun. Many cities, for example, now seek direct financial investment from abroad as one way to offset the loss of industries to suburbs. Still, far too many cities continue to face difficult economic challenges resulting from the flight of largely white middle-class and professional families to the suburbs. Left behind are great concentrations of the poor and minorities, and a dwindling tax base.

Increasingly, industries also exit to suburban areas. Sharp cutbacks in federal funds to cities and states the past four years have added to the fiscal woes of some communities.

It is hardly surprising, therefore, that city officials meeting in Washington recently for the midwinter conference of the United States Conference of Mayors were lamenting another anticipated round of cutbacks in federal aid to states and cities. The mayors argue that further reduction in federal financial assistance to states and local communities, as part of a federal budget freeze for fiscal year 1986, could squeeze the cities severely.

Moreover, many city officials wonder whether the Reagan administration is basically hostile to cities; they note, for example, administration proposals to curb the tax-exempt status of municipal revenue bonds, to end local revenue sharing, and to restrict federal tax deductions for state and local income taxes.

The states generally are now posting record budget surpluses. In a number of states, such as New York, California, Minnesota, Michigan, Wisconsin, Ohio, and Massachusetts, governors are proposing or considering cuts in state income tax rates because of momentary state fiscal surpluses. Similar surpluses are being posted in many cities, where the economy's improvement over the past year has stepped up tax receipts.

Caution is in order when reviewing the moment's black ink in state and local ledgers. Congress and the White House are contemplating reductions in federal aid for city-related programs. Most states and cities have balanced-budget requirements. Unlike the federal government, these units are not allowed to operate in red ink.

Moreover, many of the surpluses being recorded by local jurisdictions may prove short lived: Constituents are calling for the restoration or expansion of services eliminated or cut during the severe economic downturn of 1981-82. Local roadways, transportation facilities, and other vital services are in need of modernization. Anyone who has taken New York's subway system during the past year can immediately recognize the pent-up demand for spending of services.

Granted, many cities should be able to call for additional financial help from states during the next year or so, thanks to the improved state income flow on top of a lower state spending base.

But that should not be taken by Washington as an excuse to gut aid programs directed at cities and local communities. Throughout history, a hallmark of great nations has been public support directed at preserving cities. Most of the great cities of Europe today, with landmarks that in some cases date back centuries, reflect such a far-seeing national emphasis.

Washington should remember the wisdom of urban investment as it goes about the sensitive task of cutting the federal budget to reduce deficits. Housing neglect is but one indicator of trends that should be reversed. America's cities warrant preservation and modernization.