Donald J. Borut, the National League of Cities' executive director since May 1990, has worked with urban governments for 30 years.

Before becoming the administrative head of the nation's largest public interest group representing municipalities, Borut was with the International City Management Association for 19 years, becoming deputy executive director in 1984. The association represents professional local government administrators.

Borut began his career working with city governments in 1964, as a staff assistant in the office of the city administrator in Ann Arbor, Mich. He spent seven years at Ann Arbor, rising to the post of assistant city administrator.

In 1992, Borut was elected to the National Academy of Public Administration. He is also chairman of the Academy of State and Local Government, which serves the major state and local government public interest groups in Washington.

Borut spoke with The Bond Buyer's Atlanta bureau chief, Don Yacoe, earlier this week.

Q: Press reports have characterized the recent elections as bringing in a new Congress less committed to helping cities. Does your membership have concerns this will be case?

A: Clearly, the agenda of Congress and the administration will be critical in 1995. We are encouraged by the resolve of the Republican leadership to bar unfunded mandates to local governments. We understand that this will be the first bill introduced in the Senate. We also understand that the balanced budget amendment proposal will include a ban on unfunded federal mandates.

In terms of concerns, near the top of the list is full funding of the crime bill. Carolyn Long Banks [a city council member from Atlanta], our incoming president, has identified public safety and violence as her primary concern.

Public safety is not a law enforcement action alone; it also has to connect with other institutions in our communities. We must promote and identify institutions that are working, and nourish them. Community policing is very important. We have to create information sharing for law enforcement. All this requires funding.

Q: You mention the balanced budget amendment. Is it inevitable that this would lead to less funding for cities, particularly in the area of infrastructure?

A: The balanced budget amendment proposal is a train that is moving, and I don't think that's a bad thing. Reducing the deficit is good for everybody. It helps reduce interest rates, and gives government more credibility.

But the issue then becomes: If you mandate a balanced budget, provide a capital gains cut, increase defense, provide a middle class tax cut -- where is money going to come from for other programs? What we want to do is make sure domestic programs are on the table along with these other items, that a case is being made for programs important to cities.

And there are other things that can be done to help cities that don't necessarily directly involve the budget.

Q: Could you elaborate?

A: You can't assume that if the federal government takes a general action, it will affect regions equally.

The bottom line is that there are economic regions, and actions taken will have a different effect in different parts of the country.

One way to help deal with this is to develop programs that recognize different economic regions. This would at the very least encourage regional cooperation and reduce intra-regional disparities.

One area that might be revisited is the Metropolitan Trust Fund Initiative we submitted in 1992 that proposes federal two-year matching grants to metropolitan economic regions for formulating long-range economic development plans and federal support for implementation of those plans.

We could also develop economic indicators from the local regions to help identify areas in the country that have become vulnerable to downturns in the economy and then take appropriate action.

In addition, we should seek more consultation between the federal administration and local governments on economic policy, including an annual President's Summit on Local Economies.

In all of this, the federal government should encourage regional cooperation among local economies, while recognizing their disparities.

The idea is to work towards a common market of local economies. Earlier this year, we submitted a concept paper indicating some approaches we'd like to take on issue of local economies. We had a meeting with Robert Rubin [head of President Clinton's National Economic Council! in July and are having a meeting with him this week to identify some approaches to this issue.

Q: What ideas have been discussed so far, particularly as they relate to municipal finance?

A: In the area of municipal finance we would like to widen the deductibility for bank holdings of municipal bonds. [Under current law banks are allowed to deduct 80% of the cost of purchasing and carrying tax-exempts only if they are governmental bonds purchased from an issuer who expects to sell no more than $10 million annually!.

For example, the federal government might waive some of the requirements if a bank has a superior CRA [Community Reinvestment Act] rating. This could provide opportunities for funding of infrastructure projects.

Q: The Securities and Exchange Commission has recently passed new rules requiring increased disclosure of information from issuers of local government bonds. What are your thoughts on this?

A: There should be investor access to information affecting bonds. But anything that is going constrain or limit cities' ability to market bonds is something we are going to look closely at.

Q: The new Congress also seems committed to far-reaching reform of welfare programs. And there continues to be change in health care policy, particularly as it affects Medicaid programs. What are cities' concerns in these areas?

A: I don't think there is any disagreement with the premise that we want to move folks from welfare to jobs.

But government must help make sure jobs are available. What happens when welfare stops and there is no private-sector support?

As for the health care area, when you talk about changing the health care system, at the very least municipalities as employers need to be taken into account.

Q: What might be some priorities for cities in 1995 that haven't been recognized as such in past years?

A: One area that has recently become quite significant for cities is telecommunications. We are concerned that, with the current emphasis on reducing regulation, the role of local government in the establishment of communications networks might be reduced. This could affect local government channels and public interest programs.

Cities are also working with the private sector to enhance their telecommunications. For example, a number of communities are putting in their own fiber-optic loops and digital switches. This should be encouraged.

Another area that is becoming more important is the preemption of local authority by the federal government. In particular, we are concerned that recent court actions interpreting federal law could limit cities' powers, including the power to regulate.

Q: The 103d Congress got bogged down in a number of areas of interest to local governments and was unable to pass legislation affecting the nation's water supplies, national highways, and airports. Does this pose problems for cities?

A: These bills are very important and we hope action is taken on them soon.

Q: Given all the challenges facing cities, is your organization working with other public-interest groups to lobby Congress and the administration on shared concerns?

A: Absolutely. We are putting a great deal of effort into identifying shared interests with other groups. So far this has involved bringing together our principals with other groups' principals. Over the last year we've had wonderful cooperation, particularly around issues of unfunded mandates or environmental issues.

Q: Has the National League of Cities taken specific steps to reach out to the new Republican leadership in Congress?

A: We would like to work with the new leadership and point out to them some of the concerns and priorities of urban governments.

In many instances, there are people moving into positions that they have not held before. These people will be open to examining different options.

A key will be finding areas of common ground, such as legislation to end unfunded mandates -- and working from there.

As for reaching out, we have extended an invitation to Sen. [Robert] Dole [the expected Senate majority leader] to speak at our federal legislative meeting in March. We are also working through Carolyn Long Banks and the Georgia Municipal Association to set up a meeting with Rep. [Newt] Gingrich [expected to be named speaker of the House].

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