NLC: Jobs creation must focus on local government

The National League of Cities (NLC) yesterday sent letters to President Obama and Congressional leadership, calling for the federal government to do more in local jobs creation. The local government advocacy group says that the economic recession is likely to grow more severe, putting added strain on local and city government budgets.

The letter outlined four key strategies designed to help local and city government avoid a prolonged economic recovery, even after some segments of the economy emerge from the recession. Included in NLC’s requests are calls for direct assistance to local governments to help save public sector jobs, workforce funding to jobless residence through community improvement projects, and targeted infrastructure spending to get money into local communities quickly. The forth strategy called for increased access to credit for cities and small businesses.

NLC President and mayor of Riverside, California, Ronald Loveridge reminded federal leaders that local governments were struggling to maintain service requirements while dealing with persistent budget falls and underperforming revenue streams. He warned that by ignoring the local government issues, prolonged fiscal crisis at the national level would surely result.

“In the absence of additional federal intervention, a deepening local fiscal crisis could hobble the nation’s incipient recovery with more layoffs, furloughs, canceled infrastructure projects and reduced services,” Loveridge wrote in the letter.

According to a report by Reuters, state governments face a $144 billion budget gap this year, supported by nearly $150 billion in federal aid passed in February. Possible elements of President Obama’s jobs package is likely to include money for those items listed by NLC, as well as money for building weatherization, extending unemployment insurance, as well as tax breaks for job creation.

The Reuters factbox report says that the White House and Congressional lawmakers are looking towards the Troubled Assets Relief Program, which currently has $70 billion in unused funds, to help with any new jobs initiative. And some officials are looking to use TARP repayments to create jobs, though previously they committed to use the funds to cut the deficit.

To view the full text of the letter, click here (.pdf).