The time has now come in America to reverse the flow of power and resources from the States and communities to Washington, and start power and resources flowing back from Washington to the States and communities and, more important, to the people all across America.
The time has come for a new partnership between the Federal Government and the States and localities--a partnership in which we entrust the States and localities with a larger share of the Nation's responsibilities, and in which we share our Federal revenues with them so that they can meet those responsibilities.
To achieve this goal, I propose to the Congress tonight that we enact a plan of revenue sharing historic in scope and bold in concept.
All across America today, States and cities are confronted with a financial crisis. Some have already been cutting back on essential services---for example, just recently San Diego and Cleveland cut back on trash collections. Most are caught between the prospects of bankruptcy on the one hand and adding to an already crushing tax burden on the other.
As one indication of the rising costs of local government, I discovered the other day that my home town of Whittier, California--which has a population of 67,000--has a larger budget for 1971 than the entire Federal budget was in 1791.
Now the time has come to take a new direction, and once again to introduce a new and more creative balance to our approach to government.
So let us put the money where the needs are. And let us put the power to spend it where the people are.
I propose that the Congress make a $16 billion investment in renewing State and local government. Five billion dollars of this will be in new and unrestricted funds to be used as the States and localities see fit. The other $11 billion will be provided by allocating $1 billion of new funds and converting one-third of the money going to the present narrow-purpose aid programs into Federal revenue sharing funds for six broad purposes--for urban development, rural development, education, transportation, job training, and law enforcement--but with the States and localities making their own decisions on how it should be spent within each category.
For the next fiscal year, this would increase total Federal aid to the States and localities more than 25 percent over the present level.
The revenue sharing proposals I send to the Congress will include the safeguards against discrimination that accompany all other Federal funds allocated to the States. Neither the President nor the Congress nor the conscience of this Nation can permit money which comes from all the people to be used in a way which discriminates against some of the people.