Impact of Antirecession Assistance on Governments Receiving Quarterly Payments of Less than $2,000

GGD-78-30: Published: Feb 22, 1978. Publicly Released: Feb 22, 1978.

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Title II of the Public Works Employment Act of 1976 provided for distributing up to $1.25 billion to state and local governments to assist those governments in maintaining basic services, thereby precluding possible tax increases which would run counter to federal efforts to stimulate the economy. The characteristics of 44 governments receiving less than $2,000 for the first two quarters varied widely: (1) populations in 1973 ranged from 273 to 11,676; (2) unemployment during the first two quarters of fiscal year 1977 ranged from 4.7 percent to 22.3 percent; (3) cumulative antirecession assistance payments as of June 1977 ranged from $454 to $6,053; and (4) the number of employees ranged from 1 part-time to 151 full-time. For most of the 44 governments, total payments were less than 1 percent of fiscal year 1976 revenues. About 150 local governments questioned or declined antirecession assistance payments. Allocations for only 2 counties out of the 44 governments reviewed were based on specific unemployment rates. All other quarterly allocations were either: (1) based on the unemployment rate for the county in which the government was located; or (2) derived from data based on the county or state unemployment rate excluding data applicable to governments with specific rates. Several governments felt that the funds were beneficial in meeting salary expenses, making needed repairs, and carrying out day-to-day operations without levying additional taxes.

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