Impact of Antirecession Assistance on 16 County Governments

The Public Works Employment Act of 1976 established a program to provide State and local governments with antirecession assistance payments. It was designed as a means for strengthening the Federal Government's ability to stabilize the national economy by promoting greater coordination, during times of economic downturn, between national economic policy and budgetary actions of State and local governments. Initially Congress authorized $1.25 billion to be paid State and local governments for the five quarters ending September 30, 1977, and then renewed the program for an additional year. As of April 7, 1977, $1.18 billion was paid to recipient governments.

There was little evidence that the recession severely affected the budgets of 16 selected county governments. The interchangeable nature of moneys, shifting priorities and needs, changing revenue amounts from various sources, and the relatively small contribution antirecession payments made to the counties' resources impaired analysis of the program's actual effect on county budgets. However, the following effects were noted: (1) three counties' revenue collections were falling short of meeting expenditures, and antirecession funds helped balance the budgets and possibly avoided counterproductive steps; (2) five countries were collecting sufficient revenues to meet budgeted expenses and used antirecession funds to maintain or augment surpluses; and (3) six counties were collecting enough revenues to meet budgeted expenditures, and antirecession funds were used to increase authorized expenditure levels. Most counties appropriating antirecession funds reported using this assistance for salaries. However, assistance payments were substituted for other revenues that normally funded the positions.