No Money Left, President Tells County Leaders

Warning that “the public treasury is a trust, not a gift shop,” President Reagan on Monday defended his proposal to cut deeply into federal contributions to local government as a way of reducing the budget deficit and told county officials “we have no revenues to share.”

Reagan, addressing the National Assn. of Counties, combined a tough restatement of his determination to cut $50 billion from the deficit with a spirited celebration of his vision of federalism as a system in which local government sets its own agenda--but also pays most of the bills.

Group Offers Proposal

Reagan’s appeals drew some applause, but the county organization was ready with its own proposal: cut no program that helps cities, counties and states meet their own budget needs.

The group’s leadership said that its top priority is to maintain the $4.6-billion revenue-sharing program, $2 billion of which goes annually to county governments. Under the Reagan budget proposal, revenue sharing would be eliminated.

In his address, Reagan conceded that he had supported the program in the past. “General revenue sharing has served us well,” he said, but added: “The fundamental question remains, how can we afford revenue sharing when we have no revenues to share? How can the federal government justify, strapped as it is with a deficit, borrowing money to be spent by state, county and local governments, some of which are running surpluses?”

Reagan told the county officials: “I sympathize with your position on this issue--but the federal spending dollar is not magic, and it certainly isn’t free. It comes straight out of your pockets, and I just have to believe that, over the long haul, you’ll be a lot better off with the federal government’s hands out of your pockets.”

‘Need to Be Realistic’

At a news conference, Philip B. Elfstrom of Kane County, Ill., current president of the county organization, declared: “We support the Administration’s effort to reduce the budget deficit, but there is a need to be realistic. The Administration cannot do so on the backs of local governments.” Counties would have to raise local taxes if revenue sharing were eliminated, Elfstrom said.

Because revenue sharing was most recently renewed by Congress on a three-year basis, eliminating the last one of those years--as Reagan wants--would seriously disrupt many county governments whose budget planning already has been completed for that period, according to Robert Aldemyer of Kenton County, Ky., incoming president of the group.

Matthew B. Coffey, executive director of the group, disputed Reagan’s assertion that federal revenue cannot be shared when the federal budget deficit is so massive, saying that the budget has run a deficit virtually every year since revenue sharing was proposed in 1971.