Statement Announcing Participation of 20 Cities in the New Planned Variation Program

TODAY I am announcing the selection of 20 cities to participate in Planned Variation-an intensive effort to demonstrate what local government can accomplish in solving urban problems when given greater freedom from Federal regulations. The cities are:

1. Butte, Mont.

2. Dayton, Ohio

3. Des Moines, Iowa

4. East St. Louis, Ill.

5. Erie, Pa.

6. Fresno, Calif.

7. Indianapolis, Ind.

8. Lansing, Mich.

9. Newark, N.J.

10. Norfolk, Va.

11. Paterson, N.J.

12. Seattle, Wash.

13. Tampa, Fla.

14. Tucson, Ariz.

15. Winston-Salem, N.C.

16. Waco, Tex.

17. Houston, Tex.

18. Rochester, N.Y.

19. San Jose, Calif.

20. Wilmington, Del.

In my March 5, 1971, message to the Congress proposing a system of special revenue sharing for urban community development, I noted that too often State and local officials are hemmed in and restricted by the burdensome requirements and regulations of Federal grant-in-aid programs. They are sometimes treated like children, given an allowance, told precisely how to spend it, and then scolded for not being self-reliant enough to handle more responsibility. I am firmly convinced that the way to develop greater responsibility at the State and local level is to give greater responsibility to State and local officials. The Administration has developed the new Planned Variation program as a way to convert a portion of present Model Cities grants into a test of what can be accomplished under the revenue sharing approach to intergovernmental relations.

The basic purpose of Planned Variation is substantially to improve the operation of the Federal grant system under existing legislation. The Administration's revenue sharing proposals, now pending before the Congress, would accomplish needed basic changes in this system. While these proposals are under consideration, however, we are continuing to make improvements, reducing delays and red tape in the present system. Along with these efforts we are endeavoring to reduce the extent to which Federal officials are in a position to "second-guess" the decisions and priorities of local elected officials.

The Planned Variation program consists of three central features:

First, all 20 cities will receive funds to build up the planning and management capacity of the local chief executive. These funds will strengthen the chief executive in his role of managing local government. They will be used--with the help of local citizen advisory groups--to identify the priority needs of the community and to develop a local comprehensive plan, which includes a strategy for resource allocations to meet priority needs and which assures that both Federal and local funds are used effectively in concert with this plan. In this respect, the Planned Variation program offers us a chance to test another of this Administration's reform proposals-the new Planning and Management program, announced in conjunction with the urban community development special revenue sharing proposal. This new program would provide assistance on a general basis for improving the management capacity of State and local governments.

Second, the Department of Housing and Urban Development will set aside additional program funds for the first 16 of the 20 cities listed above so that their plans can be carried out on a citywide basis. These 16 cities will be able to use their "supplemental" funds to address priority needs which they themselves have identified and which cannot be met through other Federal, State, and local funding sources.

Third, along with increased program funding for these 16 cities will go greater discretion in the use of the funds. In addition, there will be significantly less oversight and review of details for all 20 of the Planned Variation cities. This is a logical outgrowth of the basic principle of revenue sharing. It also accords with the effort to build up the planning and management capacity of local chief executives, so that they can more effectively use the discretion which we are making available to them under this new approach.

In sum, this new approach---a significant variation in terms of intergovernmental relations--involves a combination of assistance to provide increased managerial capacity, increased funding, and increased flexibility in the use of Federal funds.

The Planned Variation program represents a major broadening of the scope and nature of the Model Cities program. The Administration also views Planned Variation as an important beginning step in the process of returning authority to local government. We will carefully evaluate the results. It does not replace other Federal programs. Communities now participating in the Model Cities program, but not selected to participate in Planned Variation, will still continue under present arrangements to receive Model Cities funds.

Finally, I want to emphasize that the cities selected to participate in Planned Variation are not the only ones which will eventually benefit from the program. For it is a test of new approaches. I believe this test of the basic revenue sharing idea will demonstrate, in a way which words cannot do, the validity of the principle that when local governments are given the opportunity and the resources, they can and will manage their affairs effectively and in a way which is responsive to the needs of all of their citizens.