By Larry Jones

Census Bureau Chief Kenneth Prewitt told mayors attending the Urban Economic Policy Committee meeting on January 26 that the Bureau “believes its operations are in place and on schedule and on budget,” as it approaches the April target date when census takers will span out across the nation to count people for the 2000 decennial census. He said some 520 local offices have been opened, equipped and fully staffed to ensure that the biggest peace-time mobilization of government workers starts on time.

To conduct the census, Prewitt said the Bureau will focus on three population groups. A very small group of people, about one and a half percent, who reside in very remote areas such as Alaska, the Grand Canyon and the Adirondacks. Because it’s so costly, census enumerators will deliver the census questionnaire and count these people all at once. The next group of people are those living in rural areas who do not get their mail delivered to where they live, but receive it from a local post office or some other mechanism. This group accounts for approximately 20 percent of the population. To count them, the Bureau will hire enumerators to take the questionnaires out to where they live. The last group is the largest and account for about 80 percent of the population. They mostly live in cities. These people will receive the census questionnaire by mail.

Prewitt explained that in the past there has been a problem getting the most populous group to mail the questionnaires back. He said in the 1980 census, the response rate was 75 percent and in 1990 it dropped to 65 percent. Under this model, he said the response rate for the 2000 census is expected to drop to 60 percent. To reverse this trend, the Bureau is using paid advertising, promotions, partnerships with stakeholders, and complete count committees in local areas to help improve the response rate. The Bureau is also promoting a new initiative called “How America Knows What America Needs,” which will encourage grassroots participation in Census 2000 in 39,000 jurisdictions including every town, city, county, state and tribal area in the nation.

The first component of the program, called ’90 Plus Five, challenges local communities to increase their mail response rates in Census 2000 by at least 5 percentage points over the 1990 response rate. For example, Prewitt said if your city’s 1990 mail response rate was 55 or 60 percent you would have to increase it to 60 or 65 percent. He said by now every mayor should have received a letter from him identifying the city’s response rate in the last census. The letter also notified mayors that the questionnaires will be mailed out to most households between March 15 and march 20. And starting March 27, the Bureau will tell each mayor what his/her city’s response rate is on a daily basis through April 11. Prewitt said this information will be widely covered in the press.

The second component of the program, called “Because You Count,” encourages public cooperation with enumerators. This program will target both households that do not return their census forms by mail and those in rural areas where questionnaires have to be delivered. Prewitt urged mayors to take an active role in encouraging everyone in their communities to fill out and return the census forms and be counted in Census 2000.

Following Prewitt’s presentation, Washington, D.C. Mayor Anthony Williams offered a resolution for the committees consideration urging simplification of state and local sales taxes for electronic commerce and remote sales. As chair of the Conference Task Force on Electronic Commerce and Internet Technology, Williams explained that he and members of the Task Force had been appointed to examine how state and local sales taxes are being affected by electronic commerce and remote sales.

Williams explained that state and local governments are currently unable to collect sales and use taxes on remote sales. The reason is due to two Supreme Court decisions (National Bellas Hess, Inc. v Illinois, 87 S. Ct. 1389 (1967) and Quill Corp. v. North Dakota, 112 S. Ct 1904 (1992), which prevent state and local governments from imposing a duty on remote sellers (or out-of- state merchants) to collect their taxes. Mayor Williams told committee members that this problem has disrupted the level playing field among local retail outlets and out-of-state merchants and left local retail outlets in a competitive disadvantage, since they are required to collect sales taxes and out-of-state merchants are not. And he explained that state and local governments will lose an estimated $11 billion in sales and use tax revenues by 2003. This loss will grow exponentially in the out years as electronic commerce and remote sales continue to grow faster than anyone can predict.

To address this problem, Williams said the resolution urges support for a proposal that calls on state and local governments to work together to simplify sales and use taxes so they can be easily applied to electronic commerce and remote sales. Under the simplification proposal, out-of-state merchants would be relieved from the burdens of figuring out the state and local sales taxes, collecting and remitting those taxes, multiple audits and reporting requirements. A new “Trusted Third Party” system would be created to perform these duties for state and local governments under contractual arrangements. Participation in the new system would be strictly voluntary with built in incentives for states and out-of-states merchants to participate in a multi-state arrangement that would ensure the collection of taxes on remote sales. After Mayor Williams presentation, Detroit Mayor Dennis Archer moved the adoption of the resolution and it was seconded by Madison Mayor Susan Bauman and approved by unanimous vote.

Neal Osten from the National Conference of State Legislatures told mayors that his group had drafted model legislation for states to use in crafting their own legislation that must be approved in order to participate in the multi-state arrangement which will enable them to collect sales taxes on remote sales. He said NCSL is looking to get 8 to 10 states to adopt legislation by the end of the year so that states can begin operating under the new system by mid 2001. Osten told mayors that the South Dakota Legislature is on the verge of passing legislation to allow the state to participate and it appears that Michigan, Utah, Ohio, Tennessee, Maryland, North Dakota, North Carolina, Wisconsin and Idaho are close to moving similar legislation. As states adopt this legislation, Osten said NCSL hopes it will send a message to both the Advisory Commission on Electronic Commerce (ACEC) and to Congress that state and local governments are moving to fix our own problem and that it doesn’t need any Congressional activity right now.

Mayor Kirk is the only mayor named to the 19-member ACEC, the congressional commission created to examine the impact of state and local sales taxes on electronic commerce and come up with recommendations as to whether or not such taxes should be applied to electronic commerce and remote sales. Kirk told mayors “you need to make sure if you have a chance to talk about the issue or do op-ed pieces, that you approach it form the stand point that we’re not out to add any new taxes. For us this is an issue of nondiscrimination in terms of application of sales taxes.” The Conference believes sales taxes should be applied to all commerce in an equitable manner. Kirk mentioned that public opinion is moving in our favor. He cited a recent poll conducted by USA Today which found that 65 percent of Americans felt that goods sold over the Internet should be treated the same as goods sold on Main Street.

Michael Barr, Deputy Assistant Secretary of the U.S. Department of Treasury told mayors that President Clinton would be pushing for the approval of the New Market Tax Credits legislation this year. Under the legislation, he said individuals would receive a tax credit worth 25 percent of their investment in financial institutions that serve distressed communities. These institutions would use this capital to make loans to companies that locate or expand in these communities. He also said the Administration has been discussing this legislation with House Speaker J. Dennis Hastert (IL) as well as Senator Kay Bailey Hutchinson (TX), who is sponsoring a similar Commercial Revitalization Tax Credit proposal supported by the Conference, and they want to work together to pass a consensus bill. Barr also mentioned that the Administration would be seeking to expand the number of Empowerment Zones and community development financial institutions to spur private sector growth in poor neighborhoods.