Federal Law May Hobble Initiative

Last spring’s presidential summit on volunteerism turned a welcome spotlight on the marvelous work done by community volunteers in the strengthening and restoration of neighborhoods all over this country.

The summit was a reminder that federal government’s poverty programs just can’t do it all.

But, neither can volunteers. Charitable agencies struggle as it is to win not only donations but also time from a society increasingly busy with the strains of two-income households.

The issue shouldn’t be whether volunteers can replace federal funds and programs. After all, under welfare reform federal dollars continue to pay the bills; states simply being innovative in how the money’s spent.

Rather, the issue is how the government can encourage the efforts of neighborhood and charitable organizations.

Three members of Congress - J.C. Watts Jr. of Oklahoma, James Talent of Missouri and Floyd Flake of New York - have put together legislation that attempts to meet this new challenge. It’s called the American Community Renewal Act.

The act would invite 100 cities to seek designation as “renewal communities.” To those 100 communities the act would apply an array of federal mandates, tax incentives and funding opportunities. But these mandates do not seek to tie hands. Instead, they call for removal of regulations that discourage investment and innovation in troubled urban neighborhoods.

For example, “renewal communities” would be required to lower their taxes. They’d have to suspend zoning restrictions on home-based businesses that do not create a public nuisance. Commercial projects investing in troubled neighborhoods would be offered tax credits for building renovations and exemptions from capital gains taxes.

The act’s most controversial provisos would fund school vouchers so poor kids could opt for a private school if the local public school doesn’t measure up. Also, it would loosen regulations that have made it tough for faith-based programs such as drug-rehab clinics to qualify as federal contractors.

Watts and his co-sponsors justify their proposal by pointing to successful programs, including some run by black churches and inner-city entrepreneurs, that exist without the help their bill would offer.

The question, not yet answered, is whether federal funds and requirements would kill the spirit that created these success stories. Also, if Watts and his colleagues are right about the regulatory deterrents to urban redevelopment, cities don’t need a federal mandate to lighten the load of taxes and regulation. They can just do it. Can’t they?

, DataTimes The following fields overflowed: CREDIT = John Webster/For the editorial board