Blog for Rural America

The Center for Rural Affairs, a private, non-profit organization, is working to strengthen small businesses, family farms and ranches, and rural communities. Permission to reprint items from this web log is hereby granted, on the condition that clear credit is given to the original source of the material. If the blog provides information for a story, please let us know by sending an email to johnc@cfra.org.

Friday, February 18, 2005

Center for Rural Affairs Crunches the Budget Numbers

-- from the desk of Jon Bailey, Director, Rural Research and Analysis Program
Center for Rural Affairs

Rural Development and Rural Asset-Building Programs
President Bush’s FY 2006 Budget

ANALYSIS

> Less Rural Economic and Community Development

Rural America will lose more than one-third of its federal resources for rural economic and community development. The proposed new “Strengthening America’s Communities Initiative” would consolidate 18 economic and community development programs into one and provide one-third less funding (from $5.61 billion in FY05 for the 18 programs to $3.71 billion proposed in FY06 for the new initiative).

Extrapolating to the new initiative the 29.7 percent non-entitlement community share of the FY05 Community Development Block Grant (CDBG) program, rural America stands to lose at least one-third of its federal economic and community development resources in the new initiative through the elimination of the CDBG program and other rural development programs (and significant spending cuts in other community and economic development programs).

The result would be 1) a shifting of rural economic and community development costs to state and local resources, including an increased property tax burden in many places, and/or 2) rural communities left without the resources for vital projects modernizing their infrastructure, developing their economies for the 21st century, and enhancing their quality-of-life.

The ultimate impact of the President’s FY06 budget proposal is to make rural communities less attractive places to live with fewer economic opportunities and potentially higher taxes.

> Fewer Jobs and Businesses

The President’s budget proposes to eliminate programs that create jobs and businesses for rural America. The Small Business Administration programs that provide capital and technical assistance for microbusinesses are a major source of businesses and jobs in rural communities. Nearly 17 percent of all private, non-farm jobs in the United States come from microenterprise, and over one in five private, non-farm jobs are attributable to microenterprises in the most rural states in the nation.

In addition, several of the economic and community development programs being targeted for elimination or significant cuts create business and job opportunities in rural America (the Rural Business Enterprise Grant program, the Rural Business Opportunity Grant program, the Economic Development Administration, and the Resource Conservation and Development program, for example).
The President’s budget would result in fewer resources and fewer opportunities to create jobs and businesses in rural communities.

> Less Participatory Community Development in Rural America

One hallmark of the CDBG program was the requirement for public hearings and public input on community and economic development projects for which funding was sought. That may be lost under the proposed “Strengthening America’s Communities Initiative,” which would provide funding only to communities meeting specified criteria with no apparent requirement for public involvement. One such measure is unemployment, which would hurt many rural areas that have low unemployment rates but high rates of multiple jobholding, high poverty rates and low income.

Programs such as the Resource Conservation and Development program (with half its funding proposed for elimination) also directly involves communities and community members in community and economic development projects, with community members participating in governing boards and project committees.

The proposed budget also seeks to eliminate programs such as the Northern Great Plains Regional Authority, planning grants from the Economic Development Administration and the Rural Strategic Investment Program based on a community participation model that many are recommending as a democratic method for rural development on both the community and regional level.

> Less Asset-building in Rural Communities

The President’s budget provides for greater resources for several rural housing programs within USDA, particularly loan programs. However, what the budget gives with one hand, it takes with the other – it proposes to eliminate other rural housing programs and programs that provide resources for rural community-based organizations that develop and construct housing.

As discussed above, the budget also decreases opportunities for rural people – particularly low- and moderate-income rural residents – to own their own businesses and provide jobs. Asset-building – those investments in one’s life or family that will serve to build long-term wealth – is an important strategy for the future of rural America.

Assets like businesses and houses bond one to a place and help to build strong, more sustainable communities. Commitment to a place is what makes asset-building development an important and viable model for rural people and rural communities.

> Conclusion

The combination of public resources to modernize and enhance rural community infrastructure and quality-of-life and asset-building strategies can lead to rural community revitalization in the United States and full inclusion of rural Americans in the “ownership society.” Unfortunately, President Bush’s FY06 budget neither recognizes this possibility nor makes it a priority.


FISCAL YEAR 2006 BUDGET PROPOSAL

Below is an examination of the impact of President Bush’s Fiscal Year 2006 budget on funding of certain rural development programs and programs with a mission to build assets in rural communities and for rural people (housing and small business development primarily).

NOTE: All the following figures are in millions of dollars.


Value-Added Producer Grant Program
Authorized: $40.0
FY 05 Appropriation: $15.5
FY 06 Proposal: $15.5
Percent Change: (61.2)

USDA Rural Development (programs from various USDA agencies)

Program - Rural Community Advancement Business-Cooperative
FY05 Appropriation: $74.18
FY06 Proposed: $44.22
Pct. Change: (40.4)

Program - Rural Cooperative Dev. Grants
FY05 Appropriation: $24.0
FY06 Proposed: $21.0
Pct. Change: (12.5)

Program - Appropriate Technology Transfer for Rural Areas (ATTRA)
FY05 Appropriation: $2.0
FY06 Proposed: $0
Pct. Change: (100)

Program - Rural Eco. Dev. Grants
FY05 Appropriation: $10.0
FY06 Proposed: $10.0
Pct. Change: 0

Program - Rural Strategic Investment Program $100.0 $0 (100)
FY05 Appropriation: $100.0
FY06 Proposed: $0
Pct. Change: (100)

Program - Enterprise Zone/Enterprise Community/Rural Economic Area Partnership Program
(EZ/EC/REAP)
FY05 Appropriation: $22.16
FY06 Proposed: $13.37
Pct. Change: (39.7)

Program - Rural Community Development Initiative Grants (RCDI)
FY05 Appropriation:$6.3
FY06 Proposed: $0
Pct. Change: (100)

Program - Resource Conservation and Development Program (RC&D)
FY05 Appropriation: $51.64
FY06 Proposed: $25.6
Pct. Change: (50.4)

Program - Rural Bus. Enterprise Grant Program (RBEG)
FY05 Appropriation: $39.68
FY06 Proposed: $0*
Pct. Change: (100)

Program - Rural Bus. Opportunity Grant Program (RBOG)
FY05 Appropriation: $3.0
FY06 Proposed: $0*
Pct. Change: (100)

Program - Rural Enterprise Zone/Enterprise Community Round II
FY05 Appropriation: $12.50
FY06 Proposed: $0*
Pct. Change: (100)

Program - Intermediate Re-Lending Program (IRP)
FY05 Appropriation: $34.21
FY06 Proposed: $34.0
Pct. Change: (0.6)


Program - Northern Great Plains Regional Authority
FY05 Appropriation: $1.49
FY06 Proposed: $0
Pct. Change: (100)


SBA Microenterprise Development Programs

Program - Microloan Technical Assistance
FY05 Appropriation: $14.0
FY06 Proposed: $0
Pct. Change: (100)

Program - Microloan Program
FY05 Appropriation: $15.0
FY06 Proposed: $0
Pct. Change: (100)

Program - Program for Investment in Microentrepreneurs (PRIME)
FY05 Appropriation: $5.0
FY06 Proposed: $0
Pct. Change: (100)


Community Development and Housing Programs

Program - Community Development Block Grant (CDBG – 29.7% non-entitlement share)
FY05 Appropriation: $1,2332.559
FY06 Proposed: $0*
Pct. Change: (100)

Program - Rural Housing and Economic Development Program (HUD)
FY05 Appropriation: $24.0
FY06 Proposed: $0*
Pct. Change: (100)

Program - Economic Development Administration (Commerce)
FY05 Appropriation: $257.42
FY06 Proposed: $26.58 (salaries and expenses only)*
Pct. Change: (89.7)

Program - § 502 Single Family Loans (USDA)
FY05 Appropriation: $4,459.3
FY06 Proposed: $4,681.03
Pct. Change: 5.0

Program - § 504 Repair Loans (USDA)
FY05 Appropriation: $35.0
FY06 Proposed: $36.0
Pct. Change: 2.9

Program - § 515 Rental Loans (USDA)
FY05 Appropriation: $100.0
FY06 Proposed: $27.0
Pct. Change: (73)

Program - § 523 Land Development Loans (USDA)
FY05 Appropriation: $10.0
FY06 Proposed: $5.0
Pct. Change: (50)

Program - § 524 Site Loans (USDA)
FY05 Appropriation: $5.05
FY06 Proposed: $5.0
Pct. Change: (0.9)

Program - § 538 Multi-Family Loans (USDA)
FY05 Appropriation: $100.0
FY06 Proposed: $200.0
Pct. Change: 100

Program - Rental Assistance Grants (USDA)
FY05 Appropriation: $592.0
FY06 Proposed: $650.0
Pct. Change: 9.8

Program - § 523 Mutual and Self-Help Grants (USDA)
FY05 Appropriation: $34.0
FY06 Proposed: $34.0
Pct. Change: 0

Program - Rural Housing Assistance Grants (USDA)
FY05 Appropriation: $44.0
FY06 Proposed: $41.0
Pct. Change: (6.8)

Program - § 504 Repair Grants and Payments (USDA)
FY05 Appropriation: $31.0
FY06 Proposed: $30.0
Pct. Change: (3.2)


Community and Social Services

Program - Community Services Block Grants (HHS)
FY05 Appropriation: $631.0
FY06 Proposed: $0*
Pct. Change: 100

Program - Rural Community Facilities (HHS)
FY05 Appropriation: $7.0
FY06 Proposed: $0*
Pct. Change: 100

Program - Individual Development Accounts (HHS)
FY05 Appropriation: $25.0
FY06 Proposed: $25
Pct. Change: 0

* These are among 18 programs in the Departments of Housing and Urban Development, Commerce, Agriculture, Treasury and Health and Human Service being consolidated in the proposed Strengthening America’s Communities Initiative. In FY 2005, those 18 programs received combined funding of $5.61 billion; the FY 2006 budget proposes $3.71 billion for the Strengthening America’s Communities Initiative, a 33 percent reduction.

0 Comments:

Post a Comment

Links to this post:

Create a Link

<< Home