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Congressional Testimony
August 2, 2001, Thursday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 4578 words
COMMITTEE:
SENATE AGRICULTURE, NUTRITION AND FORESTRY
HEADLINE: 2002
FARM BILL
TESTIMONY-BY: KAREN DEARLOVE, EXECUTIVE DIRECTOR OF THE
AFFILIATION: INDIANA 15 REGIONAL PLANNING COMMISSION
BODY: August 2, 2001
Statement for the
Record of
Karen Dearlove, Executive Director of the Indiana 15 Regional
Planning Commission and President of the Indiana Association of Regional
Councils on behalf of the National Association of Development Organizations
Before the Senate Agriculture, Nutrition and Forestry Committee
Thank you, Chairman Harkin, Senator Lugar and members of the committee
for the opportunity to submit testimony today on the importance of a strong and
comprehensive rural development title in the upcoming
Farm
Bill. My name is Karen Dearlove, and I am the Executive Director of the
Indiana 15 Regional Planning Commission in Jasper, Indiana. I also currently
serve as the President of the Indiana Association of Regional Councils.
About NADO and Regional Development Organizations
The National
Association of Development Organizations (NADO) provides training, information
and representation for regional development organizations serving the 82 million
residents of small metropolitan and rural America. The association, founded in
1967 as a national public interest group, is a leading advocate for a regional
approach to community and economic development. NADO members--known locally as
councils of government, economic development districts, local development
districts, regional planning commissions and regional councils--provide valuable
professional and technical assistance to over 2,000 counties and 15,000 small
cities and towns. They also administer and deliver a variety of federal and
state programs, based on local needs. Programs include aging, census, community
and economic development, emergency management, small business financing,
transportation and workforce development. Each region is governed by a policy
board of elected officials, business leaders and citizen representatives.
Associate members of NADO include state, county, city and town officials;
educational and nonprofit organizations; utilities; and businesses and
individuals.
Since 1999, the Indiana 15 RPC has assisted local
governments on 60 different projects totaling over $
40 million.
Established in 1973, Indiana 15 Regional Planning Commission serves a six-county
region in southern Indiana. In addition to providing planning and technical
assistance to local communities, Indiana 15 delivers and assists local
communities with EDA, USDA and HUD Community Development Block Grant proposals,
solid waste projects, historic preservation efforts, business and tourism
development and natural disaster recovery. Indiana 15 is also acting as the lead
organization in meeting the tertiary needs facing local businesses such as
childcare and quality schools for their employees' children. Through three
recent cooperative projects involving both the public and private sectors,
Indiana 15 has been able to ensure the area has quality daycare facilities for
almost 200 children.
Policy Priorities for the Upcoming
Farm
Bill In crafting the next
Farm Bill, Mr.
Chairman, the members of the National Association of Development Organizations
strongly urge the committee to develop and support a comprehensive rural
development title. We believe there are three main points that support our
position.
1. Rural communities need federal development assistance
programs and policies that allow them to identify, address and meet local needs.
2. USDA rural development programs should remain focused on supporting
the basic needs of local communities, such as water and wastewater systems,
small business development finance, telecommunications and housing.
3.
Local capacity building and technical assistance programs, such as the proposed
Rural IMPAC program, are essential to the long-term stability and recovery of
rural communities.
First, Mr. Chairman, rural communities need federal
development assistance programs and policies that allow them to identify,
address and meet local needs, whether they are basic infrastructure, education,
health care, small business development, telecommunications or transportation
related. As the following data demonstrates, rural America is a diverse, complex
and constantly evolving place. That is why a "one-size-fits-all" federal rural
development policy is impractical, unreasonable and ineffective.
Home to
almost one-third of the nation's population (equivalent to the urban
population), small town and rural America is a diverse and constantly changing
place. Rural America compromises 2,192 of the nation's 3,066 counties (counties
of 50,000 and below), 75 percent of all local governments and 83 percent of the
nation's land.
While the common perception is that rural Americans only
live in the South, Midwest and Great Plains, more rural Americans live in New
York, for example, than rural Idaho, Montana, Nebraska, Nevada, North Dakota,
South Dakota, Utah and Wyoming combined. States with the largest total rural
populations include Pennsylvania, Texas, North Carolina and Ohio.
While
no one industry dominates the entire rural economy, the service sector now
accounts for almost 50 percent of employment, with manufacturing employing twice
as many people as all natural resource production activities combined, including
agriculture, forestry, fishing and mining. While still an important fabric of
rural life, farming represents less than eight percent of rural jobs and 50
percent of farm families rely heavily on off-farm income.
Demographic
trends also suggest that rural Americans are proportionally older, more likely
to live in poverty and less educated than their urban counterparts. However,
individual rural communities are constantly changing and evolving, as many are
becoming booming retirement destinations and tourist attractions, while others
are struggling to diversify away from a one-industry town.
Unfortunately, the current structure of federal assistance programs
fails to fully recognize and address the complex set of challenges facing rural
communities. In comparing federal assistance for urban and rural communities,
for example, one quickly discovers a troubling trend that explains the perpetual
problems plaguing some rural communities.
While urban communities
receive a substantial amount of federal grant money for infrastructure
development, the bulk of rural assistance is in the form of transfer payments
such as Social Security, Medicare and agriculture payments. Furthermore, urban
counties and cities are more likely to receive economic development, housing and
transportation funding directly from federal agencies, while rural communities
must compete on a national, state or regional basis.
The US Department
of Housing and Urban Development's (HUD's) $
4.8 billion
Community Development Block Grant (CDBG) program is one of the largest federal
domestic assistance programs. Under the program, approximately 1,000 of the
nation's largest cities and counties divide over $
3 billion
each year in entitlement spending. This flexible funding allows them to meet
important local needs. Meanwhile, the other 30 percent of funding is distributed
to states for the small cities program. While an essential and effective
program, the nation's 14,000-plus rural communities must compete within their
state for these CDBG funds.
Another example is the $
32
billion annual federal highway program, where urban areas directly receive
millions of dollars for planning and infrastructure development activities while
historically rural communities have had to work through state departments of
transportation. With the bipartisan leadership of the Rural Caucus, however,
Congress has made significant strides in recent years to correct this inequity.
Adding further to the discrepancy between urban and rural areas is the
type of assistance available to rural communities. Many of the federal economic
development programs targeted to urban areas are in the form of grant
assistance, while many rural programs, including USDA rural development
programs, rely heavily on loans and loan guarantees instead of grants. Urban
communities typically also have more access to capacity building and technical
assistance dollars from HUD and other agencies, whereas most rural economic
development planning is funded through the US Economic Development
Administration's effective but small program.
Without a greater
commitment by this committee and Congress to a stronger USDA rural development
program, rural communities will continue to be at a marked disadvantage in
trying to build and sustain viable local economies. This statement was recently
endorsed by over 117 members of the Congressional Rural Caucus who pledged their
support for a comprehensive rural development title as part of the
Farm
Bill rewrite.
Second, Mr. Chairman, USDA rural development
programs need to remain focused on supporting the basic needs of local
communities, such as water and wastewater systems, small business development
finance, telecommunications and housing. All of these are essential building
blocks for local economic development efforts, which eventually result in better
paying jobs and an improved quality of life for local residents.
In
December 2000, the NADO Research Foundation surveyed the 320 regional
development organizations serving small metropolitan and rural America about
their existing programs, organizational structure and regional needs.
Nationally, the overwhelming response for the area of greatest need was for
water and wastewater improvements, with transportation and workforce development
rounding out the top three. The other most commonly mentioned needs involved
funding for capacity building and access to advanced telecommunications.
Other areas of local need could be for quality childcare and healthcare
facilities as well as adequate schools. Studies by the Rural Research Policy
Institute have shown that largest employers in rural communities are many times
the local schools and the health sector. However, these areas are also a part of
the critical infrastructure that businesses require for development and
expansion. Therefore, federal programs, including USDA, need to be more elastic
to meet the local challenges of rural communities.
NADO survey
respondents were also asked to identify the USDA rural development programs they
use most frequently to assist their rural communities. The top three programs
were: water and wastewater program, rural business enterprise grants (RBEG)
program and intermediary relending program (IRP). Other key programs included:
community facilities, rural business opportunity grants (RBOG), solid waste
management and rural housing programs. However, a common complaint from NADO
members is that too much of USDA rural development funding is set-aside for
specific communities, whether for the handful of rural Empowerment Zones and
Enterprise Communities (EZs/ECs) or specific areas such as the Delta and Tribal
communities.
It is also important to note that the vast majority of
rural local governments rely on regional development organizations to help them
understand the complex menu of USDA programs, required matching requirements
and, often times, burdensome paperwork. (Note: Over 33,000 of the nation's
39,000 units of local government have populations below 3,000 and 11,500 employ
no fulltime professional employees.)
When regional development
organizations have been eligible to compete for, and receive, USDA rural
development funding they have made major strides for their communities.
Following are just a few examples of the impact regions are making with the RBOG
and IRP programs:
- In Alabama, the Alabama-Tombigbee Regional Council,
headquartered in Camden, received a $
28,000 RBOG grant to
develop a strategic plan for their ten-county region. This project enabled local
leaders to work together on a regional basis to identify their strengths and
weaknesses. The end product will be a strategic plan that will serve as the
local roadmap for future development.
- In Maine, the policy board
members of the Northern Maine Development Commission identified business
development and retention as a top priority during their comprehensive
development strategy planning. In response, USDA awarded them with a small RBOG
grant to establish a technical assistance support center for small businesses.
By addressing this locally identified need, the technical assistance center is
investing in the start-up, retention and expansion of local businesses, all
resulting in the creation of new jobs in this distressed rural region.
-
Headquartered in North Fort Meyers, the Southwest Florida Regional Planning
Council is leveraging a $
95,000 RBOG grant to support a
$
250,000 regional strategic initiative for rural development.
This multi-faceted program is helping the region assess the skills of the local
workforce and identify areas of needed training; pinpoint new industries to
complement the area and develop a marketing plan for attracting those new
businesses; and establish a business development specialist in the local Small
Business Development Center to assist local entrepreneurs.
- In
Pennsylvania, the loan programs of the North Central Pennsylvania Regional
Planning and Development Commission have helped create or retain over 3,000 jobs
since 1984, including its highly successful IRP fund. The local company Gasbarre
Products, for example, has used five loans over the past 12 years to expand from
55 employees to almost 300.
- In South Dakota, the Northeast Council of
Governments uses its IRP program to support local small businesses, including
one loan in Eureka that helped establish a local convenience store, the only one
within miles of the town.
NADO strongly believes that the RBOG and IRP
programs are valuable tools for regional development organizations. However, the
effectiveness of the RBOG program, which has grown from less than
$
1 million in FY1998 to $
8 million in FY2001,
has been restricted by congressional mandates and USDA practices. By earmarking
almost 50 percent of RBOG funds for rural EZ/ECs and REAP zones, each state is
typically left with between $
50,000 and
$
200,000. Congress should either increase funding to ensure
each USDA state rural development director has sufficient funds or eliminate
setasides and make it a national discretionary competitive program.
The
IRP program would also be more effective at reaching higher risk businesses if
intermediaries were awarded grants instead of loans that need to be repaid to
USDA. Otherwise, they will generally continue to make lower-risk loans that are
less likely to go into default in order to make interest and principal payments
over the life of the loan from the intermediary to USDA.
Another
important comment on existing USDA rural development programs relates to the
1996
Farm Bill requirement that each USDA state rural
development director develop a five-year strategic plan. Recognizing that
Congress failed to provide additional funding for this activity, it is still
disheartening that the vast majority of state directors failed to consult with
rural local officials in crafting their development strategies. In rewriting the
Farm Bill, we urge the committee to build on and strengthen
this important process by calling for more local input and control.
Third, Mr. Chairman, local capacity building and technical assistance
programs, such as the proposed Rural IMPAC program, are essential to the
long-term stability and recovery of rural communities. Without professional
staff to facilitate the development of local action plans and to understand the
complexities of federal assistance programs and rules, most rural communities
will remain at a substantial disadvantage to their suburban and urban
counterparts.
Fortunately, a relatively small federal investment in
local capacity building can be stretched a long way in rural America,
particularly if implemented on a multi-county basis. Before describing the
concept of the proposed Rural Investment Program for Area Capacity (Rural IMPAC)
program, I want to highlight a sample of successful partnership programs between
USDA rural development and regional development organizations.
- In the
mid-1990s, the USDA state rural development director in Iowa recognized the
intense need for additional training and outreach on USDA programs at the local
level. Instead of further extending the workload of USDA officials, the director
awarded four regional councils $
50,000 each to establish the
"Reaching Out to Rural America Pilot."
As part of the pilot project, the
regional councils of government provided educational seminars for local
officials, business leaders and private nonprofits about the menu of rural
development programs, explored alternatives for using programs such as IRP, and
developed electronic means for facilitating local communications. They also met
regularly with USDA officials to identify additional ways to help local
organizations fund and complete needed projects.
- USDA officials in
four other states (Michigan, Ohio, Tennessee and Virginia) have also signed
agreements with individual regional development organizations to help with local
outreach, training and grant applications. However, most do not receive funding
for their efforts. In the early 1990s, for example, the state of Tennessee had
80 USDA offices that provided financial assistance to its 95 counties. By
realigning the rural development offices along the boundaries of the nine
regional development districts, USDA streamlined their overhead from 80 offices
to nine, and its staff from 261 employees to 170. It also allowed the USDA rural
development offices in Tennessee to work more effectively with the development
districts to meet local community needs.
Study after study by federal
agencies and universities have concluded that additional funding for capacity
building and technical assistance programs is one of the most pressing needs
facing rural governments and communities. This stems from the fact that most
rural local governments simply do not have the financial resources to hire
professional economic development practitioners. And, presently there are few
federal programs designed specifically for their needs--unlike urban areas that
receive millions of dollars in direct funding from HUD and Department of
Transportation.
As a result, it is often difficult for the nation's
14,000-plus rural communities to access both public and private sector funds
designed to help them address basic infrastructure, housing, small business
development finance, technology and transportation needs, all essential building
blocks for creating a sustainable local economy. As a further consequence, most
rural communities lack the professional expertise and financial resources needed
to fund, develop and implement a comprehensive plan of action.
A sound
and proven alternative for USDA rural development is to partner with the
national network of 320 regional development organizations, who have almost
daily contact with cities, counties, towns and other community organizations, in
addition to decades of experience in combining and leveraging resources to meet
local needs.
In implementing a program such as the proposed Rural
Investment Program for Area Capacity (Rural IMPAC) program, Congress would be
moving a step closer to helping local communities overcome the fractured system
of federal rural development programs. The program would place communities in a
better position to address local issues on a regional basis, whether it relates
to water treatment facilities, technology upgrades, closing of a major plant or
cleanup after a natural disaster. Rural communities will also be more capable of
taking a proactive approach to economic development, instead of the traditional
reactionary model.
Whether a region is currently enjoying economic
stability or coping with long-term challenges such as declines in traditional
industries, they must plan for tomorrow, or risk falling far behind in the
competitive global and high-tech marketplace. History has clearly demonstrated
that communities who fail to adjust are often left behind. In the late 1800s it
was those disconnected to railroads, in the 1960s it was the interstate highway
system and today it is high-speed Internet connections. Just developing advanced
telecommunications systems alone, however, will not be enough for rural America.
Industries and residents will still need basics assets such as quality
infrastructure, schools, health facilities and seamless transportation networks.
Following are brief examples of how NADO members are helping local communities
respond to local needs and prepare for the future.
- In Oklahoma, the
South Western Oklahoma Development Authority (SWODA) is using its Geographic
Information System (GIS) and Global Positioning System (GPS) to develop capital
improvement plans for local governments, a process that requires an inventory of
all public assets. By cataloging and mapping every road, bridge, water line,
public building and other assets, SWODA can develop visuals for local elected
officials and business leaders who are developing infrastructure investment
strategies. The data can also be used for zoning decisions, land use management,
transportation planning and an almost endless list of other activities.
- Examples of technical assistance provided by the 24 regional councils
of government in Texas include financial management, planning and community
development, joint data and computer services, cooperative purchasing,
development of 911 systems, regional training programs for local officials and
law enforcement officers, establishment of housing finance corporations,
organization of legal services and credit unions for small cities, preparation
of grant applications and local ordinance writing.
- In eastern
Kentucky, several regional development organizations are involved in a
life-changing program that is providing area residents with clean and safe
drinking water, many for the first time in their lives. Due to the natural
landscape, it is often extremely costly for local residents to install water and
waste treatment systems such as septic tanks. Historically thousands of
Appalachia residents have used straight pipes to dispose of waste, usually
directly into creeks, streams and rivers.
With the leadership and
support of Congressman Harold Rogers, the regional development organizations
have developed maps of the straight pipe locations and educational programs
about their environmental impact. They have also created revolving loan funds
for area residents to obtain low interest loans for septic tank purchases. This
model program has helped improve the quality of drinking water in the region and
protect the environment, while also restoring pride in the communities.
- Faced with overcrowding jails, an overflowing landfill and growing
debt, McMinn County officials in Tennessee learned firsthand the benefit of
regular strategic planning sessions with the Southeast Tennessee Development
District. Over a ten-year period, the county has worked with the district to
address these pressing needs while also planning for the future. As a result,
the county will be debt-free by 2002 and plans to implement a new pay-as-you-go
policy.
- In North Carolina, the Upper Coastal Plains Council of
Government helped the rural town of Scotland Neck secure a USDA rural
development grant to update and modernize the public library. By leveraging the
USDA dollars with additional private sector and foundation funds, the town will
add computers with high-speed Internet access to allow citizens and students to
gain new opportunities and upgrade their skills.
- In Virginia, the New
River Valley Planning District Commission continues to shepherd four counties
through a decade-long economic recovery. The district helped create, and staffs,
the area's first regional industrial park authority. The district is also
providing ongoing support to the planning and design of a new technology magnet
school, a partnership preparing high school students for careers in high
technology fields.
- The Kankakee-Iroquois Regional Planning Commission
in Indiana established a multi-county Intergeneration Facility by leveraging
local resources with funds from HUD's Community Development Block Grant in
response to a community needs assessment. Once fully constructed, the new
facility will host Head Start classrooms, full senior activity services,
childcare services and English as a second language classes.
- The
Meramec Regional Planning Commission in Missouri has been working for two years
with various partners to build a child care center that will serve a nearby
industrial park that employs 1,200 people in 10 businesses, a Wal-Mart
distribution plant that will employ 600 people and a local hospital. Once the
state-of- art facility is built it will be able to provide childcare for 90
children.
- Through an annual local business roundtable session, the
Boonslick Regional Planning Commission in Missouri became aware of the
increasing difficulty area workers were having in finding quality childcare. In
response, the RPC pulled together community stakeholders to build a 100-child
daycare center in 1999. The facility current hosts 83 children and, in
conjunction with the local school district, provides before school and after
school programs, as well as services for small children.
- In 1995, the
Northeast Council of Governments (NECOG) in South Dakota first brought broadband
technology to the area through a Department of Commerce grant for educational
purposes. NECOG, however, then extended the use of two-way audio/visual feed to
support telemedicine activities. The project now connects area residents with
specialists in world-renown hospitals such as the Mayo Clinic.
In
addition, NECOG answered a local call for improved childcare services in 1999
when it provided the administrative link between the AmeriCorps program with a
local Bridges program. This partnership has enabled single parents and others to
be gainfully employed while their children are being supervised in a suitable
before-school and after-school environment.
By further strengthening
regional development organizations through the Rural IMPAC program, Congress
would be ensuring that the nation's most rural communities could set goals,
priorities and make more informed and effective decisions. We urge the committee
to support the creation of the Rural IMPAC program
In closing, Mr.
Chairman, I want to thank you and the committee for the opportunity to comment
on USDA rural development programs, and federal rural development policies in
general. I also want to reiterate our three main points: (1) Rural communities
need federal development assistance programs and policies that allow them to
identify, address and meet local needs. (2) USDA rural development programs
should remain focused on supporting the basic needs of local communities, such
as water and wastewater systems, small business development finance,
telecommunications, and housing; and (3) Local capacity building and technical
assistance programs, such as the proposed Rural IMPAC program, are essential to
the long-term stability and recovery of rural communities.
Thank you
again for the opportunity to comment on this important matter.
LOAD-DATE: August 8, 2001