Federal Regional Development Programs Trends Insights and Future

Federal Regional Development Programs: Trends, Insights and Future Considerations BY THE NATIONAL ASSOCIATION OF DEVELOPMENT ORGANIZATIONS REGIONAL STRATEGIES. PARTNERSHIPS. SOLUTIONS

About NADO’s Mission § Strengthen local governments, communities and economies through the regional strategies, partnerships and solutions of the nation’s regional development organizations Advocacy | Education | Networking | Research

Presentation Overview Global Economic Development Trends U. S. Trends and Conditions Federal Political Climate Federal Policy and Budget Updates

World Is Changing Ever Faster Years to Reach Market Audience of 50 Million Radio = 38 Years Television = 13 Years Internet = 4 Years i. Pod = 3 Years Facebook = 2 Years (Source: Did You Know 3. 0)

World Is Changing Ever Faster More International Air Travel in a day today, than in a year in 1975 More International Phone Calls in a day today, than in a year in 1973 More International Trade in a day today, than in 10 days in 1968 (Source: ITTF)

4 Key Global Trends 1. Market State and Open Access to Workforce: Demographic, political and economic change 2. Global Grid: Rising foreign trade, freight, broadband & free flowing capital 3. Productivity Revolution 4. Pricing the Planet: Climate change, energy security and natural resources Source: America 2050 Initiative

Global Competitiveness Factors Regions Matter Primary drivers of any nation’s economic competitiveness are now regional in character Innovation Is Driving Force Ability to rapidly translate knowledge and insights into new high-value products and service is imperative

Why Regions Matter? Rapid expansion and interconnectedness of global markets Increased wealth, education and capitalism of emerging and developing nations Modern mobile lifestyle of American firms and residents Natural flows and patterns of vital resources, such as air, land water Significant budget cutbacks and demands at all levels of government

Source: America 2050, A Prospectus By Regional Plan Association

Innovation Driving Competitiveness In the 1970 s, U. S. relied on growing labor force to generate nearly 80 cents of every $1 in GDP In the coming decade, labor gains will contribute less than 30 cents to each additional dollar of growth To maintain GDP growth of 2 -3%, productivity gains will need to make up other 70% (Source: Mc. Kinsey Global Institute)

Global Economic Trends These forecasts will only become true if U. S Pursues an innovation and entrepreneurial economy with free flowing global capital Trains and fosters an educated world-class, including our growing, diverse workforce Balances environmental & economic goals Reinvests in modern infrastructure for energy, technology, transportation, water/waste water and knowledge sharing

The Economist, February 25, 2010

What Does This All Mean for America’s Regions and Local Communities?

FEDERAL POLICY AND POLITICAL CLIMATE

Major Federal Policy Issues Jobs, Jobs & Jobs Deficit and Debt Reduction FY 2011 Spending Bills and FY 2012 Budget Entitlement Reform and Tax Policies Health Care – Politics and Policy! Energy – Uprisings in Middle East and Africa Exit Strategies for Iraq and Afghanistan Wars Managing Relations with Asia, Especially China

Politics of Federal Agenda Unemployment Rates Dec 2007 = 4. 9 percent Jan 2009 = 7. 6 percent Oct 2009 = 10. 2 percent, highest since April 1983 June 2010 = 9. 6 percent Feb 2011 = 8. 9 percent GDP Growth is Key Political Measurement

Federal Regional and Community Development Policy

White House FY 2011 Budget Memo “Many important challenges demand a regional approach. The Nation is increasingly a conglomeration of regional economies and ecosystems that should be approached as such. Federal investments should promote planning and collaboration across jurisdictional boundaries. ”

Federal Development Policy Quality of Place Sustainable Regions and Communities Regional Innovation Clusters Commercialization of Research Federal Interagency Collaboration

Federal Development Policy Observations Megaregions and metropolitan University-led and non-profit alliances for commercialization and innovation Renewed emphasis on infrastructure, especially high-speed rail, transit, energy and broadband

Federal Regional Innovation Competitions Energy Regional Innovation Clusters i 6 Challenge Grants by Commerce-NIH-NSF Great Regions by USDA Rural Development SBA Regional Innovation Challenge EDA National Innovation Cluster Mapping

President’s FY 2012 Budget Proposal BY THE NATIONAL ASSOCIATION OF DEVELOPMENT ORGANIZATIONS REGIONAL STRATEGIES. PARTNERSHIPS. SOLUTIONS

President Obama’s FY 2012 Budget Downpayment on deficit reduction Investments for innovation and infrastructure Maintain support for education with reforms Short-term solutions for “doc fix” and AMT patch NADO. org Freezes federal civilian worker pay and gov’t reform

Federal Budget Trends FY 2000 -2012 Outlays FY 2000 FY 2005 FY 2010 FY 2012 FY 00 -12 Change Appropriations Defense / Security 278 B 443 B 815 B 881 B +$603 B Non-Security 339 B 487 B 491 B 462 B +$123 B Medicare 199 B 290 B 446 B 468 B +$269 B Medicaid 117 B 194 B 273 B 269 B +$152 B Other Mandatory 123 B 337 B 644 B 598 B +475 B 220 B 178 B 196 B 240 B +20 B 1. 790 T 2. 479 T 3. 456 T 3. 729 T +1. 939 T Mandatory Debt Interest NADO. org TOTAL OUTLAYS

Prepared by NADO

Prepared by NADO

President Obama’s FY 2012 Budget FY 12 Projected Deficit of $1. 1 Trillion (7% of GDP) FY 11 projected deficit of $1. 645 trillion (10. 0% GDP) FY 15 projected deficit of $607 billion (3. 2% of GDP) By comparison, combined state budgets = $1. 49 trillion Five-Year Non-Security Discretionary Spending Freeze Reduces the deficit by $400 billion over the next decade 211 Program Terminations, Reductions & Savings NADO. org Savings of $33 billion in the first year Cuts $78 billion from the Pentagon’s plan over five years

Prepared by NADO

“I’m not worried about the deficit. It’s big enough to take care of itself. ” -- President Ronald Reagan NADO. org

“Alexander Hamilton started the U. S. Treasury with nothing, and that was the closest our country has ever been to being even. ” -- Will Rogers NADO. org

Federal Regional Development Programs

DISCLAIMER: The President’s FY 2012 Budget Blueprint is the just the beginning of the process! Next steps are the House and Senate Budget Resolutions, which set the overall spending and revenue framework, followed by consideration of the 12 individual federal annual appropriations bills that fund the specific departments, agencies and program accounts.

President’s FY 2012 Budget Highlights Major Eliminations HUD Brownfields Economic Development Initiative DOL Career Pathways Innovation Fund USDA Resource Conservation and Development (RC&Ds) USDA High Energy Cost Grants EDA Trade Adjustment Assistance for Firms NADO. org

President’s FY 2012 Budget Highlights Major Reductions NADO. org DOL/HHS Senior Community Service Employment Program DOT - FAA Airport Improvement Program EPA Clean and Safe Drinking Water SRFs EPA Nonpoint Source Pollution Grants HHS Community Services Block Grants HHS Low Income Home Energy Assistance Program HHS Rural Hospital Flexibility Grant Program HUD Community Development Block Grants HUD HOME Improvement Program USDA Single Family Housing Direct Loans and Housing Repair Grants

President’s FY 2012 Budget Highlights Noteworthy Increases USDA Single Family Housing Guaranteed Loans USDA Community Facility Direct Loans DOT SAFETEA-LU Levels for Highway and Transit Programs EDA Regional Innovation Program EDA Wireless Innovation Initiative EPA State and Local Air Quality Management Grants NADO. org HHS Administration on Aging

USDA Rural Development $2. 4 billion in budget authority to support of program level of $36 billion in grants, direct loans and loan guarantees Major Theme: Strategic Leveraging of Existing Resources NADO. org through Regional Innovation Initiative (RII)

USDA Rural Development Regional Innovation Initiative (RII) Focuses on regional planning and coordination of USDA and other federal and private sector resources for rural areas Targets up to 5 percent of certain existing programs (About $171 M) to the support the initiative; Also dedicates funding from the Rural Community Development Initiative (RCDI) and NADO. org Rural Business Opportunity Grants (RBOG) to support regional economic development strategies

USDA Rural Development: Rural Business – Cooperative Service (RBS) Business and Industry (B&I) Loans $823 M Program Level, down $223 M due to subsidy rate Priority on regional innovation, healthy food, renewable energy and expansion of broadband deployment Rural Business Enterprise Grants (RBEG) $30 M for grants, reduction of $9 M Rural Business Opportunity Grants (RBOG) NADO. org $7. 5 M for grants, increase of $5 M as part of RII

Forest Service Payments to Communities (Secure Rural Schools and Community Self Determination Act) Requests $328 M for FY 2012 in discretionary funds FY 2011 level was $416 M in mandatory money Proposes as discretionary funds, rather than mandatory Proposes to decrease funding every year during the five-year reauthorization period with changes Revises allocation split between 3 portions of the program The Secure Rural Schools and Community Self-Determination Act of 2000 (P. L. 106 -393) provides temporary payments to counties impacted by the reduction of shared receipts stemming from lower levels of timber harvesting on Federal lands. NADO. org

Economic Development Administration Economic Development Assistance Programs: $284. 3 M Request, Increase of $29. 3 M from FY 2010 Maintains Planning at $31 M Cuts Public Works to $89 M, down from $158. 28 M in FY 10 $40 M Regional Innovation Program for 20 Growth Zones Increases Economic Adjustment to $81 M, up from $44 M in FY 10 As authorized by COMPETES Act, new $100 M loan guarantee program for science and technology parks and incubators NADO. org Salaries and Expenses: $40. 6 M, Up $2. 6 M from FY 10

Economic Development Administration Regional Innovation Program (Economic Growth Zones) National Competition under partnership with HUD and USDA Select 20 growth zones (estimated at 14 urban and 6 rural) Resources for planning and seed capital, including rigorous economic development analysis, additional strategic planning, NADO. org capacity building and project implementation

Economic Development Administration Wireless Innovation and Infrastructure Initiative (WI 3) Federal auctions of reallocated spectrum licenses expected to generate $27 B by 2021 EDA will participate in wireless innovation fund by setting aside $100 M over five years in new money in prize and grant competitions to fund development of regional clusters of NADO. org wireless innovation

HUD Community Development Block Grant (CDBG) Reduces formula funding to $3. 691 B, cut of $181 M HOME Investment Partnerships: $1. 65 B, cut of $175 M Replaces Hope VI with Choice Neighborhoods Grants at $240 M Rural Housing Stability Program: $25 M for rural homeless Rural Innovation Fund: Remains at $25 M NADO. org Rural Mapping Tool to measure poverty and community housing distress

HUD Sustainable Communities Office of Sustainable Housing and Community Development Funds separately, rather than set-aside with CDBG Fund Level Funding for Core Programs «$100 M for Regional Integrated Planning Grants «$40 M for Community Challenge Grants «$5 M for Research and Evaluation with HUD and DOT «$5 M for new energy consumption database with focus NADO. org on public housing

Labor – Employment and Training Workforce Investment Act (WIA) Funding Adult Employment and Training: $792 M , down from $862 M Dislocated Workers: $1. 31 B, down from $$1. 413 B Youth Employment: $965 M, down from $1. 02 B Plus WIA formula funding is reduced further for national initiatives Workforce Innovation Funded through 8 percent takedown from WIA Adult, Dislocated Workers and Youth programs at $297 M DOL national competitive grants for new service delivery NADO. org strategies or expand evidenced-based practices

Labor – Employment and Training Trade Adjustment Assistance Community College and Career Training (Eligible institutions of higher education) $500 M annually in FY 2011 -2014 for competitive grants Green Jobs Innovation: $60 M, increase of $20 M from FY 10 level Job Corps: $1. 69 B, decrease of $8. 45 M from FY 10 level High Growth Job Training Initiative: $125 M Career Pathways Innovation Fund: Replaced by TAA Career NADO. org Youth. Build Program: $115 M, up from $102. 5 M «DOL will issue new rulemaking in FY 12

Small Business Administration Overall: $985 M in New Budget Authority $575 M for salaries and expenses ($160 M for non-credit programs) Business Loan Subsidy: $215. 3 M, Increase of $132. 3 M Disaster Assistance Program: $167. 3 M, Increase of $90. 7 M Office of Inspector General: $18. 4 M, Increase of $2. 1 M Major Notes Regional innovation clusters is major theme NADO. org Need for subsidies to cover costs of 7(a) and 504 CDC loans

Small Business Administration Credit Programs 7(a) Guaranteed Loans «Requests $129. 8 M of credit subsidy to support $16. 5 B in lending authority 504 CDC Lending Program «Requests $81. 8 M of credit subsidy to maintain $7. 5 B in lending authority; First time since FY 1997 NADO. org «Increases borrower fees to. 9375% cap, up 20% from FY 11 «Increases loan default estimates to over 19%; Highest ever

Small Business Administration Non-Credit Programs HUBZone Program: $2. 5 M, increase of $311 K Microloan technical assistance: $10 M, cut of $9. 2 M PRIME technical assistance: No funding , cut of $8 M SBDC Grants: $103 M, cut of $9. 6 M SCORE: $7 M, level funding Entrepreneurial development (clusters): $14 M, increase of $3 M NADO. org Emerging Leaders: $3 M for new program (also proposed in FY 11)

DOT – Major Highlights Proposes New $556 B, Six-Year Surface Transportation reauthorization package (SAFETEA-LU) – ave. of 60% increase “Up-Front” investment of $50 B Requests $53 B over six years for High Speed Rail investments Establish new National Infrastructure Bank at $30 B over six years Dedicate $32 B for competitive grant programs Major reforms and cuts to FAA Airport Improvement Program NADO. org

SAFETEA-LU Reauthorization $556 B, Six-Year Reauthorization Framework «$50 B “Up-Front” investment immediately «$336 B for highways and bridges; 48% increase «$119 B for transit; 127% increase «$53 B for national high-speed rail network, including Amtrak «$30 B for National Infrastructure Bank The President’s FY 2012 Budget does NOT identify new or NADO. org potential revenue sources for the proposed new spending!

SAFETEA-LU Reauthorization New Transportation Trust Fund «“Highway Trust Fund” changed to “Transportation Trust Fund” «Adds high-speed rail and national infrastructure bank «HOWEVER, existing HTF taxes would remain solely for highway and transit accounts – NOT rail and infrastructure bank «$1. 3 B for Transportation Leadership Awards for competitive grants related to innovations in transportation policy NADO. org «Requests $70. 5 B in FY 12, including “Up-Front” money; Represents $29 B increase over FY 10 enacted

SAFETEA-LU Reauthorization Highways – Proposes $336 B over Six Years (48% Increase ) «Merge 55 separate highway accounts into five core programs 1. Highway Safety Improvements: $2. 5 B in FY 12 2. National Highway Program: $32. 4 B in FY 12 ÷ Highway Infrastructure Performance & Flexible Investments 3. Livable Communities: $4. 1 B in FY 12 4. Federal Allocation: $1. 4 B in FY 12 5. Research, Technology and Education: $661 M NADO. org «Subjects surface transportation spending to PAYGO and converts a number of previously General Fund programs

SAFETEA-LU Reauthorization Transit – Proposes $119 B over Six Years (127% Increase) « Merge five transit programs into state of good repair account Bus and Rail State of Good Repair: $10. 7 B ($7. 5 B FY 12) Transit Formula Grants: $7. 7 B ($3 B FY 12) New Transit Expansion and Livable Communities; Includes $50 M for Livable Communities demonstration grants « Proposes to allow urban transit authorities (in areas of 200 K or more) to temporarily use formula funds for operations NADO. org « Entrust FTA with authority to oversee rail transit safety

NADO Policy Agenda Promoting regional solutions and approaches EDA appropriations and reauthorization SAFETEA-LU reauthorization, with RPO legislation Sustainable Communities Initiative USDA Rural Development partnerships Opportunities with WIA, SBA, EPA and HUD

President’s FY 2012 Budget Highlights Online Resources OMB Budget Resources: www. whitehouse. gov/omb/budget «FY 2012 Budget «FY 2012 Appendix «FY 2012 Terminations, Reductions and Savings Federal Agency Websites: «FY 2012 Budget in Brief NADO. org «FY 2012 Congressional Budget Justification «FY 2012 Budget Fact Sheets

The President’s FY 2012 Budget Blueprint is the just the beginning of the process! Next steps are the House and Senate Budget Resolutions, which set the overall spending and revenue framework, followed by consideration of the 12 individual federal annual appropriations bills that fund the specific departments, agencies and program accounts.

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