Val Ankeny and Mallory Tope contributed to this blog.
Every state benefits from federal resources and programs. Federal tax revenues finance public services like education, health care, infrastructure, economic growth, and disaster recovery services—all of which affect our daily lives.
President Trump’s Executive Order Unleashing American Energy has created funding uncertainties and put many critical projects on hold, leaving local businesses, farmers, and families unsure about the future. Some funds have been frozen and later unfrozen, to then be frozen again or cancelled. Continued uncertainty is causing worry and severe strain for organizations and communities that are relying on the funds.
Disruptions in funding will lead to the cancellation of programs and projects that benefit rural residents. Rural communities that have received contracts for these federal awards have already planned their budgets around the committed funds. A lapse of this support causes uncertainty and puts unnecessary pressure on local communities, organizations, and projects.
Across Iowa, Minnesota, Nebraska, and South Dakota, the impacts are being felt as projects relying on federal funds are stalled.
Iowa
Federal programs like the Rural Energy for America Program (REAP) have been vital for rural communities, providing grants and loans for renewable energy systems and energy efficiency.
Iowa’s farmers and businesses have received nearly $67 million through REAP, funding over 800 projects. The Inflation Reduction Act added more than $820 million to REAP, helping grant recipients install solar arrays and grain drying systems, with the expectation that the USDA would match the funds, as outlined in their signed contracts. Now, with the funding on pause, awardees are being left to figure out how to pay for the remaining cost of the projects.
Several infrastructure projects across Iowa, including the Cedar Rapids Bridge Replacement Project and Iowa’s Electric Vehicle (EV) Infrastructure efforts, are also at risk.
After years of planning, the City of Cedar Rapids secured a $56.4 million federal grant for the 8th Avenue Bridge Replacement Projects. The new bridge, elevated 15 feet above the existing bridge, will enhance durability and accessibility during floods and facilitate flood control deployment. Construction was scheduled to start in 2027, with 80% of the costs covered by the grant, but the project’s future, along with hundreds of others, remains uncertain.
Additionally, the National Electric Vehicle Infrastructure Program awarded over $16 million to the Iowa Department of Transportation for 28 EV chargers across the state, but several projects have now been placed on hold.
Minnesota
In mid-February, the Trump administration froze funds appropriated by Congress, locking Minnesota out of $200 million in federal grants for community-based projects. Last week, some funds were released, but uncertainty is causing worry and strain for organizations relying on the funds.
In July 2024, the U.S. Environmental Protection Agency awarded a $200 million Climate Pollution Reduction Grant to the Minnesota Pollution Control Agency (MPCA) to implement community-driven environmental solutions. Minnesota planned to use its grant to support the Minnesota Climate-Smart Food Systems project, led by MPCA.
The project will fund a range of initiatives, including peatland restoration, energy efficiency, vehicle and equipment electrification, improved food security, and other programs that assist and support farmers.
The construction of a new food waste processing plant in Scott County, to be operated by Ramsey/Washington Recycling & Energy (R&E), is one such project depending on this funding. The plant will process 75,000 tons per year of organic and food waste, converting enough natural gas to serve thousands of homes and reducing carbon emissions.
If the freeze is reinstated, $10 million in funding for this $100 million project is now at risk. Without these funds, the cost responsibility will fall to R&E and the residents of both counties.
Additionally, $20 million is allocated for the Department of Agriculture to expand initiatives such as the Minnesota Agricultural Water Quality Certification and Soil Health Financial Assistance programs that support farmers adopting popular practices such as no-till. With planting season on the horizon, farmers need clarity on funding so they can make decisions about practices and prepare for spring.
Nebraska
In July 2024, the Nebraska Department of Environment and Energy (NDEE) was awarded $307 million from the Environmental Protection Agency to invest in agriculture and energy projects. This investment is currently under review, leaving recipients in a state of uncertainty about its overall security and long-term status.
While NDEE’s award is under review, programs funded as part of the project have been paused. This includes the Opportunity for Nebraska: Reducing Emissions and Decarbonization (ONE RED) program. ONE RED would strengthen our state’s economy, reduce energy costs, encourage sustainable agriculture practices, and increase energy efficiency. One of its initiatives, the Irrigation Engine Rebate, received an overwhelming response from producers interested in replacing diesel irrigation motors with electric motors.
The Inflation Reduction Act (IRA) added over $820 million in funding for the Rural Energy for America Program (REAP). Administered by the U.S. Department of Agriculture Rural Development (USDA), REAP helps small businesses and agricultural producers install renewable energy systems and improve energy efficiency. Grant recipients who received funding through the additional IRA resources have moved forward with installing solar arrays and grain drying systems, expecting the USDA to provide matching grant funds once projects are completed, as outlined in their signed contracts. Now, because it is tied to the IRA, the expanded funding on pause, awardees are being left to figure out how to pay for the remaining costs of the projects.
South Dakota
Without access to federal funds, much-needed improvements to South Dakota’s infrastructure and public services will be delayed. For example, road, bridge, and dam repairs, water treatment upgrades, and affordable housing initiatives remain uncertain.
Two projects in particular demonstrate the significance of the projects at stake. More than $22 million was slated for maintenance and upgrades to the Mni Wiconi pipeline that brings water from the Missouri River to cities, rural communities, and tribal lands in the central and western portions of the state. A nearly $20 million project in Flandreau would replace a previously damaged local bridge.
South Dakota’s economy is deeply rooted in agriculture, and federal funding plays a significant role in supporting farmers and ranchers. Disaster relief programs, crop insurance subsidies, and conservation incentives help stabilize the industry, especially in the face of extreme weather.
Under the Inflation Reduction Act, programs such as the Environmental Quality Incentives Program and Rural Energy for America Program were receiving additional funding to help producers build more sustainable operations. This much needed funding is now at risk. Additionally, a grant to fund a project in Aberdeen to expand the sale and use of ethanol and biodiesel awarded under the Bipartisan Infrastructure Law is under review.
The federal government must honor its commitments to ensure these funds reach their intended purpose and support the communities that rely on them. As these programs and grant projects face uncertainty, community members should contact their congressional representatives and urge them to uphold federal contracts and obligations, ensuring continued investment in rural communities and their long-term economic growth.
It’s critical that members of Congress hear from the people they represent. We encourage you to get involved in the legislative process by communicating with elected officials about the issues you care about. If you don’t know who your legislators are, you can find them at this link.
