Federal Government Walking Away from Rural America

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Jon Bailey,jonb@cfra.org,Center for Rural Affairs (402) 687-2103 ext. 1013 or Kim Preston,kimp@cfra.org, Center for Rural Affairs (402) 687-2103 ext. 1022
LYONS, NE - The Center for Rural Affairs' Rural Brief April 2008 Issue takes a close look at Rural Development funding for FY09. President Bush released his Fiscal Year 2009 budget on February 3, 2008. While this $3.1 trillion budget for the entire federal government sets the parameters for future debate and deliberations in Congress, it is primarily a recommendation and the first step in the annual appropriations process.
As with previous budgets, the FY09 budget recommends termination of numerous federal rural development and rural asset-building programs. Of the 40 programs highlighted in the Rural Brief, President Bush recommends termination and zero funding for 20 of the programs.

"The President's budget recommendations and the recent decline in rural development investment suggest that the federal government is walking away from any commitment to the future of rural America and its communities. Combined with a lack of investment in any rural economic or community development in the Farm Bill, this demonstrates a serious disregard for the economic and social challenges facing many rural communities and to the 60 million people who call rural America home," commented Jon Bailey, Rural Research and Analysis Program Director at the Center for Rural Affairs.

The President's FY09 budget continues a trend of significant reductions in rural development funding since 2003. If the Administration's FY09 budget were approved, since FY03:

>Programs for rural water and sewer would have been reduced by 62 percent
>Programs for rural business and cooperatives would have been reduced by 50 percent
>Programs for rural community facilities would have been reduced by 76 percent
>Programs for rural housing would have been reduced by 95 percent

Funding for programs such as telemedicine, distance learning, economic development, water and sewer, community facility, business, renewable energy, and value added agriculture would decline by over 87 percent from their FY04 high point if the Administration's FY09 budget were adopted.

The FY09 Budget Proposal would eliminate the MicroLoan technical assistance grants. The FY09 Budget Proposal also proposes making the SBA MicroLoan program a "zero subsidy" program with a goal toward making the program self-funding through an increase of interest rates charged to program intermediaries. This has the result of making the cost of serving rural entrepreneurs more expensive and likely less attractive, eventually resulting in fewer intermediaries interested in providing services to rural entrepreneurs, thus decreasing the number of rural people interested in beginning small businesses.

Click here: http://www.cfra.org/node/1172 to view the entire Rural Brief.

The Rural Brief is a publication of the Center for Rural Affairs and analyzes federal Executive, Legislative and Administrative action concerning rural development and asset-building programs and initiatives. The Rural Brief is available both electronically and in print. Call the Center at 402-687-2100 or email at info@cfra.org.


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