Economic Development Administration

NADO Center for EDA Rulemaking

Administration Unveils EDA Reauthorization Plan

April 21, 2008 --On April 21, the administration released its proposal for reauthorization of the Economic Development Administration (EDA). EDA’s current authorization expires at the end of fiscal year 2008. Specific provisions of the administration’s plan include:

  • Authorization of only $100 million for EDA’s economic development assistance programs for fiscal year 2008, equal to the President’s budget request and nearly $150 million under current spending. The proposal then authorizes “such as sums as necessary” through 2013.
  • Provides authority to approve a request from an RLF recipient to convert project assets held in conjunction with an RLF project.
  • Provides EDA with new authority to approve an RLF recipients request to “extinguish” the federal reversionary interest by repaying EDA for its share of the project.
  • Provides the Secretary of Commerce with the ability to transfer up to two percent annually of the funds appropriated for economic development assistance programs to develop and maintain an automated RLF tracking system.
  • Creates Economic Development Award program to recognize innovative economic development strategies. Program provides recognition for purposes of disseminating best practices.

Congress has yet to act on the administration’s plan and no Member of Congress has agreed to introduce the bill. It is unclear, given the tight congressional calendar, if legislation will move this session.

NADO is in the process of working with staff from authorizing committees on legislation that encompasses the priorities identified by the nationwide network of economic development districts (EDDs) in a survey conducted by NADO last summer. In addition, NADO continues to actively work with the House and Senate Appropriations committees to provide increased funding for EDA.

To access a copy of the administration’s reauthorization proposal, visit www.nado.org/legaffair/reauth08.pdf. To view the results of NADO’s EDD survey, visit www.nado.org/legaffair/survey.pdf. For more information, contact NADO Legislative Director Jason Boehlert at 202.624.8590 or jboehlert@nado.org.

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NADO Joins Call for Additional EDA Funds to Stimulate Economy

April 17, 2008 --On April 17, NADO joined with a coalition of organizations urging leaders of the House and Senate Commerce, Justice, Science and Related Agencies Appropriations Subcommittee to include funding for the Economic Development Administration (EDA) in any stimulus legislation developed by Congress.

The letter, which was also signed by the American Public Works Association (APWA), National Association of Counties (NACo), Center for Automotive Research and National Association of Regional Councils (NARC), underscores the need for additional funding to support backlog of “ready-to-go” EDA public works that are expected to “generate or retain more than 47,000 jobs and attract in excess of $7.2 billion in private sector investment.”

Last week, it was revealed that Congressional Democrats were considering adding domestic spending provisions to a supplemental appropriations bill for operations in Iraq and Afghanistan. However, Office of Management and Budget (OMB) Director Jim Nussle indicated that the administration would veto any measure that contained domestic spending. The war supplemental spending measure is expected to contain roughly $170 billion in funding.

View the letter here. For additional information, contact NADO Legislative Director Jason Boehlert at 202.624.8590 or jboehlert@nado.org.

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Senators Press for Increased EDA Funds

April 4, 2008 --On April 4, a group of over 20 Senators sent a letter to leaders of the Commerce, Justice, Science and Related Agencies Appropriations Subcommittee in support of level funding for the Economic Development Administration (EDA) in the FY2009 spending bill.

The letter, which was sponsored by Senators Blanche Lincoln (D-AR) and Susan Collins (R-ME), states that “despite being the only federal agency with the primary mission of helping our local communities create and retain high-quality private sector jobs, EDA is slated for a 53 percent funding reduction under the Administration’s FY2009 budget plan.”

The President’s budget request cuts EDA by $147 million and virtually eliminates the agency’s proven and effective public works program.

Signatories to the letter include Sens. Daniel Akaka (D-HI), Max Baucus (D-MT), Sherrod Brown (D-OH), Robert Casey (D-PA), Hillary Clinton (D-NY), Susan Collins (R-ME), Elizabeth Dole (R-NC), Lindsey Graham (R-SC), Johnny Isakson (R-GA), Tim Johnson (D-SD), Edward Kennedy (D-MA), Patrick Leahy (D-VT), Blanche Lincoln (D-AR), Jack Reed (D-RI), Bernard Sanders (I-VT), Gordon Smith (R-OR), Olympia Snowe (R-ME), Arlen Specter (R-PA), Jon Tester (D-MT), George Voinovich (R-OH), John Warner (R-VA) and Ron Wyden (D-OR).

View of copy of the letter.

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NADO Urges Increased Funding for EDA

April 2, 2008 -- On April 2, NADO President and Executive Director of the Tri-County Council for Western
Maryland Leanne Mazer testified before the House Appropriations Subcommittee on Commerce, Justice,
Science, and Related Agencies. In her testimony, she urged the subcommittee to reject the administration’s proposed funding cut for
the Economic Development Administration (EDA) and increased resources for the agency’s planning and public works
programs. Click Here to view a copy of NADO's testimony.

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Over 60 Sign Letter Requesting Sustained Funding for EDA

March 18, 2008 --On March 14, 61 members of the House of Representatives signed a letter urging leaders of the House Commerce-Justice-Science Appropriations Subcommittee to provide no less than level funding of $280 million for the Economic Development Administration (EDA) in its FY2009 spending bill. The “Dear Colleague” letter was sponsored by Reps. Mike McIntyre (D-NC) and Shelley Moore Capito (R-WV).

The letter states that “despite being the only federal agency with the prime mission of helping our local communities create and retain high-quality private sector jobs, EDA is slated for a 53 percent funding reduction under the administration’s FY2009 budget plan.”

For FY2009, the administration is proposing an overall reduction of $147 million for EDA, leaving the agency with only $132.8 million. The proposal includes $32.8 million for salaries and expenses, an increase of $2 million, and only $100 million for program and project investments. Most significantly, the President’s plan would essentially eliminate the public works program, cutting the account from $148.05 million to only $7 million. By comparison, the President’s FY2009 plan funds EDA at 70 percent below the actual FY2001 level of $439.87 million, with $286.7 million for public works.

Other proposed FY2009 line items include:

  • $27 million for planning, equal to amount required by EDA’s authorization legislation
  • $7 million for public works, $141 million under current level
  • $40 million for economic adjustment assistance, $2.3 million below current level
  • $9 million for technical assistance, roughly equal to current level
  • $2 million for the global climate change initiative established in FY2008, a cut of nearly $7.5 million
  • $14 million for trade adjustment assistance, equal to the current level
  • $1 million for research and evaluations, an increase of roughly $500,000

Representatives signing the letter include Reps. Neil Abercrombie (D-HI), Tom Allen (D-ME), Jason Altmire (D-PA), Tammy Baldwin (D-WI), John Barrow (D-GA), Tim Bishop (D-NY), Earl Blumenauer (D-OR), Rick Boucher (D-VA), Bruce Braley (D-IA), Corrine Brown (D-FL), Shelley Moore Capito (R-WV), Michael Capuano (D-MA),Chris Carney (D-PA), John Conyers (D-MI), Lincoln Davis (D-TN), Charles Dent (R-PA), John Dingell (D-MI), Bob Etheridge (D-NC), Bob Filner (D-CA), Sam Graves (R-MO), Phil Gingrey (R-GA), Phil Hare (D-IL), Stephanie Herseth-Sandlin (D-SD), Brian Higgins (D-NY), Baron Hill (D-IN), Reuben Hinojosa (D-TX), Mazie Hirono (D-HI), Tim Holden (D-PA), Paul Hodes (D-NH), Ron Kind (D-WI), Randy Kuhl (R-NY), Sander Levin (D-MI), Frank LoBiondo (R-NJ), Dave Loebsack (D-IA), Frank Lucas (R-OK), Carolyn McCarthy (D-NY), Jim McDermott (D-WA), Jim McGovern (D-MA), Mike McIntyre (D-NC), Michael Michaud (D-ME), Brad Miller (D-NC), Jerrold Nadler (D-NY), Richard Neal (D-MA), James Oberstar (D-MN), Solomon Ortiz (D-TX), Collin Peterson (D-MN), Nick Rahall (D-WV), Silvestre Reyes (D-TX), Mike Ross (D-AR), John Salazar (D-CO), Bill Shuster (R-PA), Louise Slaughter (D-NY), Zack Space (D-OH), Bart Stupak (D-MI), Betty Sutton (D-OH), Niki Tsongas (D-MA), Mark Udall (D-CO), Tim Walz (D-MN), Peter Welch (D-VT) and Robert Wittman (R-VA).

To view the letter, go to www.nado.org/legaffair/issupdate/fy09edalet.pdf. For more information, contact NADO Legislative Director Jason Boehlert at 202.624.8590 or jboehlert@nado.org.

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EDA Assistant Secretary Testifies Before Appropriations Panel

March 18, 2008 --On March 5, Assistant Secretary of Commerce for Economic Development Sandy Baruah appeared before the House Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies.

For FY2009, the administration is proposing an overall reduction of $147 million for the Economic Development Administration (EDA), leaving the agency with only $132.8 million. The proposal includes $32.8 million for salaries and expenses, an increase of $2 million, and only $100 million for program and project investments. The budget proposal virtually eliminates EDA’s public works program, cutting the account from $148 million to only $7 million. If enacted, the President’s plan would represent a reduction of 70 percent below the FY2001 funding level of $439.8 million.

In his opening statement, Baruah stated that the “President continues to support EDA and our economic development agenda. Given that every government agency would like more resources, the President’s budget request is perhaps less than some would like to see. However, just like our family household budgets, both the President and the Congress must prioritize spending given the very real limits on available funds.”

He added that “EDA will continue to utilize funds currently available to fill vacant positions in 2008, particularly in our regional offices, to reach the agency’s full staff operating level of 175 employees. Of course, maintenance of these staffing levels in 2009 and beyond is dependent on receipt of the President’s requested S&E level.”

According to the President’s budget proposal, EDA maintained an estimated 170 full-time equivalent (FTE) employees in FY2008. This is down nearly 70 FTEs or nearly 30 percent from the FY2002 level of 239.

Baruah also stated that, “EDA plans to allocate the majority of its funds to the Economic Adjustment Assistance program…. This is our most flexible assistance since it provides resources for both infrastructure development and strategic planning.”

The President’s request contains $40 million for economic adjustment, a reduction of $2.3 million.

During the hearing, Subcommittee Chairman Alan Mollohan (D-WV) asked why EDA was seeking an increase in salaries and expenses at the same time its program funding is being reduced. Baruah conceded that the budget would reduce the number of “checks” EDA can write which reduces the number of projects, but technical assistance and service would not suffer.

Mollohan responded, “you really are significantly changing mission,” and added "where the advice is great, but to make these projects go, they often need the EDA, and that's why projects fight so hard for the EDA dollar."

Subcommittee Ranking Member Rodney Frelinghuysen (R-NJ) contended that EDA’s budget request seemed to be “totally out of tune with the economic reality out here.” He added that "we have a huge high regard for the Economic Development Administration from our state perspectives," but "this is really a backing away of EDA's traditional role, and it's highly disturbing."

He also contended that stimulus legislation should do something to create jobs and asked how EDA worked with other agencies if their public works money declined.

Assistant Secretary Baruah responded that the stimulus focused on short-term results, which was not an EDA role, and that the agency’s process could take one to three years.

While the process for funding an EDA public works project can take over a year, from conception to implementation, the agency currently has more than $170 million in funding request for 115 projects that are ready-to-go, according to NADO research. These are projects for which the agency does not have sufficient resources, but with funding these projects could be running within 90 days, and would generate $7.2 billion in private sector investments and retain or create more than 47,000 private sector jobs.

Baruah stated that if the public works program "fell off the face of the earth tomorrow but all the money went into economic adjustment, EDA could still do everything we do today."

Mollohan responded "that you still could do but you wouldn't do," and that if Congress "wanted to ensure that public works money were spent for public works, we'd have to put it in that public works account."

For a copy of Assistant Secretary Baruah’s statement, visit http://www.eda.gov/PDF/SKBWrittenTestimony030508.pdf.

Click Here to access the complete transcript of the hearing. For additional information, contact NADO Legislative Director Jason Boehlert at 202.624.8590 or jboehlert@nado.org.

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EDA Funding Reduced Under 2009 Budget Proposal

February 11, 2008 --The administration's FY2009 budget request contains $8.9 billion in budget authority for the Department of Commerce, including $8.2 billion in discretionary spending, an increase of 18.4 percent over FY2008 due primarily to increased preparations for the 2010 decennial census.

The Economic Development Administration (EDA) is provided $132.8 million, a cut of nearly $147 million. The reduction comes primarily from a cut of $141 million to the public works account. Funding in the budget for specific EDA programs includes:

  • Planning: $27 million, equal to the required level established in the 2003 reauthorization legislation
  • Technical Assistance: $9 million, equal to FY2008
  • Public Works: $7 million, a cut of $141 million
  • Economic Adjustment: $40 million, $2.3 million under FY2008 funding
  • Research: $1 million, an increase of $500,000
  • Trade Adjustment Assistance: level at $14 million
  • Global Climate Change Initiative: $2 million, nearly $7.5 million under current spending

The budget increases funding for EDA's salaries and expenses by $2 million to $32.8 million and states that in 2009 "EDA will continue to place funding priority on investments that drive economic growth, enhance regional competitiveness, and diversify the regional and local economy while also seeing to target funds to our Nation's most distressed communities."

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EDA Assistant Secretary Outlines Vision of Planning Program

October 2007 --On October 23, Assistant Secretary of Commerce for Economic Development Sandy Baruah addressed attendees of the Southwest Regional Executive Director’s Association Conference, which serves the five-state region of the Economic Development Administration's (EDA) Austin office. In his remarks, Baruah outlined his vision and impressions of the planning program and the work of the economic development districts (EDDs).

First, Baruah stated that the planning program is funded at the “highest level in EDA’s history.” Currently, $27 million is provided for the planning program as mandated by EDA’s authorizing legislation. The language was included in the measure through the efforts of NADO and the grassroots support of the EDDs. He added that “not only is the dollar figure for planning higher than it’s ever been, the percentage of EDA’s budget that is devoted to planning is more than twice as much as it was in 2001.” Baruah clarified that as a percentage of EDA’s budget the program has gone from 5.5 percent of the budget in 2001 to 12 percent currently, “more than a doubling.” It is important to note that in real dollars, the planning program has grown only $3 million during this time, and EDA’s over budget has shrunk by $155 million or roughly 35 percent. In addition, the administration is proposing to cut EDA funding by an additional $80 million.

Next, Baruah stated that since 2005, EDA has funded 25 new EDDs, which brings the total number of funded districts to 369. He specified that he would “like to see more support for districts that are newly recognized” and believes that “we shouldn’t treat all districts the same.” He would prefer “to see additional support for those districts experiencing significant sudden and severe chronic distress levels.” He added that “treating all of you the same to me doesn’t make sense – kind of a Soviet-style approach to things.” Since 1970, the district planning grant has averaged roughly $54,000 per year and has not increased in that time. Adjusted for inflation, the planning grant is today worth less than $11,000 and would have to be increased to over $270,000 to keep pace with inflation. In addition, the agency sought the elimination of the district bonus program in the agency’s most recent reauthorization bill, which supported the activities of high-performing economic development districts.

Finally, Baruah stated that the planning program, “while important to overall economic development, simply does not generate the type of quantifiable performance metrics as some of EDA’s other programs.” According to an EDA-funded evaluation of the districts conducted by Wayne State University in 2002, the economic development districts have used their annual EDA planning funds to establish an impressive record of facilitating and leading a regional strategic planning process that “provides the critical backbone for economic development planning at the regional level…EDD activities are both effective and essential to local development.” The report further states that “EDDs very effectively use the EDA funding they receive. They have a strong ability to use that funding to leverage funding from other sources to pursue development activities.”

In addition, according to a Rutgers University report, which is considered the most comprehensive evaluation of EDA programs to date, EDA public works projects are completed on-time, on budget and meet job creation benchmarks because they are subject to a stringent and comprehensive planning process. It is the planning program that ensures EDA projects are high quality.

To access the full text of the speech, visit www.eda.gov/xp/EDAPublic/NewsEvents/Speeches3/baruah/Speech102307SKBLittleRock.xml. For additional information, contact NADO Legislative Director Jason Boehlert at 202.624.8590 or jboehlert@nado.org.

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Commerce Inspector General Critical of EDA's Management of Revolving Loan Fund Program

May 7, 2007 --On March 30, the Department of Commerce's Office of Inspector General (OIG) released a report of its performance audit of the Economic Development Administration's (EDA) internal management of its Revolving Loan Fund (RLF) program. The report encapsulates the result of audits that took place at each of EDA's six regional offices covering the period of September 2004 through September 2005. In addition, the office has conducted 50 audit reports on individual RLF recipients between 2001 and 2006. The report states that despite issues raised by the OIG and "EDA's recognition of serious management problems and needed improvements, EDA has not addressed significant problems that were previously identified."

Overall, the report is critical of EDA's management and operation of the program, not RLF grantees, and echoes the same concerns NADO has regarding the lack of staff to properly oversee the program and lack of proper technical assistance and assistance provided to RLF operators. Specfically, the report criticizes EDA's senior management for not maintaining an adequate tracking and oversight program, not utilizing single audit reports to improve grantee monitoring and "as a result, EDA is operating the RLF program without some of the basic information to provide adequate oversight and management."

In addition, the report found that EDA failed to ensure efficient capital utilization by RLF grantees and did not ensure grantee compliance with reporting requirements.

The report provides a number of recommendations including development of an action plan to address the RLF program's "problems and challenges," require written evaluations by EDA regional staff of appropriate capital utilization percentages for all RLFs, develop policies and procedures that promote a uniform approach to sequestering excess cash, monitor grantee operations by consistently collecting and evaluating required financial report, and developing and implementing a database that catalogs "critical information EDA needs to manage the RLF program and protects its assets."

To access the report, visit www.oig.doc.gov/oig/reports/2007/EDA-OA-18200-03-2007.pdf.

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