Blueprints for rural progress: Report outlines critical need for federal development funding

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Take away USDA Rural Development dollars and you start taking away small town assets, such as nursing homes, hospital expansions, access to affordable housing, wastewater infrastructure, and business development. Minnesota 2020’s latest report, Blueprints for Rural Progress highlights the importance of these community development programs in sustaining a strong rural way of life.

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Congress is currently rewriting the farm bill, which includes rural development funding, in a climate of sequester-induced, across-the-board federal budget cuts. Depending on how deep Rural Development cuts are in the next farm bill, Minnesota communities will have a tougher time financing these programs.

Potential cuts come after a decade of already dwindling USDA Rural Development resources. Annual appropriation slashes and sequester have reduced Minnesota development staff by one-third (32 percent) from FY 2003 to FY 2013.

Minnesota’s annual federal development dollars fluctuate greatly, depending on state needs, funding availability, and a number of other factors. Here’s some perspective, however. The state receives in the neighborhood of $630 million to $760 million in annual grants and loans, according to Minnesota’s USDA Rural Development office. Dollars typically fund the state’s smallest communities, most of which lack the tax base and population to afford infrastructure upgrades and development projects on their own. Funds cover programs in seven categories: business assistance, energy, housing, community facilities, water and sewer, utilities, and community/regional development.

These dollars aren’t handouts, but investments in rural communities that return dividends in the form of business growth, expanded access to health services, and population stability.

Blueprints for Rural Progress makes the following policy recommendations:

  • Policymakers should consider the value USDA Rural Development programs produce for rural economies when evaluating farm bill funding.
  • Rural communities should prepare for cuts and work with congressional officials to reduce their impact.
  • State policymakers must prepare to counteract looming federal cuts by increasing capital bonding in the 2014 legislative session, with particular attention to Greater Minnesota projects.