Tomorrow morning, the Senate Committee on Environment and Public Works is holding a hearing entitled “Reauthorization of the Economic Development Administration (EDA): State and Local Perspectives." The committee will hear testimony from local economic developers about the implementation of projects funded by the American Rescue Plan Act (ARPA), the state of EDA’s programming, and what resources communities need going forward.
The EDA, whose congressional authorization lapsed in 2008, is in need of updates to its statutory authority. New industries and trends have emerged in the last 15 years and communities need assistance navigating the challenges associated with the modern economic landscape. However, given the billions in supplemental funding the agency has received from Congress in recent years, reauthorizing legislation will be meticulously negotiated.
Here are some potential changes to look for in the legislation when it’s introduced later this year:
Capacity building resources: Many communities don’t have the financial or human resources to plan or implement development projects, or even apply for federal funding. EDA’s Partnership Planning program and Economic Recovery Corps supplement local planning capabilities, but funding is spread thin.
Improved disaster recovery authority: From funding for post-disaster recovery planning to public works construction, EDA plays a critical role in disaster recovery. In the last 5 years, Congress has appropriated almost $2 billion for EDA disaster recovery efforts. With the increasing frequency of natural disasters, EDA needs more flexible authority to quickly deploy staff and assist communities in economic recovery from disasters.
Cost share and eligibility reform: Several of EDA’s programs require grant recipients to contribute up to 50% of the total cost of a project. Further, eligibility for certain programs is predicated on an applicant’s area experiencing “economic distress” – an unemployment rate 1% or more than the national average or per capita income 80% or less than the national average. Stakeholders have been advocating for an increased federal cost share to alleviate the financial burden on severely distressed areas.
Codification of CARES and ARPA programs: The demand for supplemental EDA funding during the pandemic was extremely high. Programs like the Build Back Better Regional Challenge; Travel, Tourism, and Outdoor Recreation program; and the Good Jobs Challenge received thousands of applications. Expect lawmakers to permanently authorize at least one of these popular COVID-era programs.
University Center expansion: EDA’s University Center program provides funding to schools across the country to provide research and technical assistance to develop and support regional strategies that result in job creation, skilled regional talent, and business expansion. There are currently 70 EDA University Centers covering 46 states and territories and calls for additional resources and centers have been growing in recent years.
This is only a sampling of the potential changes to EDA’s statutory authority and programming. Significant supplemental funding provided to EDA during the pandemic resulted in a higher profile for the agency, which has led to a more applicants and a more competitive grantmaking process. In what’s looking to be a tight fiscal year, advocates will need an edge to affect what’s included in the enacted legislation.