The Appalachian Regional Commission just released a new study to the nation's governors at their winter meeting in Washington DC. It is an important addition to the on going debate about the future of federal grant-in-aid programs. Read the summary of the report on this site. This report has been 40 years in the making.
During the 1970's, Kentucky was one of the national leaders in defining regional economic development. Governor's Wendell Ford and Julian Carroll worked with over 20 primary federal agencies to pull in money for local and regional projects.
The governors had three federal power agencies that lead the way in Kentucky infrastructure and planning efforts. These were (1) Housing and Urban Development (HUD) (2) Economic Development Administration (EDA), and (3) Appalachia Regional Commission (ARC). These were the "glue money" federal agencies that could be used with federal and or state, local to wrap a project with matching monies.
From 1972 through 1980, hundreds of millions of federal dollars flowed into Kentucky communities from these three agencies. During this time, Kentucky state government, the 15 Area Development Districts (ADDs), and local governments joined in a special partnership with the federal government to coordinate all economic funding. Kentucky was the national leader for this new definition of regionalism. It was called Integrated Grant Administration or IGA for short. The IGA was possible due to the new federal law called Joint Funding Simplification Act..
This unique federal experiment with Kentucky was severely slowed in 1980 with the elections of President Reagan and Kentucky Governor John Y. Brown. In their ways, both men failed to see the 1970's vision of federalism and states as economic development partners.
President Reagan worked to cut the size and function of federal government. All through his administration, pressure was mounting to kill off HUD, EDA, and ARC. Only through efforts from Democratic Congresses did the budgets of these agencies survive.
Governor Brown's approach to state management was to undertake a massive cutting of state services and programs. Under his approach some 10,000 state workers were fired or organized out of their jobs. This was the time that federalism in Kentucky started to unravel.
In 2015, all three federal agencies are still in place, but operating with only a shell of who they once were. By 2016, the winner of the next presidential race will decide whether regionalism and federal state partnership will work or become another failed attempt at modernizing America