TL:DR

• The Economic Development Administration just announced awards to six communities that received $184 million for the Recompete Pilot Program.
• In 2021, RuralOrganizing.org identified The Rebuilding Economies and Creating Opportunities for More People to Excel (RECOMPETE) Act as a unique opportunity to break down barriers for rural economic prosperity.
• The Recompete Pilot Program passed as part of the CHIPS and Science Act in 2022. It offered rare flexible funding in large amounts that was uniquely accessible to rural communities.
• Rural communities face structural barriers to accessing federal funding and very low investment, making it even more important for the Recompete pilot to reach rural communities.
• The first round of Recompete funding is showing unprecedented reach into rural, but needs more advocacy during annual appropriations to show its potential and benefits.
• For more information on the program, listen or read our recent interviews about the Recompete Pilot Program.

What is the Recompete Pilot Program?

The Economic Development Administration just announced awards to six communities that received $ 184 million for the Recompete Pilot Program.

 The brainchild of Congressperson Derek Kilmer, the program was negotiated into the CHIPS and Science Act which was passed into law in August of 2022.

The Recompete Pilot Program relies on economic research from the Upjohn Institute that shows there is about a $30 billion deficit in investment in economically distressed communities, the majority of which are rural. The program chips away at that deficit – it was authorized for up to $1 billion for 5 years in the CHIPS and Science Act and was appropriated one-fifth of that ($200 million) for the first year.

The program targets these investments in economically distressed communities that have for too long been forgotten to create and connect people to good jobs. Target areas are those where prime-age (25-54 years) employment significantly trails the national average, with the goal to close this gap through large, flexible investments that allow local leaders to design solutions to their local issues.

What Does Recompete Have to Offer Rural Communities?

Rural communities are disproportionately economically burdened: nearly nine in ten persistent poverty counties are rural. While Recompete uses a different measure (the “prime-age employment gap”) to target which communities are eligible, 83% of the eligible labor markets are non-metro. Once again, rural/non-metro areas are carrying a heavy economic burden.

A combination of factors has entrenched this rural disadvantage: for one, formula funding – funding which is allocated to communities automatically based on their characteristics, without the need to compete – rarely goes to rural areas. The graphic below illustrates this: blue bars represent more urban areas, and redder bars represent more rural areas, based on the Rural-Urban Continuum Code system used by the USDA. You can see that the vast majority of block grant funding goes to more urban areas.  

Secondly, most funding that is available for rural communities is highly prescribed – it must be used for a water system, or it must be used for a building. These funding opportunities do not reflect what rural communities often need – child care, transportation systems, addiction recovery programs, civic engagement/governance, and local coordination programs are some of the biggest needs identified by rural communities. In rural communities with fewer flexible funding options, Recompete presents a rare opportunity for local leaders to truly design solutions of interconnected social, workforce, and physical infrastructure that meet the local context.

Third, rural communities face inherent challenges in capacity and people’s power to access funding. Most funding is structured as a competition, which requires insider knowledge of what is coming well in advance and grant writing and technical expertise that is often stretched very thin across wide geographies in rural America, while more population-dense areas have access to more human resources. Finding matching funds is more difficult when there is a smaller tax base because of a smaller population and because the density of philanthropic entities is lower. Relationships with agency officials still make a very large impact on funding decisions, and those relationships continue to be disproportionately held by people who have historically held power – folks with privileges related to wealth, race, and gender. In rural communities, it can be harder to get past these invisible barriers when a social landscape sees fewer people holding more powerful roles.

What’s Happening with Recompete Now?

TODAY: Implementation grants of $20 M to $40 M were announced! Six awardees received tens of millions each to implement interconnected projects that support workers and families in communities facing economic distress. Half of these grantees are rural!

While the full RECOMPETE program was designed to be formula funding, automatically allocated to communities that qualify, the pilot program was a pared-down version passed in the CHIPS and Science Act in August of 2022. The pilot was authorized for 5 years as a competitive program, and was authorized for $1 billion with this amount subject to the annual appropriations process. While the first year was fully funded at one-fifth of $1 billion ($200 million), the pilot program was only appropriated $41 million for the second year, and current appropriations negotiations seem to indicate the funding level could be the same for 2025. 

The initial round of the two-part application process was launched in 2023. An unprecedented number of applications came in, setting a record for any Economic Development Administration program with 565 applications! RuralProgress supported 36 communities to pursue the program and six of those communities were able to submit competitive applications. One of the communities we have worked with – Washington State’s North Olympic Peninsula – is receiving an implementation grant!

Phase I selected grantees to receive planning grants, called “Strategy Development Grants,” or SDGs. Twenty-four communities received these grants in the amount of $450,000 each. Fourteen, or 58%, of these SDG awardees included rural communities – an incredible reach to rural for a federal program!

Phase I also selected 22 finalists who could apply for Phase II implementation funding. These are the awards that were announced today (August 5th, 2024). Ten, or 45%, of these finalists include rural communities in their region, and three rural proposals were awarded.. Details about the applications, including the acute need to invest in care economies in communities facing economic hardship, can be reviewed on EDA’s website, here.

Recompete is Already a Win for Rural America.

With 565 applications, six awards is clearly not enough. But rural communities are seeing new traction in federal economic and community development funding with half of the awards going to rural communities. We can see the path to rural prosperity through this pilot program’s initial run.

The submitted applications point to a new era of economic development that focuses on building great environments for workers, rather than tax breaks for corporations. About a quarter of the $800 million in investments requested by implementation grant finalists were targeted toward social and wraparound services such as child/elder care and transportation, some of the key social infrastructure gaps holding rural communities behind.

We are so excited to celebrate the Recompete Pilot Program as a federal government initiative addressing many long-held economic disadvantages faced by rural communities. Congratulations, Kentucky SOAR, North Olympic Peninsula Recompete Coalition, and Wind River Development Fund!

To learn more about the Recompete Pilot Program, read our recent interview in Barn Raiser or listen to our recent podcast interview with Rural Remix.