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Summary of the President's FY 2007 Budget Request for ARC

February 2006


The President's Budget requests $64.817 million for ARC's community and economic development programs. This represents level funding for the agency. The Commission's programs are designed to help the 13-state Appalachian Region achieve socioeconomic parity with the nation. FY 07 activities will advance the four goals of ARC's strategic plan: 1) increasing job opportunities and per capita income; 2) strengthening the capacity of Appalachia's citizens to compete in the global economy; 3) improving the Region's infrastructure to make Appalachia economically competitive; 4) building the Appalachian Development Highway System to reduce the Region's isolation.

ARC will work with its State and local partners in creating a Challenge Grant for Regional Innovation. These grants will be awarded to distressed communities that have shown potential to increase economic opportunity or to remove economic development barriers and will include performance measures to track a community's progress.

Appalachian Development Highway System
The Safe, Affordable, Flexible, Efficient Transportation Equity Act—A Legacy for Users (SAFETEA-LU) authorizes $470 million annually from the Highway Trust Fund for the Appalachian Development Highway System (ADHS). ARC continues to oversee the development of this system and will complete a new cost estimate in FY 07.

Area Development
The request includes $54.079 million for Area Development. At least half of this amount will benefit severely distressed counties and areas. While final program decisions will be made jointly by the Federal Co-Chair and the Appalachian Governors, the Commission expects to continue ARC's special focus on expanding access and use of telecommunications; reducing the gap in college-going rates between Appalachia and the nation; and diversifying Appalachia's economy by emphasizing the region's unique assets, such as its natural resources, rich cultural heritage, and existing physical structures.

For local development districts the budget provides $5.301 million.

Performance targets for FY 07 include: create/retain 20,000 jobs; position 20,000 Appalachians for enhanced employability; provide 20,000 households with basic infrastructure services; build 25 miles of the ADHS; leverage $4 of private investment for every $1 of ARC funds for job-creating projects.

Salaries and Expenses
To carry out these activities, the budget requests $5.437 million for salaries and expenses. Increases primarily reflect cost-of-living adjustment for agency staff; the budgeted staffing level remains constant at 59 FTEs.

Budget Summary
($ thousands, including rescissions)

ARC Program 2005
Area Development
Local Development Districts
Salaries and Expenses
Total ARC