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Summary of the President's FY 2005 Budget Request for ARC


The president's budget requests $66 million for ARC's community and economic development programs. This represents level funding for the agency. The Commission's programs focus on reducing Appalachia's isolation by constructing the Appalachian Development Highway System and expanding the Region's telecommunications capacity. They seek to improve Appalachia's economic competitiveness by overcoming the Region's major deficits and building on its assets. ARC accomplishes this by strengthening basic infrastructure, improving the employability of Appalachian citizens, and helping diversify the regional economy.

The Commission will emphasize coordination of economic development activities among federal agencies and will leverage other public and private dollars for regional economic development. It will continue targeting its resources to the Region's most economically distressed counties.

Appalachian Development Highway System
The Transportation Equity Act for the 21st Century (TEA-21) authorized $450 million annually from the Highway Trust Fund for the Appalachian Development Highway System. ARC continues to oversee the development of this system. The President's SAFE-TEA proposal calls for funding the ADHS at $450 million annually.

Area Development
The request includes $54.72 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 fiscal year 2005 funding to address compelling needs and build on regional assets that support job creation in five major areas: providing clean water to Appalachian communities; expanding access to high-speed broadband; moving toward parity with the nation in educational attainment; reducing the disparity between Appalachia and the rest of the country in the rates of certain chronic diseases; and capitalizing on Appalachia's cultural heritage and natural beauty.

For local development districts and the Commission's technical assistance and research activities, the budget provides $6.24 million.

Salaries and Expenses
To carry out these activities, the budget request for salaries and expenses is $5.04 million. 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 2003
Actual
2004
Estimate
2005
Request
Change
Area Development
59,914
54,667
54,721
+54
LDDs and Technical Assistance
6,259
6,237
6,240
+3
Salaries and Expenses
4,654
4,707
5,039
+332
Total—ARC
70,827
65,611
66,000
+389