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Summary of the President's FY 2008 Budget Request for ARC

October 2007


The President's Budget requests $65 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 08 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.

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. ARC continues to oversee the development of this system and will complete a new cost estimate in FY 07.

Area Development
The request includes $54.087 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. ARC also expects to support strategies that will capitalize on the Region's abundant energy assets to promote job creation in the energy sector, including energy efficiency, conventional fuels, and renewable energy.

For local development districts the budget provides $5.316 million.

Performance targets for FY 08 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 $5.597 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 2006
Area Development
Local Development Districts
Salaries and Expenses
Total ARC
* Assumes enactment of House-passed long-term continuing resolution H.J. Res. 20. ARC is operating through February 15 under a cut of roughly 45 percent.