SSTI EditorialNew SACI Report Reflects Objectives of Most TBED Efforts

Many community and economic development professionals believe the report released last Tuesday should have predated the President's 2006 Budget to consolidate or eliminate 18 federal programs used by most parts of the country to support growth and well-being (see the Feb. 14 issue of the Digest). Among those targeted in the move are the Community Development Block Grants (CDBG) and the entire Economic Development Administration (EDA) slate of grant programs. What was proposed in the Administration's budget request was a smaller program called Strengthening America's Communities Initiative, or SACI for short.

Few details on SACI were released with the budget request other than the new program would be administered by the Department of Commerce, providing opponents to the change with easy ammunition to fight the proposal as Congress considered next year's appropriations. As a result, the House endorsed the status quo, stating there was no authorizing legislation to support the requested funding level (see the May 30 issue of the Digest). That rationale left open the door for the Administration to present a reasoned plan for why the change was necessary.

The July 2005 report from the 17-member SACI Advisory Committee provides the Administration's plan in three components: findings based on three public hearings held in April, May and June; guiding principles for the dramatic shift in federal support and policy; and, recommendations for approaches to address the needs identified in the findings. Twenty recommendations are then grouped by three themes:

• Bringing Federal Policy Into the 21st Century - reflecting the regional component of innovation systems; requiring long-term, innovation-based strategies; coordinating workforce development with innovation strategies; and, promoting public-private partnerships and co-investment. Federal programs, policies and regulations would be reviewed for impacts on sustainability and competitiveness of regions.
• Targeting Need and Responding to Opportunity - revising eligibility and allocation criteria to reflect measures of competitiveness and need; phasing in results-oriented competitiveness to all federal grant/funding assistance within 10 years; and eliminating all entitlement grants and formula programs.
• Assuring Flexibility, Accountability, and Results - establishing a cabinet-level, inter-agency council to coordinate federal community and economic development activities; identifying best practices and reporting on results of federal investments; recognizing emerging, self-defined economic regional boundaries and harmonizing federal designations for consistency; developing robust analytical tools to allow regions to measure needs and progress; requiring and rewarding co-investment from nonfederal sources but allowing exceptions and a sliding scale for areas with high(er) distress; allowing subregional organizations to apply for funds directly so long as activities are consistent with the adopted regional strategy; creating means for sharing best practices; and partnering with educational institutions and nonprofit associations for local and regional capacity building.

Of course, the consolidation and elimination of programs deemed to duplicate or overlap other programs remains a core element of the plan, but the report recognizes significant changes to the present, entrenched CDBG/EDA system must be implemented more gradually.

In all, there appears to be little in the report that should stir opposition from state, regional and local tech-based economic development practitioners. In fact, much can be embraced. As the report discusses the need for federal economic development policy to enter a new era, the tech-based economic development (TBED) community already is working toward policies and practices improve regional innovation systems and strengthen global competitiveness.

TBED practitioners should not be complacent or smug. While more traditional economic and community development programs would experience considerable angina if the SACI recommendations were to be implemented, many existing TBED programs also are not prepared to really compete for federal funding. There is need for change or improvements on all levels of U.S. economic development policy.

An announcement this past week by Senators Joe Leiberman (D-CT) and John Ensign (R-NV) that they will be introducing legislation addressing the recommendations of the National Innovation Initiative (see the Jan. 10 issue of the Digest) suggests Congress is ready to discuss real change to federal economic development policy. Elements of NII can be found throughout the SACI report so the bill could present an opportunity for SACI proposals to advance.