Urban Wire Three Ways Congress Can Ensure a Little-Known CHIPS Act Program Benefits Rural Communities
Corianne Payton Scally, Anne N. Junod
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Rural community

President Biden recently signed the bipartisan CHIPS and Science Act into law to boost economic development. Embedded within the 1,000+ page legislation is a pilot program targeting investments in places that have experienced persistent economic decline.

The Distressed Area Recompete Pilot Program (RECOMPETE Pilot Program) is a historic investment of $1 billion to help what it calls “distressed” communities—places with a high local employment gap and lower household incomes compared with the national average—pursue comprehensive economic and workforce development initiatives. The program includes the following to help areas with limited capacity address their communities’ needs:

  • technical assistance and planning grants to help communities create competitive proposals and implementation plans
  • sustained, multiyear support
  • flexible funding for locally determined priorities

The program offers particular promise for rural communities—many of which have been hit hard by historic industry and job losses and have experienced slower recovery from macroeconomic crises like national recessions and inflation. Over the past 20 years, rural counties also experienced slower population growth and lost a higher share of prime-age workers than suburban or urban areas, compounding longer-term economic challenges.

The RECOMPETE Pilot Program could change the futures and fortunes of many of these communities. But without targeted criteria that prioritize rural communities and measure their success, rural communities could be left out. The following three approaches could help ensure the pilot is mobilized and tested to benefit rural communities.

  1. Make a rural guarantee

Rural areas often struggle to access competitive funding when they’re up against better-resourced urban areas that have greater capacity to compete. Without setting clear resource targets to ensure smaller rural communities have an equitable chance at winning, federal investments may not benefit them.

House and Senate appropriations committees can consider two strategies to ensure RECOMPETE resources reach rural communities.

•   Targeting a share of available resources to persistent poverty areas. Eighty-five percent (PDF) of persistent poverty counties are nonmetropolitan. Precedents for targeting resources to these economically distressed areas include the current bipartisan 10-20-30 funding formula (PDF), which requires 10 percent of resources to go to communities where at least 20 percent of the people have experienced poverty for at least 30 years. The US Department of Agriculture (USDA) StrikeForce program has similarly prioritized nonmetropolitan areas experiencing persistent poverty.

•   Prioritizing rural industries for resilience investments. Though both rural and urban areas have experienced industrial decline, rural job loss is concentrated in key sectors, including resource extraction and other labor-intensive, often dangerous work like coal, oil, and gas development; minerals mining; timber development and logging; and agriculture-related manufacturing. And as many rural communities look to diversify their economic bases beyond no longer viable, unwanted, or unjust land uses (e.g., for extractive industries or the prison industry—which both disproportionately operate in rural communities), rural areas need investments in different avenues for development to support thriving, asset-based economies.

Appropriations committee members can look to other federal investment precedents that prioritized industry-specific losses that disproportionately affect rural communities.

  1. Promote rural inclusion in all eligible areas

Rural economic and labor markets vary regionally, so federal policymakers should consider encouraging communities to work together at the scale that aligns with their economies and proposed solutions. Some rural communities will fall within RECOMPETE-defined “labor markets”—metropolitan or micropolitan statistical areas, commuting zones, or tribal lands. These areas can work with neighboring towns, suburbs, and cities to bring jobs and economic growth to their entire region.

Other rural places located further from cities will fall outside a “labor market” and instead meet RECOMPETE’s criteria for a “local community.” These communities can collaborate across counties or within them to plan for regional economic development, and appropriations committee members can consider targeting a certain portion of pilot resources for rural “local communities.”

As precedent, Congress can look to prior federal efforts to promote rural-inclusive regional development planning, such as the US Department of Housing and Urban Development’s Sustainable Communities Initiative that focused on bolstering regional infrastructure to support social and economic development, and the USDA’s Stronger Economies Together program supporting asset-based, multicounty economic development planning.

  1. Incorporate learning, evaluation, and data to measure success

Funds committed to promoting learning and evaluating implementation from the start will allow grantees to apply evidence-based lessons in real time. This could help ensure better outcomes along the way rather than waiting for a summative evaluation at the end of the pilot period.

To define success and measure pilot outcomes, federal policymakers should consider a wide variety of metrics. This means going beyond the traditional measures, such as the number of jobs created and retained, and studying who is benefiting from the funding and explicitly tracking data on equity. It also means using quality, nationally available rural data, which can be hard to find, and assessing community assets rather than just tracking deficits.

The RECOMPETE Pilot Program is a historic opportunity for federal economic resilience investments to serve rural communities—but only if Congress can prioritize these communities through program funding, implementation, and evaluation. A successful, geographically representative pilot will pave the way toward inclusive scaling of the full program to reach more communities.

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Research Areas Neighborhoods, cities, and metros
Tags Community and economic development Community data use Economic well-being Rural people and places
Policy Centers Metropolitan Housing and Communities Policy Center
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