C t.2* IHHHHHBHH^H FEDERAL ADVISORY COUNCIL > x REGIONAI ECONOMIC DEVELOPMENT SIXTEENTH MEETING-AUGUST 18, 1978 WASHINGTON, D.C. FEDERAL ADVISORY COUNCIL ON REGIONAL ECONOMIC DEVELOPMENT SIXTEENTH MEETING-AUGUST 18, 1978 Juanita M. Kreps Secretary of Commerce and Chairman Federal Advisory Council Lawrence 0. Houstoun, Jr. Special Assistant to the Secretary and Executive Secretary Federal Advisory Council U.S. Department of Commerce WASHINGTON, D.C, Digitized by the Internet Archive in 2012 with funding from LYRASIS Members and Sloan Foundation http://archive.org/details/federaladvOOfede Table of Contents Page Introduction v Federal Advisory Council on Regional Economic Development Members of the Council vii Participants at the Meeting ix Agenda xi Opening Remarks 1 Lawrence O. Houstoun, Jr. Special Assistant for Regional Economic Coordination Development of Coastal Plains Regional Economic Plan Introductory Remarks 9 Dr. Claud Anderson Federal Cochairman Analysis of the Plan 10 James Butler Executive Director Coastal Plains Regional Commission Richard M. Poythress Planning and Evaluation Director Coastal Plains Regional Commission General Discussion by Executive Agency Participants and Regional Commissions Department of Transportation 19 Small Business Administration 21 Department of the Army 23 Department of Health, Education and Welfare 26 Department of Labor 27 Department of Energy 30 Department of Housing and Urban Development 34 Southwest Border Regional Commission 37 Four Corners Regional Commission 38 Upper Great Lakes Regional Commission 39 CONTENTS- Continued APPENDICES Page Appendix A — Written Statements of Executive Agencies and Regional Commissions Department of the Army 44 Department of Energy 45 Department of Health, Education, and Welfare 49 Department of Housing and Urban Development 51 Department of Labor 53 Department of Transportation 55 Environmental Protection Agency 56 Small Business Administration 59 Appalachian Regional Commission 61 Pacific Northwest Regional Commission 62 Southwest Border Regional Commission 63 Appendix B — Written Statements of Department of Commerce Units Consultants to the Office of Regional Economic Coordination 66 Bureau of Economic Analysis 85 Economic Development Administration 87 Industry and Trade Association 89 Travel Service 90 Appendix C — Executive Order No. 1 1386, Dated December 28, 1967, Establishing Federal Advisory Council on Regional Economic Development 92 INTRODUCTION The Federal Advisory Council on Regional Economic Development met on August IX, 1978, to formally review the revised and updated regional development plan prepared by the Coastal Plains Regional Commission. The Commission's five-year comprehensive development plan was approved in 1971 by the Secretary of Commerce. At the time, the region included parts of Georgia, North Carolina and South Carolina. In the intervening years, the boundaries of the region have been extended to include additional counties in Georgia and South Carolina and parts of Florida and Virginia. The changes brought about by the extension of the region's boundaries also required changes in the Commission's earlier goals, objectives, and strategies. The plan under discussion in these proceedings addresses these changes. The Advisory Council in reviewing the Coastal Plains plan is discharging one of its most important responsibilities, as provided for in Executive Order 11386 which established the Advisory Council. The Council is composed of Federal agencies charged with administering domestic development programs and provides guidance on regional matters to the eight regional commissions organized under Title V of the Public Works and Economic Development Act of 1965 (Act). The Coastal Plains Regional Commission intends to examine all the comments and recommendations it has received through the review process and will consider how they can be used to strengthen the plan. Once the plan is approved by the Secretary, the Act provides that it be transmitted to the President for such action as he deems appropriate. -&> MEMBERS OF THE FEDERAL ADVISORY COUNCIL ON REGIONAL ECONOMIC DEVELOPMENT Juanita M. Kreps Secretary of Commerce (Chairperson) Bob Bergland Secretary of Agriculture Clifford L. Alexander, Jr. Secretary of the Army Joseph A. Califano, Jr. Secretary of Health, Education and Welfare Patricia Roberts Harris Secretary of Housing and Urban Development Cecil D. Andrus Secretary of the Interior F. Ray Marshall Secretary of Labor Brock Adams Secretary of Transportation A. Vernon Weaver, Jr. Administrator Small Business Administration Robert W. Scott Federal Cochairman Appalachian Regional Commission Claud Anderson Federal Cochairman Coastal Plains Regional Commission F. Kenneth Baskette, Jr. Federal Cochairman Four Corners Regional Commission J. Joseph Grand ma ison Federal Cochairman New England Regional Commission George D. McCarthy Federal Cochairman Old West Regional Commission Patsy Ann Danner Federal Cochairman Ozarks Regional Commission Patrick J. Vaughan Federal Cochairman Pacific Northwest Regional Commission Cristobal P. Aldrete Federal Cochairman Southwest Border Regional Commission William R. Bechtel Federal Cochairman Upper Great Lakes Regional Commission vn Federal Advisory Council participants listening to a discussion ot the Coastal Plains Plan PARTICIPANTS AT THE MEETING OF THE FEDERAL ADVISORY COUNCIL ON REGIONAL ECONOMIC DEVELOPMENT August 18, 1978 The meeting was called to order by Mr. Lawrence O. Houstoun, Jr., Special Assistant to the Secretary for Regional Economic Coordination and Executive Secretary of the Council. Donald L. Dillon Deputy for Policy and Planning and Legislative Affairs Department of the Army Joe D. Auburg Corps of Engineers Department of the Army Robert M. Rauner Acting Deputy, Office of Regional Economic Coordination Department of Commerce Elizabeth Buffum Policy Assistant to the Assistant Secretary Department of Energy David Siegel Special Assistant to the Deputy Under Secretary Department of Health, Education, and Welfare Bernard Manheimer Program Coordinator Office of Community Planning and Program Coordination Department of Housing and Urban Development Richard G. Seefer Labor Economist Department of Labor Karolyn A. Reynolds Field Coordinator Office of Intergovernmental Affairs Department of Transportation William R. Etheridge Economist Office of Economic Research and Statistics Small Business Administration Claud Anderson Federal Cochairman Coastal Plains Regional Commission James Butler Executive Director Coastal Plains Regional Commission Richard M. Poythress Director Planning and Evaluation Coastal Plains Regional Commission Tony Magoulas Special Assistant to the Federal Cochairman Coastal Plains Regional Commission Gregory Higgins Economic Development Specialist Department of Administration State of Florida Stuart Huntington Special Assistant to the Federal Cochairman Four Corners Regional Commission Trafton Bean Planning Consultant Four Corners Regional Commission William P. Butler Executive Assistant to the Federal Cochairman Southwest Border Regional Commission Claudia Cappio Summer Intern to Planning/Research Specialist Upper Great Lakes Regional Commission AGENDA FOR SIXTEENTH MEETING OF THE FEDERAL ADVISORY COUNCIL ON REGIONAL ECONOMIC DEVELOPMENT Review of Coastal Plains Regional Plan August 18, 1978 Moderator: Robert M. Rauner Acting Deputy, Office of Regional Economic Coordination Time: 9:00 a.m. — 12 noon Place: Room 4830 Main Commerce Building Opening Remarks: Lawrence 0. Houstoun, Jr. Special Assistant to the Secretary for Regional Economic Coordination Discussion of Coastal Plains Regional Plan: Claud Anderson Federal Cochairman Coastal Plains Regional Commission James Butler Executive Director Coastal Plains Regional Commission Richard M. Poythress Planning and Evaluation Director Coastal Plains Regional Commission Agency Comments: Representatives of FACRED Follow-up Procedures to FACRED Review: Robert M. Rauner Closing Remarks: Robert M. Rauner Lawrence O. Houstoun, Jr., Special Assistant to the Secretary for Regional Development. Dr. Claud Anderson, Federal Cochairman of the Coastal Plains Regional Commission OPENING REMARKS Mr. HOUSTOUN: Good morning. We are pleased to have you here. One of the minor reforms we have managed to accomplish to indicate Commerce's increasing support for the regional commissions is to move this meeting out of that basement game room where we were the last time. Claud, we have you up here now with these captains of industry on the wall. I am sorry I was not able to get the room with Herbert Hoover's picture in it, but we will do better next time. Other than saying this is a signal event in the progress, not only of the Coastal Plains Commission but also in the Administration's policy development process, I thought I would take a minute to familiarize you with where we stand on the legislation, our meeting with the National Governors Association later this month, and associated questions. As you know, the Administration has on hand about a dozen applications from individual states and groups of states that want to form commissions under this legislation. In response to those applications, the Administration decided last year to do three things: First, to assure that the question was, as the statute on this subject suggested it should be, discussed and aired in full at the White House Conference on Balanced National Growth and Economic Development. That was done. I think you are all familiar with the messages that came back on that, both from the standpoint of shared responsibility among levels of Government, the specific statements with respect to multistate regionalism, the support that the regional commission concept had and associated responses and recommendations. The second thing the Administration said would be accomplished was an evaluation. There had not been an evaluation of the Title V Commissions for several years, either official or unofficial. A review was made of all of the evaluations. (Bob, if you have ndt, I would appreciate it if you would share with these people that summary of the evaluations that Ralph Widener put together for us.) That evaluation was led by Dr. Ben Chinitz of the State University of New York. It has been completed and has been entered into the policy process. The third thing is that the Administration has set up a special policy task force on this subject under the leadership of Presidential Assistant Ann Wexler involving OMB, Appalachia, the Commerce Department — I might add, various wings of OMB — and Assistant to the President Jack Watson's office. That task force is now coming nearly to the end of its work; which is to say, there is a draft task force report in semi-final form. We are using that as the basis for our presentation to the Governors at the National Governors' Association meeting on August 27th. Following that consultation with the Governors, particularly with Governor Dupont's Committee on Community and Economic Development, a final decision memo will go to the President reflecting the suggestions, questions, comments, concerns, that the Governors raise at that time. We are committed to Chairman Randolph to send legislative suggestions to the Hill by the middle of September. That will be a very tight schedule, but I believe we are going to make it. We will make it with time for due deliberation within the Administration and time for a Presidential decision memo. We have had a number of discussions with Governors and Governors' staffs over the last couple of weeks. Indeed, I will not be able to be with you during the entire meeting this morning, because I must leave for Vail, Colorado, where WESTPO is meeting. We expect about a half-dozen Governors there. We expect we will be having two meetings on Saturday morning just to discuss where the Administration wants to go on regional commissions. I met yesterday with Governor Byrne. Meg Armstrong and I will be meeting with Governor Dupont, who is the Chairman of the Committee on Community and Economic Development. Meetings should be held with Governor Rockefeller, Governor O'Callahan, Governor Milligan, Gover- nor Carroll and others, over the next couple of weeks. Basically, the task force report at this time proposes that the Administration extend and modernize the regional commission program and legislation in the following ways: Make opportunities available for all 50 States to become part of a new program of multistate commissions which would become operational with passage of the reauthorization amendments in 1979 in a program that is somewhat different from the present one, drawing on the best experiences since 1965. The commissions would be multistate; they would be, to the extent feasible, whole States. It would provide a continuing opportunity for States to participate in Appalachia. It would expand the missions of the commissions to make clear that they are authorized to deal with problems of rapid growth, as well as economic decline; to deal with urban problems, as well as with non-metropolitan problems; to support the Administration's export policy, urban policy, and energy policy; and to accelerate the program toward unifying the development programs and planning for development programs within States between States and regions, and between States and substate planning and development organizations. I think the last three are particularly important. There will be greater emphasis on export policy, on urban policy, and on coordination of development and development planning programs — but all of these within the context of regional priorities. There will be no requirement that any specific region address any of those except insofar as they reflect the priorities of the Governors and the Federal Cochairmen. There will be a continuation of the general organizational structure of Governors and Federal Cochairmen and specific encouragement for meeting regional problems or interstate problems which cross regional boundaries — which is to say that we are respecting the fact that even the best drawn boundaries are not perfect for every purpose. In order to facilitate coordination between let us say, New York, Vermont and Massachusetts on a problem common to them, there would be sufficient encouragement and opportunities for interregional cooperation. The task force is recommending that the Administration provide additional support for the regional commissions in at least three ways: First, the mission of the White House Interagency Coordinating Council, presently used for urban activities, would be expanded. The President signed an authorizing Executive Order this week which has been used thus far for the support of urban policy. The Council is chaired by Presidential Assistant, Jack Watson. It would have among its additional responsibilities support for the regional commissions. Secondly, Commerce Department sources, including those relevant to export policy, issues of productivity, technology, commercialization, tourism, and subnational economic and demographic data and analytical support would provide additional assistance. Thirdly, support would be provided through organizational links to the Federal Regional Councils, whose missions would be more sharply focused on support for regional, State and local development programs. By "organizational support/' I mean a variety of approaches, such as the Federal Cochairmen being invited to serve as members of FRC's and, in some cases, having the President appoint Federal Cochairmen as the chairs of Federal Regional Councils. We can see some interest in that in a couple parts of the country. In the latter case, no such codesignation would occur without the concurrence of the commission affected. I think that probably hits the highlights. As I did that without notes, it means I have probably forgotten some important points. Bob, is there one that occurs to you that we may not have touched on? I welcome the opportunity for a couple of minutes to answer questions on any of this for clarification purposes. I am particularly concerned about clarifying any issues that you may have with respect to the FRC's because the interpretation of the FRC proposal in its very earliest form seems to have outrun the realities of the proposal; which is to say, it is very flexibly phased and of varying application. We are looking for different kinds of relationships with the FRC's that make the most sense, and there is no proposal to force any special relationship on the commissions — simply an opportunity to see which appears to work best in order to support the commissions best. I should add one thing; concurrent with this there has been an Administration task force on Federal Regional Councils. That task force report is just coming to its conclusion at this time. It looks at the FRC question in greater depth and from different perspectives. I think, however, that it pretty much comes to the same conclusion; this interrelationship in some phased and/or varying treatment during an experimental period would make the most sense. Can I answer any questions for you? Yes? Mr. SIEGEL: Given HEW's position on the FRC's in that report, which was to abolish the FRC's, and given the fact that the FRC's problems are a lot of times based on the fact that there is centralization in the programs, how would linking these economic development commissions be strengthened by linking them with FRC's which basically have been very weak? Mr. HOUSTOUN: Do you mean, the regional commission to the FRC's? Mr. SIEGEL: Yes. How would that strengthen them? Mr. HOUSTOUN; Let us start with the assumption that it is still possible the HEW position would become the Administration position, in which case the issue is moot. On the other hand, it may be felt that there are values to decentralization that the Administration has not fully investigated, that the FRC's have need for special purposes, such as the expanded missions of the regional commissions, mentioned earlier; plans for State and local development programs; and, the involvement of the White House Interagency Council in regional commission programs. If all of those things exist, it is our feeling that they will not only benefit the regional commissions, through funding support that would not otherwise be likely to occur, but also would give reason and purpose and, therefore, improve the function of the Federal Regional Councils. But as I said in the first instance, if the President took the view that the Federal Regional Councils should not operate, that issue is moot. Bernie? Mr. MANHEIMER: Is there any discussion about changing geographical boundaries? Mr. HOUSTOUN: Yes. As you might guess, an enormous amount. None more than something I think will appeal to you because of your background. When I met with a group of State legislators with districting always on their minds, the boundaries of the regional commissions must have occupied at least half of the total discussion. Mr. MANHEIMER: Particularly to tie in with Federal Regional Councils? Mr. HOUSTOUN: We would take the position that, to the extent feasible, it would encourage whole states, and, if the Administration "hangs tough" on any question, it will be on the multistate question. The definition of regional activity that we are supporting is so inherently and explicitly dependent upon more than one state being involved that, I think, if anything would be an unyielding position, that would be. Mr. MANHEIMER: Are there any plans now, any existing maps that show what the recommendations are? Mr. HOUSTOUN: That would, of course, be up to the Governors themselves. In effect we propose two transition periods. One would be pre-legislative and one would be post-legislative. There are on hand three applications we feel largely, if not entirely, meet the Administration's proposals: The Mid-Atlantic, the Mid-America, and the Mid-South applications. In each case they are multistate. In large measure they are moving in the direction we are proposing, and I think those applications would be approvable in 1979. Central states, regardless of whether or not they requested designation, would be invited during the same period to join existing regional commissions. We would encourage this as much as we possible can. If this occurs, it would enable us to have 50 states on line when the fiscal 1980 budget and the new authorization begin on October 1 , 1979. At that time a second opportunity would occur to adjust boundaries, should the Governors choose. We could see some possible shifts at that time. The position with respect to Appalachia, which is the principal influence on the boundary question, is such that I can foresee Appalachia continuing for a considerable period of time and other commission boundaries adjusting themselves to that reality. Yes? Mr. ETHERIDGE: Maybe I am just repeating what you have already been saying or implying, but it seems to me that there is going to have to be almost a mind-boggling selling job done on Congress if the successor legislation to Title V is going to result in a sufficient amount of funds to carry on meaningful regional programs, particularly in view of the fact that the Administration is beginning to "hang tough" on inflation and on the deficit. In view of the fact that the White House Conference on Balanced National Growth found that there are many voices crying that the Federal Government ought to start assuming more of the cost of Medicare and Medicaid, welfare, and now there are more defense needs that keep pressing on us, I think the amount of budgetary competition that the regional commissions are going to get is really going to be fierce. So I certainly wish you well in that selling job that you are going to have to do— at least, if you can do it. Mr. HOUSTOUN: I agree with you on all of those points, but it might be well to recognize that the budgetary policy does shift from year to year. I think that what we need in fiscal 1980 is enough money to enable the new commissions to start with no penalties, compared to the existing commissions. What we think we would need from 1981 on are increments which will enable the commissions to take on truly regional activities which in some aspects are increased scale activities. I think it is always difficult to try to see where one would be at any particular time without the 5-year authorization; and where we would be in 1 98 1 , 1 982 and 1 983 , 1 could not say . What you say is true, and, of course, it is true for every other program as well. I think, though, that if we come through the Presidential decision memo this month favorably — it probably will be early next month — and we send the legislation to the Hill, I think this will have the effect of meaning that this program will have presidential support for the first time since Lyndon Johnson was President. Yes, Ma'am? Ms. REYNOLDS: Standard regional Federal boundaries were not drawn with a look at the economic conditions. Do you foresee any attempt to adjust the standard Federal regional boundaries to align them more closely with regional commissions, or the other way around? Mr. HOUSTOUN: The White House is at this point, at least in principle, accepting the notion that standard Federal regional boundaries might indeed be adjusted without changing the headquarters city and a few minor particulars. The existence of Appalachia, however, makes all of that quite difficult in the East. The way the boundaries were drawn in the West, and the reasons for them means that it is going to be relatively difficult in the West. I personally feel that Region 10 is an extraordinarily appropriate economic region, and I would hope the Pacific Northwest and Alaska would agree with me. Obviously, one can conceive of arrangements in Regions 2 and 3 in which those boundaries might ultimately be coterminus without necessarily dividing the Middle-Atlantic application. One might simply conceive a region such as Region 5 and a regional commission at some time in the future, because it is a reasonably good economic region. It is awfully close to the census region, for example. Ms. REYNOLDS: I am concerned a little bit about the dual role that the Federal Cochairmen might have to fulfill — in the Ozarks region, for example, there would be the Dallas Regional Council. Mr. HOUSTOUN: I think that would be so difficult it probably would not happen in the region. Ms. REYNOLDS: There are so many different factors. When you think about how the Council actually develops its work plan, what they are going to be interested in, and how the monies are influenced in a region, I am wondering if you might be spending a lot of time going back and forth between Councils? Mr. HOUSTOUN: I doubt it. I think what the arrangements there were, if you will, would be the lower level of coordination. There would be a good deal more action. I do not know, given two opportunities for boundary realignment in the next 2 years in all of that Ozarks to Texas to Southwest Border to Louisiana, how that would all fall out. We want to give the Governors an opportunity to make decisions that make sense to them. Ms. REYNOLDS: I was interested in your saying- Mr. HOUSTON: They will probably not seriously consider the FRC boundaries. Ms. REYNOLDS: I was interested in your saying that the Administration might be willing to shift the standard Federal regional boundaries. Mr. HOUSTOUN: When I say that, I can only say it is one of two task force reports recommending that the Federal regional boundaries not be looked at as if they were cut into mosaic tablets. But I would expect those adjustments would be relatively minor. There is no attempt on either side to force coterminality of FRC and regional commission boundaries. However, we do think that, if the FRCs were continued, a more institutional and cooperative working relationship will favor both. Ms. REYNOLDS: I'm not necessarily thinking of the Federal Regional Councils but the agencies that have to conform, such as the Department of Transportation conforms with the standard Federal regions. If we are going to be specifically helping a Federal region, we have to get two or more regional offices involved, depending on how the regional boundaries are established. And that becomes a much more difficult task in providing assistance as needed. Mr. HOUSTOUN: Time and experience have taught me not to expect a national outcome, but incrementally, some advances may be made. Mr. SIEGEL: You said the Administration is moving toward having agencies more standardized in the way they are either regionalized or centralized and having the planning commissions, the FRCs, A-95 agencies, and all the agencies in Federal and State relationships more centralized; the way HEW has decentralized a lot of things. If other agencies are decentralized through their regional offices, would not that all have to be taken into consideration in making these decisions? Mr. HOUSTOUN: I think the question of centralization versus decentralization is one that I would not even want to predict. I heard Director Mclntyre musing on that subject the other evening when we met with him. I am confident I know what his position is, which is open-minded. I do not think he favors centralization or decentralization. Mr. SIEGEL: That was one of the points put out in the OMB studies. The difficulty in making FRCs work is the fact that agencies have different conceptions of how their programs should work, whether decentralized, regionalized and so on. Mr. HOUSTOUN: That would change over time in part with the interpretation of what is the best way of handling those commissions — quite so. Dr. ANDERSON: Larry, have they examined the effectiveness or efficiency of whether it would be better to expand some of the existing commissions, as opposed to establishing new commissions? Mr. HOUSTOUN: The first part of the answer is that the task force at least is so strongly opposed to single state commissions that it automatically takes you in the direction you are saying. We at the other end of that scale are in favor of making it possible for the Governors to make a free and open choice as to whether or not they want to belong to one commission or another. We are recommending moving toward parity of funding between ARC and the other commissions within the 5-year life of the extension, which I think is the single most important decision factor affecting such a judgment. There are those who feel they can think of reasonable ways of accommodating that short of that period of time. I am not sure, but given the reality and, I must say, the effectiveness and the good record of ARC in the past, we obviously do not want to dismember something that is working well. I think at the same time we want to move toward whole states, toward stronger commissions. There are some readjustments that the Coastal Plains could make in the short time we are moving in that direction. Dr. ANDERSON: I was particularly curious in view of the fact that I have heard a lot of concern expressed over the possibility of including Alabama in the Coastal Plains area. There are concerns expressed by some individuals in Florida as to the increase in effectiveness by joining with Alabama. In view of this interest, I am curious as to what your position on that would be. Mr. HOUSTOUN: Our position is, within minimal guidelines, no single states and toward a preference for whole states. We think that is a decision for the Governors, but there will be opportunity during the pre-legislative and post-legislative stages to work things out. Our feeling is in the post-legislative era that 6 months should be enough to take care of that period. There are those who have suggested that it might take a year. I do not think it would take much time. I think we all know pretty much where we are going. We ought to get our boundaries set and move on. Claud, I apologize for taking this much time out of your meeting, which is the reason we are here today. I have some material that I will have passed out at the close of the meeting that reflects some of the things I have been talking about, that tells you where we are going. I wanted to say that, in particular, I was extremely pleased with the response— let me back up just a little bit — at the last meeting of this group. I sort of decided that since there was a lack of communication between the departments and agencies on the one hand and the commissions on the other, with respect to the comments that the departments and agencies have made on commission plans, I would do three things. I wrote to the Federal Cochairmen as a group and asked if we could set up a procedure by which the comments are clearly taken into consideration in the formative stages of the commissions' plans. Also, I would recommend that the departments and agencies are advised, much as we do in the A-95 process, of how those comments were taken into account and what disposition was made of them. Secondly, I wrote to Pat Vaughan, who is the Federal Cochairman of the Pacific Northwest and who was the focus of attention of the last plan review and asked if he could work out an arrangement, ex post facto, on that plan. I wrote to Dr. Anderson and asked him if we could work out something with respect to the Coastal Plains plan which was then coming in and for which this meeting was set up. I am very pleased with the response I have gotten, particularly from Pat and Claud, and I want to share with you the Coastal response and to tell you that we are working on that matter. I think we will have a procedure that will assure you not only of the extent to which your comments were taken into consideration, but how, why, and where that led. We did not propose an exhaustive back-and-forth set of memos, but something that was fairly quick and light; something that you could use, and, I think, would strengthen the relationship between the departments and agencies and your program work with the commissions. Claud, I want to express my appreciation to you for, in effect, being a leader in this. I think the plan that you have is an excellent one. The comments, those I have seen thus far, seem to be quite well founded. I would look forward to using Coastal as a kind of laboratory for testing an even closer partnership with the Federal agencies. I shall turn the meeting over to Claud at this point. Claud, it is yours. James W. Butler, Executive Director, Coastal Plains Regional Commission Richard M. Poythress, Planning and Evaluation Director, Coastal Plains Regional Commission DEVELOPMENT OF COASTAL PLAINS REGIONAL PLAN Introductory Remarks Dr. ANDERSON: Larry, before I get into my comments and prepared statement, let me first thank you for the summary of the task force report. Indeed, that not only enlightens but it paints a very optimistic picture for the commissions. It is much more positive towards the commissions. If I am not talking loud enough, please tell me — not having the same authority as Larry, my voice won't go as far. Let me take this opportunity to say good morning to you and express my thanks for taking the time this morning to meet with us to share the comments and recommendations of the Federal agencies which you represent and how they relate to the Coastal Plains Regional Commission. Let me introduce some of my staff and others here this morning. On my left is Mr. Jim Butler, who is the Commission's Executive Director from Charleston, South Carolina. From his staff is Dick Poythress, the individual who has the responsibility for keeping us on track with the plan. From my own staff off to the right, the gentleman in the blue coat is Tony Magoulas, my Special Assistant. To his left is Greg Higgins. who is the State coordinator for Governor Askew of Florida. We also have Bruce Morehead, who is sitting on the right in the rear. Bruce is my chief program officer. We also have Ruth Bosek, who is sitting to the left of Bruce Morehead. Let me welcome each of you and thank you for participating in review of the Commission's plan. This plan represents over a year's work by many people in the 5-State region. It incorporates the thinking of the Governors, the various staffs, and the substate development districts and the commissions and advisory committees. This review of the draft plan, while it is still subject to change, is an essential step in the development of programs for the years ahead. We have asked the Federal agency officials to give the draft their suggestions for strengthening and improving the document. We have already received a number of useful suggestions from each of you, and I am going to continue to examine these most carefully as we move toward achieving the plan's aims and goals. Let me point out that since the Commission was chartered in 1966 it has grown from three states, 159 counties of some approximately 6 million people to five states, 290 counties; that covers approximately 12 million citizens. We recognize the Commission must have a broad and flexible plan, one which will direct the Commission towards achieving the goals and directives that the Congress has set for us. We also recognize, as I am sure you do also, that planning is a process that is ever developing and changing. We must continue to modify our plans to accommodate the changing economic and social environment and circumstances in our region. Early in the planning process we realized that no amount of Federal funds alone could truly develop the economic structure of our region, but in a free economic enterprise, most economic activities are conducted by the private sector. Public funds can stimulate economic development through programs designed to induce private investment to create the desired economic structure. The Commission's strategy has been to identify and bring about those public investments which are required to facilitate and stimulate the private investment needs, which are to develop to the maximum the region's economic structure. Consequently, with the evolution of the Coastal Plains' comprehensive planning process, investment planning in each of the States has been strengthened through interaction with Commission activities and has financial support from the Commission. Improvement in the substance of the individual State's investment plans, including the identification of areas of potential growth, has been significant. The State investment plan is an essential ingredient of the regional plan inasmuch as it provides the systematic projection of the States' needs, priorities and programs to keep those needs in a regional proportion to each State. Beyond this, however, the success of the Commission's efforts to bring about regional economic development in the region will be determined by its ability to enlist the support of those governmental officials at all levels, as well as citizen leaders in business, industry and public institutions. It must be able to influence national, State and local policies in order to meet its objectives. Development of a meaningful realistic plan for the region is of major importance, but the plan and its strategy must win acceptance from those individuals and groups that comprise the regional leadership. Even more, the Commission must secure a commitment from this leadership to the goals and objectives set forth in this document and to think about the full involvement in the implementation of the plans and programs. As you know, any document that is not agreed upon is simply a piece of paper and shall remain so. As I said earlier, we are carefully studying each of your comments and intend to incorporate many of the comments you have made. Jim Butler and Dick Poythress will give you a more detailed description of how the plan was developed and provide an overview of its content. I, personally, encourage each of you to be forthright in your comments so we may have the full benefit and fruits of your thinking. Please rest assured that, as long as I am the Federal Cochairman for the Coastal Plains Regional Commission, not only will I invite and encourage your participation, but I will work to do anything to assist in the full implementation of this plan through modifications and through your suggestions. I thank you. Let me turn our discussion over to Jim Butler, who will introduce the plan to you. Thank you. Analysis of the Plan Mr. BUTLER: Thank you, Dr. Anderson. After a few introductory comments, I get promoted to be the projectionist for the main event of the morning — that is Dick Poythress' presentation. So instead of jumping up and down on a "bum" leg, if you will permit me, I will stand up for my few comments. First of all, on behalf of the Commission's staff I want to take this opportunity to thank each one of you for the time and efforts that you put on our plan, and particularly for the comments you have submitted to us. In our opinion, it is a good plan. It is one that is being used by all of the partners in the Coastal Plains Regional Commission. Those of you who are familiar with the previous models of regional plans will recognize that our plan is a simple and direct document 10 and does not have all of the highly technical sophisticated words that are normally found or sometimes are found in plans of this type. This is no accident. This is precisely what we set out to do, and we feel we were successful in accomplishing that. The plan you are going to hear today was developed with the fact uppermost in our minds that it be a working document, a useful document; one that would be utilized as a guide for regional, state, substate and other plans and projects which become the ingredients in area development tactics. Although our regional plan was never envisioned to be a mandate from "on high" from which all blessings flow, it has been accepted as a formalization of appoved guidance from the Commission's members, the Governors, the Federal Cochairman, Dr. Anderson, to provide a road map to those participating with us in the Coastal Plains development program. It is significant to point out that we feel that our plan is adequately specific to provide general development guidance to its users; yet is sufficiently flexible to provide our users as diverse as Florida on the south and Virginia on the north to effectively attack their economic development problems. Each year we see closer ties between the regional plan expressing a set of regional objectives and goals, along with strategy to accomplish them, and our State investment plans which are the Governor's own blueprints for action— his imprint of his administration — in overcoming his own lagging economy, low per-capita income and other deficiencies as a partner in the Coastal Plains Regional Commission. We are not perfect in that at the present time, but we are surely making progress and we are making good progress. As you are aware, any plan must meet the scrutiny of five States and the Federal Cochairman, and reflects compromise at all stages of development. Our plan is no exception. One compromise of overwhelming consideration is that we have attempted to produce a useful document which will serve as a practical guide for development, yet not be a document replete with nice-to-have data and graphs which will be easier to look at than to use. There are a number of categories of data which we could have included in our plan at considerable expense, but the cost was just not justified by the potential for use. Now, I am coming to the point or crux of the matter. I am trying to— I am asking your help and consideration in this. I, therefore, urge you in your comments to consider the cost effectiveness of your recommendations vis a vis our plan. The present plan costs $17,000. I doubt that very much of it could be produced at a price remotely similar to that at the present time. We will soon start to revise our plan as Dr. Anderson has promised you, giving full weight and consideration to your comments and recommendations. We will update the data, as well as reevaluate our goals and objectives and strategies to accomplish them. If the availability of funds to our Commission remains at the same level, or, if it gets larger, our activities, the things we put in our plan will be of necessity because of the makeup of our Commission members, get the no frills treatment. All of our operations, as well as the initiatives, will be closely evaluated for cost versus utility and well they should be. Therefore, in your comments, please help us by giving us the benefit of your cost versus utility analysis relative to your recommendations. Now before I turn this over to Dick Poythress, we felt that because our Commission is slightly unique — the advisory committees play a tremendously important part not only in the development of our plan but in the approval and recommendation of projects — I would like to show you an organizational chart and show you these advisory committees and brag a little, if I may, about the caliber of personnel we have appointed to them. I apologize for your having to turn around. As impressive as this room is— we are impressed with it— we just could not bring ourselves to come in at 8 o'clock this morning and ask the carpenters to please move the screen down to the other end of the room. If you will bear with us I think all of you will be able to see it. I have checked it out. Apparently they do not measure 11 authority by the stentorian tone of your voice, because I am down at the bottom of the heap and I am sure nobody is having trouble understanding me. (Slides) I am going to touch on the Coastal Plains Regional Commission. We may not be 100 percent perfect in being a joint partnership but as I said before, we are getting there. Our Federal Cochairman and our States are working together and they are working well. That, of course, is the purpose of our existence. We are presenting our plan this morning in compliance with Section 503 of the Public Works and Economic Development Act. (Slide) Let me get into the part that is really the initiative for our being here. The top part is nothing unique. There is nothing particularly strange about that. The Federal Cochairman, the five Governors with one of our Governors being the State Cochairman who is elected for one calendar year. At the present time it is Governor Reubin Askew of Florida. He goes out of office in January, and, although it is not pre-ordained who will assume the leadership, there is a good possibility that Virginia will take the State Cochairman's office. Of our two new States, Virginia is the only one that has not had an opportunity to serve as State Cochairman. Governor Askew is not able to serve again inasmuch as he has already served two terms. I want to put most of my emphasis on the next line: The Advisory Committees. Each of the Governors and the Federal Cochairman may appoint three members to each of our Advisory Committees. We have four major Committees with an ad-hoc Committee on tourism which I will touch on momentarily. That means that each one of these Committees shown on this chart has 18 members. (Slide) I want to show you a picture, if I may, because as I stated at the very start of this briefing, I wanted to boast a little. Let me give you an example of the type of people we have on these Committees. Bear in mind that we have an 85 percent-plus attendance record of these people at Committee meetings. The man second from the right over there with his head slightly down, is James B. Hunt, Sr. He is the father of the present Governor of North Carolina. The man standing is Bob Whittaker, who is serving his second tour as Chairman of this Committee. He is in charge of all international trade involving the State of South Carolina. The man sitting third on the right looking at the speaker is Dr. Gene Younts, who is the Vice President for Services in the University system of Georgia. In addition to those, we have three State representatives and a mayor, on our Committees. We have a member from the Federal Environmental Protection Agency. We have numerous State Cabinet-level individuals assigned to our Advisory Committees. Again, I point out that the duties of the Committee members are to develop and review projects. (Slide) I thought you might be interested in getting a "ball-park" estimate of the amount of money we have received through the years. As you can see, it runs slightly less than $10 million. Hopefully, what Mr. Houstoun said a few minutes ago will come to pass. We feel that we are prepared to move ahead if Congress will give us the money, and we will perform so that we can satisfy Congress. (Slide) I put this on so that I can "cut off at the pass" any wounding of ego or anything of that nature that may surface in Dick's presentation because of the location of environment in our priorities. You will notice that in our list of priorities, or "categories" as we are calling them, 12 the environment comes at the very bottom. Bear in mind that the plan you are dealing with was a 1975 plan. It is not that we put it down there to deemphasize it. It is because back in those days our environmental program was just getting started. It was only created in 1975. And in 3 years since its conception and birth, the environmental program has become practically the most active and aggressive Advisory Committee and program that we have. Therefore, we will be glad to answer your questions relating to this low priority. Do not think, however, that when you see this listing that it is there because we do not have any more appreciation for the environment than that. We do, and our review that comes up next year will show that environment will rank very close to the top. (Slide) Now if I have convinced you that we in the Coastal Plains and perhaps some of our friends in other regional commissions have a great deal in common with a raccoon, afraid to hold on and afraid to let go— damned if we do and damned if we don't — then I have done a good job of explaining our status to you. In all seriousness, I put that in there for a little levity, but Dick will now give you a run-down on our plan, of which we are very proud. For heaven's sakes, let us not give up the ship. We are on our way to improvement and this regional approach is going to work out. Okay, Dick. Mr. POYTHRESS: First, I would like to orient you to the section of the country represented in the plan we are discussing. The Coastal Plains area lies generally beneath the fall line, with the Atlantic Ocean on the east and runs some 700 miles from central Virginia to central Florida. When the Coastal Plains Commission was chartered in 1967, it was composed of parts of three States, Georgia and the Carolinas, with 159 counties and some 6 million people. Since then, two major expansions have occurred. In 1975 Florida and Virginia joined the Commission bringing in 39 counties of northern Florida and 42 counties and 17 independent cities of Virginia. Georgia and South Carolina then requested permission to extend their boundaries to include areas then known as "No Man's Land," between the Appalachian Regional Commission and the Coastal Plains Commission. So today's area covers five States which includes 290 counties and a population of a little over 12 million. The Commission, thus, represents some 5 percent of the U.S. population, and 4 percent of the U.S. land area. The second slide will give you a little better picture of the Commission's area in relation to the country as a whole. The original area, of course, was composed of these three States. It was extended to Virginia, Florida, and then Georgia and South Carolina expanded their participation in 1975. This is the area we are talking about right here. This draft plan is the third plan that developed since the Commission has been in existence. Earlier plans adopted by the Commission were developed around elaborate planning models embracing the entire economy of the region under the assumption that the plan would stimulate large additional investments in the region by Federal and State agencies and by private investors. These funds were not forthcoming. Out of the total Federal investment of $14 billion planned for the 1970 decade, only some $47 million was provided. As a result, the present planning process has been modified to even more simplistic and rational guideline for Commission decisions in the years ahead. The Commission was precluded from making major investments in transportation due to the unavailability of funds. It has however, made proportionally larger sums available from its relatively meager resources in the area of vocational education, industrial development and marine resources. While it is still too early to appraise the full impact of these expenditures, an initial evaluation conducted by the Commission gave the Commission considerable credit for the existence of a network of vocational, technical education facilities. The Commission's investments were judged to have had a significant impact on the region consistent with the amount of funds made available to it. This draft plan completed in 1976 is a result of a year's effort with input by heads of State 13 agencies in all five States, all 49 substate districts, the five standing Advisory Committees to the Commission, the Governors' alternates, the State coordinators, the Governors themselves, the Federal Cochairman's office and the Commission staff. Two consultants were used in this project: Dr. Charles Floyd of the University of Georgia, a professor of economics, and Harold Williams, who is presently the Deputy Assistant Secretary for EDA. As I stated earlier, prior efforts by the Commission were built around elaborate planning models which attempted to embrace the entire economies of various parts of the region. There appeared to be an implicit assumption behind the planning process that these plans would be viewed by Congress, by important agencies in the Executive Branch, the States and private investors, as guides for both the amounts and kinds of investments that would be made in the region. In fact, this did not happen. Despite the excellence of many of these plans, from the beginning the amounts made available to the Coastal Plains Commission for investment in the region as well as for the other Title V Commissions have been a small percentage of the total investment needed to accomplish the plan's objectives. Despite the Commission's success in stimulating considerable investment for public and private funds, there is no evidence that any Federal or State agency or private investor shifted additional investments into the region in amounts that even begin to approach the scale contemplated in the original plan. These considerations have led to a change in the approach to the task of updating this plan. For one thing, objectives have been scaled down. More importantly, the plan addresses itself primarily to providing a rational scheme for guiding decisions of the members of the Commission. (Slide) With this in mind, the Commission has set for itself in the years ahead four major goals: These goals are statements that emphasize the major considerations in the minds of the Coastal Plains decisionmakers. These are to give the people of the Coastal Plains Region a greater opportunity to secure employment at the highest level of their own capabilities, to help individuals bring their skills to a higher level of competence, to provide increased opportunities for individuals to earn higher incomes and to help communities to provide those services that enhance their economic potential. The goal of more jobs continues to be a major end for regional development in the Coastal Plains Region. However, the statement of goals is not confined just to jobs but to jobs that will enable the residents of the region to work at the highest level of their capabilities. This means that increased attention must be paid to the development of jobs requiring higher skills. In turn, these jobs will pay higher wages and will lead to a lessening of dependence throughout the region on low-paying industries. The goal of more jobs requiring higher levels of skill underlines the importance of helping people to bring their skills to higher levels of competence. The two goals, of providing more opportunities of employment at the highest level of competence and that of assisting individuals to bring their skills to those higher levels, are related in the emphasis on upgrading employment within the region. (Slide) The Commission has set for itself six objectives within these goals. The first is to bring the number of persons employed in higher-wage industries equal to the number of those employed in lower- wage industries. We realize it will be extremely difficult to raise the percentage of workers employed in the higher- wage industries. The Commission realizes it will have to be responsible for creating 169,000 jobs in high- wage industries over the period of the plan. It is assumed that the region should not have much trouble in maintaining the total level of employment at approximately 41 percent of the population. (Slide) 14 The second objective is to bring employment in all districts by 1987 to the point where at least 38 percent of the population is employed in every district. This objective is in keeping with the Commission's determination to help provide jobs for people as near as feasible to where they live so they will not have to be forced to leave their communities in order to find work. To bring districts which are presently below the target 38-percent level will require an additional 39,140 jobs to be distributed among these districts. The third objective is to provide by 1987 every person in the region who wishes it the opportunity for secondary and post-secondary vocational educational training in curricula which are up to date and in accord with the current projected employment opportunities. We are not satisfied that we have a readily available indicator for determining the adequacy of vocational education opportunities throughout the region, and we intend to develop such an indicator by the end of this year. The fourth objective within our goals is to keep per capita income for the region as a whole rising at the same rate in relationship to the national per capita income. As a relationship for the period 1970 to 1974, that is growing at a rate that is 13 percent faster than the national growth of per capita income. This is a key objective. The Commission does not believe that the present growth rate in per capita income in the region can be maintained unless special steps are taken to raise wage and income levels. The fifth objective is to increase per capita income in lagging districts so that income levels throughout the region are more evenly matched in 1987. This objective is also in keeping with the Commission's concern for balanced development. As an indicator to determine progress toward this goal, the Commission will measure per capita income in the 32 lagging development districts where capita income in 1974 was 73 percent of the national per capita income. The Commission will consider it has reached its objective of a more even distribution of income growth by 1987 if per capita income in the 32 lagging districts will have reached 84 percent of the national per capita by that time. The sixth and final objective within the goals framework is to bring the level of community services within the region by 1987 to the point where industries needed to achieve objectives in employment and income can function effectively. Achievement of this goal would be reflected in indicators of employment and income which were discussed above with the other objectives. The Commission has a development strategy for reaching these objectives and, ultimately, its goals. It believes that the meaning of economic development in the Coastal Plains is constructive and permanent growth in the production of goods and services which are the object of economic activity. An economy will grow by the addition of capital or addition of labor, or both, and it can also grow by using its existing stock of labor and capital more intelligently or more productively. In real terms, implementation of this strategy of permanent growth in goods and services in the future will, as it has in the past, depend on its State members and Advisory Committees to originate the projects needed to carry out the plan. The Commission also looks to multicounty development districts and local communities to plan and submit projects which can be funded under the plan. The Commission will continue to look to its Advisory Committees to help it plan programs and focus on potential projects of region-wide significance. In the origination of projects the Commission will require of itself that it direct its actions and policies toward the stimulation of private capital investment, use the funds appropriated to the Commission to stimulate other public and private investment and to provide knowledge which could furnish the basis for: one, legislative actions; two, decisions of officials in Federal regulatory executive agencies; and three, other private and public investments. It would encourage local initiative and creativity within the framework of regional activities; it will give 15 priority to projects which are likely to result in jobs paying higher wages or which otherwise would tend to raise income levels. The Commission will give priority to projects for which the benefits and employment or higher income can be specifically and directly related to the implementation of projects; to projects which have prospective benefits which are high in relation to cost; to projects located in those areas of the region which are lagging behind the region in employment and income growth; and to projects which address region-wide problems and are executed on a multistate or region-wide basis. However, the Commission will not neglect those projects which have region-wide significance because they attack problems or provide useful demonstrations for action even though such projects are carried out within a single state. The program areas through which the implementation of this strategy will flow are industrial development, marine resources, environmental affairs, travel-industry development, agriculture and forestry and human resources. Although the original program did not set priorities among these seven program areas, it did provide estimates of the amount of Commission advance which would be required in each area in the 1973-1980 period. The following chart will give you an idea of what the Commission has done, project- wise, through 1975 by program area. (Slide) The thrust of Commission expenditures from its inception through 1975 clearly shows that its major priority has been vocational education. One-third of all Commission funds were obligated on vocational, technical facilities. The second most important program was marine resources, which received 20 percent of all funds. Industrial development accounted for 13.4 percent of all funds, and administrative expenses accounted for 1 1 percent. The Commission's original planning and operations obviously placed a great emphasis on human resources with considerble attention being paid to marine resources, industrial development, and transporta- tion. The Commission's failure to receive funds in the amounts contemplated under the initial plan was in great part responsible for spending a somewhat smaller percentage of its originally expected total for transportation investment. This in turn made investments in other program categories, such as marine resources and industrial development, account for such a large percentage of actual expenditures than had been envisioned under the plan. In analyzing program priorities for future years under this updated plan, a number of factors must be allowed for— not the least of which is the realization that the Commission's powers are limited. For one thing, the Commission is a joint Federal-State agency which has no State or Federal enforcement authority. Funds which have been appropriated to it in the past and would seem likely to be appropriated to it in the foreseeable future are limited to a fraction of the amount which would be required if the full scale of public investments required were to be supplied by the Commission's financial resources. The Commission has only a modest amount of influence on other Federal and State agencies, each of which has a separate constituency which each must satisfy; and each of which believes that its financial resources are not nearly adequate to meet the demands of its primary mission. Finally, the Commission has little influence on national or State legislation. Accordingly, the Commission's strategy must be based upon using its own funds which will influence investment of other public and private investment-making entities, as well as to expand its ability to influence the decisions of the legislators, regulatory officials, and the decisionmakers in the executive agencies. There is an issue which probably transcends the others: That is, should the Commission attempt to set priorities or apportion funds before it knows what projects will be submitted to it. It can always be argued that the Commission simply processes projects that they receive and approves only those that appear to have a significant impact on regional development relative to 16 the amount of funds requested. However, the Commission believes that its function is to plan for regional development. The planning involves the setting of priorities and the allocation of scarce resources among desirable programs. Thus, the Commission's plan must necessarily supply a reasonable method for allocating the Commission's scarce resources among various competing programs. On the other hand, the Commission will seldom have enough information about the actual benefits and cost of competing programs so that it can apportion its funds with precision and expect that its apportionment will achieve a maximum amount of benefit from the funds available. Thus, it must leave a certain amount of freedom to the States and the localities to set their own priorities and to develop projects in accordance with local and State needs. It is difficult for the Commission to draw the line between rational planning and priority setting at the regional level and maximizing opportunities to be responsive to local and State needs. Certainly, this line cannot be drawn in a planning document. Nevertheless, it is important for the Commission to set regional priorities and to expect the States to develop projects in accordance with those priorities. At the same time, priority setting should not be so rigid that it restricts local initiative and creativity in proceeding with development programs. Taking these factors into account, program priorities can be shown in the following list of project categories in general order of priority. As mentioned earlier, it is always difficult to develop a plan when you have five States and a Federal Cochairman to scrutinize what the priorities are going to be, as well as program areas, goals and objectives. However, in the development of this plan, the priorities were set by the individuals in the planning process. While priorities are useful in providing direct guidelines for an existing Commission and other funds to foster regional development, priorities must not become straitjackets which prevent the States from pursuing promising courses of action in accordance with State economic needs. At the same time it is the responsibility of the State members not only to work to develop projects for Commission action in accordance with the strategic priorities of the plan but also to begin to examine priorities for the investment of State funds in ways that will contribute to the attainment of regional goals and objectives. As a Federal-State program, the regional plan must be carried out by all parties with intelligent regard for the needs and priorities of the people who live in the region. Although locally originated projects would constitute a substantial portion of all projects funded under the Commission's plan, the Commission will want to give considera- ble attention to those projects which transcend local interest but which are nonetheless extremely important for regional development. The Commission has established four Advisory Committees in industrial development, agriculture and forestry, marine resources and environmental affairs. To help plan its programs in these areas and to focus on potential projects of region- wide significance, these Advisory Committees will continue to play an extremely important role under this new plan. The Commission is aware of the fact that this plan will have to be revised in the coming year to take account of unforeseen events, incorrect assumptions and more extensive analysis. To that end it has established a continuing evaluation program which will study the effects of projects and the results of Commission operations. It is expected that the planned evaluation program will provide the Commission with the insights needed to adjust and amend the plan according to the dynamics of regional development as that development forms over the period of the plan. The Commission is pleased with the progress it has made in the region in recent years. Although its own contributions to progress have been modest, the Commission is proud to have played a small part in the economic gains that have been registered in the Coastal Plains Region. The Commission hopes to play an increasingly more important role in the region's development in the years ahead. It believes that the analysis of the region's problems and opportunities in this plan gives it the insight required to carry out an effective program. We will be happy now to respond to questions or discussion. Bob, would you lead that? 17 GENERAL DISCUSSION BY EXECUTIVE AGENCY PARTICIPANTS Dr. RAUNER: As you know, the general manner in which we proceed at this point is simply to circle the table and have each agency's representative summarize the earlier comments that have been submitted, going back and forth against what has been said or heard here. As you also know, all of this goes into our formal record which ultimately you get to see again in a month or so. I would like us to carry on that way with Dick, after his fine presentation, Jim and Dr. Anderson, responding to questions and recommendations you may have. I note that we did not circle the table and have everybody introduce himself, so we will simply start here on my right and go around the table. When you have remarks to make, if you will please identify yourself, we will assume it is a kind of belated introduction so everybody will know who you are. Then we can eventually come back around. I will note that after that has been accomplished we will have, in some sense, discharged ourselves on the subject of the meeting: to wit, the plan we have before us. But we have some other items to carry on. The Coastal Plains has been more than generous in contributing some of its time to some of these other activities, but I think they all bear on us. We can begin and you can say who you are, and if you have some remarks to make about what you have heard, we will simply go on. Remarks by Department of Transportation Ms. REYNOLDS: Karolyn Reynolds, Department of Transportation. Would you like our summaries now? Dr. RAUNER: If you would. We have the written ones, but just for the others who have not had a chance to see them all, they could hear the substance of how you stand. Ms. REYNOLDS: As I mentioned this morning, have you noted in your plan that transportation funds are not available in the amounts that you had anticipated when you first started planning for the region? We do not have discretionary programs. The transportation funds, although in toto are a significant amount, go to the States on a formula basis. It is up to the States to allocate to the specific regions within the State how they want the funds to be used. We are developing now a rural transportation initiative which will perhaps be able to fund more programs within a region, such as the Coastal Plains Region. In the past, most of our funds have either been interstate or urban related, but both the urban mass transportation program and the highway program will be combined under the joint 19 direction of the two administrations to provide some rural transportation support. We are hopeful that will be developed in the legislative package very shortly. Mr. POYTHRESS: Our transportation funding has been limited, more or less, to technical assistance demonstration projects. Our financial assistance has been pretty much limited to demonstration projects within the more rural areas of the region; feasibility studies for moving the elderly; multimodal-type transportation studies; but nothing of any magnitude at all. That decision was made in 1973 and 1974 by the Governors with the Federal Cochairman, so we pretty much follow that guidance to this day. But that is very interesting and I am glad you passed that along to us. Ms. REYNOLDS: Hopefully, but I have no idea what the magnitude of the funding will be. We have had very small demonstration programs in the past, and I know that within the Coastal Plains Region there has been a rural transportation demonstration program. But the funding nationwide was only $10 million. What level of funding we will receive for transportation initiative, we have no idea. Mr. POYTHRESS: We participated jointly with DOT, I believe, in the PD area of South Carolina, which may be what you are referring to here. Dr. ANDERSON: Let me respond to that. In going around the room, there is one question I would like to go through with all of you and get a general reaction to it individually as you make your general comments to our presentation. One of the biggest drawbacks that I have noted in my short tenure as the Federal Cochairman, as was pointed out by Larry, is the fact that, if this Administration endorses the Title V concept, it would be the first time since Lyndon Johnson. That has been a drawback, but in addition there has been limited funding. That is, we have had such a small amount of money to work with. I do not expect and I do not foresee any substantive amount of increased funding in the near future, either. On the other hand, one thing I would like to run by you and your respective agencies — what would be your thoughts about the possibility of your agency trying to, maybe at least philosophically, think about allocating certain specific amounts of money in these areas to be funneled through the Title V Commissions. Let me tell you why. For instance, one of the primary charges to the Commission is to function as a coordinating element, which means that even though most of you function in the categorical areas, if you were dealing with transportation whereas we were dealing with housing, and if the monies came through us, we could coordinate it for you and tie it in with other aspects, including the social and environmental, which you cannot do as an individual agency. For instance, if we were dealing with a housing problem and we had an agreement with you that a specific amount of money from the Department of Transportation could be coordinated, we could work with HUD in building the roads up to a given unit and then turn around and work with HEW in putting in a health care facility. What I am asking for is that, even though we may not see an increase in funding in the very immediate future, could there be some kind of a set-aside of a specific amount of money that could have some kind of priority to go through the regional commissions. Ms. REYNOLDS: We have some legislative restrictions. The Federal Aid Highway Act requires that the highway monies go to the State highway agency. We have no choice there in planning. Dr. ANDERSON: Do you have any discretionary amounts of money that you can play with? Ms. REYNOLDS: No discretionary money. However, the Governors designate the plan- 20 ning agency for the particular States. Perhaps there could be something worked out with the Governors so that you would be the recognized planner for any metropolitan areas within the region. Dr. ANDERSON: This would have to come from the Governors. Remarks by Small Business Administration Dr. RAUNER: SBA, Bill? Mr. ETHERIDGE: One thing I would like to have seen more of in the plan is examples of actual projects; particularly in view of the fact that your funds are so meagre and that you are asking in the next five years for $737.2 million which, I think, is about 16 or 17 times more money than you have gotten already. It just seems to me that in order to sell Congress on what you really want to do, if you got the money, it would be well to give them some particulars on how some of these projects worked that you have already gotten "onstream. ,, I think it is just human nature to get excited about something you know something about. You can see the "flesh and blood" of the thing, how it is really working on a day-to-day basis. I think you can do this without any expensive presentations, slick paper, color photographs or anything like that— but even that might be a worthwhile investment. Second, I think it would be a good idea if you had a few more specific procedures as to how you are going to attract these high-technology, high-wage industries into the region. Maybe it would be well to have some plans on how you would use a regional development bank to lend them money; what kind of tax incentives various states, substates, regions or cities would be willing to offer; then, of course, what kind of businesses would you be most interested in getting: manufacturing; R&D services of one kind or another; big businesses; small businesses; etc. Naturally, I hope you are going to put some emphasis on getting small businesses in, but are you also going to put more emphasis on enlarging and assisting the businesses that are already in the region, or do you plan to import some from, perhaps, overseas? Third, is the matter of research. I notice that research occupies a lowly eleventh in your scale of program priorities. I suppose research in a way is sort of like the "chicken and the egg." You cannot do research unless you know what you are going to research on. On the other hand, it is pretty hard to set program priorities without some kind of research to know which ones are going to be the most beneficial, which ones are going to be the most cost effective, and so on. That is all I have. Mr. POYTHRESS: I think all three are well founded and I think all of us want to jump on all three points. We all know in our own minds that we have good responses. If anyone would care to— Mr. BUTLER: "Fools rush in where angels fear to tread," you know, but your point is well taken. One of the very difficult things about presenting a plan to a group of planners — such as this group — is that you cannot bring into the briefing every implement or every tool that you used. Your point is extremely well taken. We have done exactly what you talked about— let me explain a study prepared for us by Hal Williams. This is a study where we went to the field and 21 evaluated our project. It was done in 1975. You may want to take a look at it; it is pretty thorough. How many projects have we touched? Mr. POYTHRESS: Two hundred and some. Mr. BUTLER: What we did was evaluate what had happened from 1969 to 1975. Based on that, we took the initiative and formed what is now called the Plans and Evaluations Office, of which Dick Poythress is the head. It would be absolutely erroneous to sit here and tell you that we have a handle on how to evaluate projects. We do not, but we are doggoned sure working on it. We are a lot more knowledgeable and better off today than we were a year ago. I think that if we can get through another year and people do not slow us down too much, a year from now we are going to have a very good evaluation procedure that we can apply to all projects. For example, when we write the grant before the money is ever given, we will set up evaluation criteria. We are setting those criteria, and we are going to measure those criteria at the conclusion of the project to say you did or you didn't accomplish what you should have accomplished. If you did not — why, and if you did— why; so we can articulate the final outcome. I guarantee that the plan that is coming up will list reference words, such as that of research and so forth. We are extremely fortunate in the Coastal Plains. Some areas do not have our good fortune. We have the Southern Growth Policies Board in the Research Triangle Institute in Raleigh, North Carolina. Just to show you — I brought some of their studies. But the very thing that you are talking about is exactly what that group is in existence for, e.g., researching trends, patterns, etc. They do not fund projects or develop plans, but here is a study that they did, entitled, "The Future of the South." Again, there must be 15 different studies. Here is another that says, "Improving the Economy of the South Through Better Growth." I also brought a newspaper article that announced these studies: "South's Growth Outpaces the Nation — and Why." As I said, there is no reason why you should not have the benefit of these references. You cannot be provided all of them physically but I guarantee you that your points will be considered in the revision. As Dr. Anderson has stated, they are going to hold our noses to the grindstone to be darned sure that we do it. These things will be considered and, to the degree that we can put them in our plan without making it too bulky, you can be sure that we will. You can prepare a plan this big [indicating] that you distribute and nobody would ever look at it. But we know that this little plan we have now is being used. That is exactly what we want. So, I really appreciated the comments you sent in. I have read all of them, incidentally, and we really appreciate them. Mr. ETHERIDGE: Thank you, Mr. Butler. Mr. POYTHRESS: Let me add one more thing. As far as SBA's interest, we have known for a long time that we have had an excess of entrepreneurial ability, but not of venture capital. We have been working for 18 months now in trying to assemble a group who knows something about where venture capital comes from and how it can be transferred to the entrepreneur and the small businessman. We are working with a gentleman in your office who is a special assistant for entrepreneurial development. I do not recall his name but Stan Beebe of our staff is working directly with him. I believe he is from California, had retired, and now has come back toSBA. Mr. ETHERIDGE: Yes, I have heard that we have an entrepreneur in residence. [Laughter.] That's his exact title, by the way. I have not met him yet. 22 Dr. RAUNER: It would sound good if you called him a "billionaire." Mr. POYTHRESS: If he put out a book on how to become a millionaire. Mr. ETHERIDGE: Maybe he is a big businessman. % Mr. POYTHRESS: I do not know, but there is interaction between Coastal Plains and SBA in identifying the types of things that you raised. Mr. BUTLER: You raised a very good point, also, at the top of this presentation and I wanted to relate to it in my comments. I started thinking about the raccoon in my comments and forgot about your point momentarily, but it is a constant battle, as you may well understand, as to regional projects versus State projects. What is a regional project? In the Coastal Plains we have developed a definition that a regional project must cover two or more States. I cannot think of a better one. We have gone "around the Horn" on this subject. When Governor Holshouser was Governor of North Carolina, he said that if you put an industrial park in a State, that is a regional project. You cannot expect to make one industrial park from Richmond to Tallahassee and call that a regional project. But in any event, what you said is true. We need more money if we are going more fully into regional projects because in the regional project category what you are talking about are roads and large high-priced activities. For what we get, about $8 million, you can put in about 3/4 of a mile of interstate, or maybe not even that much. But there is something that can be done. Because we do not have the money is no excuse for not trying. Let me just read to you. These are impressive statistics as to what Dr. Anderson has done during his leadership of Coastal Plains. In 1964 we had $400,000 out of that $8 million that we could call "regional projects." These are truly regional. They include investigating the Ocala aquifer which runs from Ocala, Florida, up into the southern part of North Carolina. This is one good project. It is a regional project because you have to drill holes all up and down that line. If you put salt water in the aquifer in Ocala, it is going to end up in the water used by the people in North Carolina. But in 1974 we had $400,000; in 1975 we had $600,000; in 1976 we had $1 million and in 1977 we had $3 million. I do not want to get too committed about what is coming up in 1979 because next Tuesday we have a meeting to discuss this project package. It may be that there are some projects thrown out, I do not know. But if I may comment without getting specific, there are about $3 million worth of regional projects in the package for 1979. That is about 33 percent of what we are getting in funding and that is significant. I am talking about regional projects, not about industrial parks. I think that we can do something about regional projects and we are doing it; and I believe if Congress gives us more money, we will do even better. Dr. RAUNER: Department of the Army? Remarks by Department of the Army Mr. DILLON: Don Dillon. I have three things. I think the first may have been partially covered by some comments already. We thought that the kinds of projects which are most cost effective in obtaining the earnings objectives of the plan would be helpful to the Commission in deciding 23 which projects it ought to approve. Another thing is that I did not see any details in there for the support required by the Commission or other Federal agencies in arriving at the objectives of the plan. The third point is, and maybe you can add some more details on it, what is the Commission going to do to encourage the community services objective that you have to provide a climate for business and industry to come in? Mr. POYTHRESS: I missed your first point. Mr. DILLON: The kinds of projects that would be most cost effective in achieving the Commission's goals. Mr. POYTHRESS: We have been involved in technical assistance studies which identify industries by SIC code; those which pay the highest wages. When we first started putting this plan together, the decision was made not to discuss projects — projects that had been completed or projects we contemplated funding — except in the most generic sense. We referred to those in passing in the plan, but we did not go to the trouble to identify through so-called input-output analysis the precise SIC code industries that we wanted to go after. The change in emphasis that has been made is to pretty much leave up to the individual States their setting of priorities in attracting the types of industries that they want. We help provide the infrastructure suppport the community would need in order to attract those types of industries they wanted. As far as not having any details for the required support by Federal agencies, as I mentioned in my presentation, we have had very little influence on Federal agency action in the past. But based on Mr. Houstoun's comments, we hope to turn that around through this very body right here. We do not have precise details on how we are going to do it, but I hope that we have made a crack in the ice of required Federal agency support. I think if we are going to address that at all, then this is the proper body to begin. Again, we did not outline specific types of projects which should be funded within communities. However, within the framework of community services objectives, I think it is pretty generally known the types of infrastructure projects that are required in order to prepare a community for industrial development. Probably the most significant problem in this now, or at least the most significant opportunity, is the development of the ability of communities to plan for growth that is inevitably coming. It cannot miss. Getting ready for it is the key thing. We fund many projects in this area. We have certified cities programs where we help Governors' offices sponsor community development programs, and technical assistance to substate districts, which in turn provide guidance to communities on computerized taxation capabilities and other various types of things to increase efficiency in communities. I believe I have responded to all of the points that you raised. Mr. BUTLER: Again, it is unfortunate that you have not had the experience that we have had with this. The question is: Do you really put all of them in the plan or do you not. We had a very thorough study done and given to each one of our States. It is titled "What pays off in the way of getting industries to the Coastal Plains Area." The thing is about that thick [indicating] and it tells you what to go after— electronic industries, for example, because they are very high technology and they pay high. As to the plan, I wish I coula say that the States are going to follow it verbatim. That would make things much easier for us. But we are all learning and progressing and they are using the plans more now than they did in the past. We are doing better in preparing our plans. I think that is significant. What I am saying to you is that there is progress, although we aren't there yet. 24 When it comes time for the review of our plan we will just have to sit down and discuss whether we ought to include more of these things which we elected not to do in 1975, because, as I said, for budget constraints. Of course, we are under budget constraints. You in the Army certainly know about being given a dollar figure and being told, "Okay, stay within that." We have the same thing. We do appreciate your comments and it may be that when we go through the plan again we could reference all of the documents. Then people such as you who just get to see the document and not the research and the library from which the plan sprang will know that there are other things that went into the plan. Mr. DILLON: Part of it depends on how you want to use this document. If you have done it and said, "Okay, we have fulfilled our requirements; let's stick it on the good ole shelf. We have all these other things we can use" — that is one outlook. Another way is to have each member have this thing sitting on his table. When he reviews each one of these things, he can flip over to it and say, "How does that particular proposal stack up against the general guidelines we have all accepted," and then proceed forward. If he uses it that way, then I think it can be of some value to at least summarize this big stack of things and put it in the document at hand. Mr. HIGGINS: From the point of view of a State that is in the Commission, the plan is being used exactly the way you were talking about. You really are required to have a State investment plan, which essentially operates under strategy and develops criteria based on the goals and objectives in this thing. Then as a part of that plan we also evaluate projects based on expansion of the strategy, goals and objectives of the Commission. This is not something that has been on the shelf, even though the thing is not adopted yet. It is still providing guidance for each of the States in the Commission. Mr. BUTLER: Greg is with Governor Askew's staff. He is Governor Askew's officer for Coastal Planning. But again, we will certainly consider all of these things. Everything we do in Commission activities — it is a three vote out of five, plus the Federal Cochairmen. We cannot do anything in the policy area without Commission approval, as all of you know. Your submissions raise very good questions, and we appreciate them. Dr. ANDERSON: I have to send some memos reminding them of that fact, too. Mr. BUTLER: He even says things about the tone of your voice— you see what we have to put up with? Dr. ANDERSON: Mr. Dillon, you made another point. Would you repeat it— I think it was number two. Mr. DILLON: The details for the support required by the Commission and other agencies to get the objectives in the plan. For example, what should those other departments, such as the Department of Transportation, Department of the Army, be doing that would contribute to the objectives of the plan? Dr. ANDERSON: I think that is the key point right there. In a very realistic sense, this Commission can never replace any of the existing agencies. What we can do is strictly function as a support service for you and as a conduit for improving the effectiveness and coordination between your agency and agencies at the local level. We need you desperately. I think we have been sort of negligent there because my predecessors had not actively pursued the support of existing Federal agencies, ncr coordinated with them effectively. I think some of it has been because the Commission has not had the kind of respectability or visibility if should have had. Therefore, it is very difficult to "marry the Prince with the Pauper." 25 Therefore, I think until we receive increased respectability, not only politically but also through increased funding allocations, it is going to be very difficult for us to reach the propei level. But I am going to actively pursue that, and you are going to be seeing a lot of me. I will be trying to solicit your encouragement and come to your agency to try to help you at local levels. Mr. BUTLER: I appreciated your comment about us getting in touch with the Army Corps of Engineers. I could not help but think of Murrells Inlet in South Carolina. They have a dredging problem there. Actually, Murrells Inlet was a project in which we gave the Corps our money and they did the dredging. They did the whole thing from the top down. So we do work with the Corps. There have not been too many projects in which we collaborate with the Corps, but there have been an awful lot of them. Murrells Inlet is one that immediately comes to mind. You may be familiar with that problem where the harbor had silted over. It's a tourist town and they make their living by catering to the fishing boats going in and out of the harbor. It silted over and the Governor wanted to help so he approved a project to shore up the harbor. The project, by keeping the harbor open, also benefitted tourism in the area. So we worked with the Corps to accomplish this. Dr. ANDERSON: Mr. Dillon, does the Corps presently notify all agencies such as ours of the programs and projects that you are going to work on? Mr. DILLON: They have a bunch that they notify. The coordination is just monstrous. I'm sure the other agencies have some experience. Almost all of our projects are coordinated through the A-95 agencies, also. I really do not see how they could miss. I think it would be good for the Commission to be seeking out other agencies, too, and finding out what their programs are and how they can help support the programs. Mr. HIGGINS: If I may, prior to appointment of the Federal Cochairman, we recognized that the Commission as an entity really could not do too much in the area of coordination, that there was no history of relationship between the Federal programs and Commission programs — very little relationship. So on the State level — and I think the Federal agencies by and large relate more to the State or to local government— what we have done is to look at State programs and Federal programs as long as they affect the Commission program and to try, if we cannot do it at the regional level, to tie things together at the State level. As I say, we have just begun that process. Maybe, if Claud is successful, it may not even be necessary. It is incredibly difficult to try to find out who is doing what to whom at what level then to try to make some sense out of it and develop a coherent program. It is something, I think, everybody in the Commission is aware of. Dr. RAUNER: Let's hear now from our simplest agency — HEW. Remarks by Department of Health, Education and Welfare Mr. SIEGEL: My comments are related to what my predecessors have said about having more specificity and including more of what Federal agencies can do. This is especially true since one of your programs is education, which is an HEW program, where you would be looking for funds, or even program strategy for vocational education from HEW's perspective. 26 We also noted that, although health and general education were listed as tenth or eleventh priorities, from our perspective, health should be moved up to one of the infrastructure priorities. In any planning for people moving down, where you have a large new population growth, it is obviously important, especially given the Administration priority to health and health planning. Mr. MAGOULAS: I would like to respond to that since we tend to agree with what you are saying. However, early on when the Commission was reexamining its program areas and the kinds of activity needed, we took a look at health projects and at the size of the HEW budget. We figured out that you people were having enough trouble trying to solve those problems and a little bit of money was not going to do it. Having only limited resources, we put them where we thought they could do the best; and obviously viable health programs just cannot be developed with a little bit of money. Mr. BUTLER: Additionally, bear in mind that we were not given a mandate from Congress to participate in health projects until the '75 amendments. It is in the legislation now. Congress is talking about diagnostic centers and preventive centers, as opposed to medical research, for example. When this plan was made, those things were new on the scene. It does not reflect the fact that we are not interested in them. It is just that in the stage of development, these areas were a very new thing to us. We have a number of projects with HEW. We cooperate with your office in Atlanta. We have mobile dental clinics — one up in the northern part of South Carolina— a diagnostic center, and so forth. So we want to assure you that that was not done through lack of interest. It is low on the priority list because the thing was just getting off the ground when the plan was developed. Mr. MAGOULAS: In terms of vocational education, I do not remember. I cannot give you a statistic but we did take a look at it. It is a major problem and has been. Over 70 percent of our supplemental grant money over the years has been devoted to vocational education projects. It was the first thing the Commission really went into in a big way. It may not appear so but there was a coherent plan for this. The states looked at it and we worked on it very diligently, so it has been a major exercise for us. Dr. RAUNER: From Labor, now. Remarks by Department of Labor Mr. SEEFER: My comments parallel many of the preceding remarks. A major theme which comes through in this report is the lack of resources that the Commission has. I am not sure if that is the appropriate focus, because of the other Federal agencies' activities in these States comprising a region. I would think that perhaps the Commission could take a larger perspective on the problems by trying to act, not necessarily like a coordinating agency, because it lacks that kind of mandate in its charter, but I believe it could serve a more useful activity by perhaps working as a clearinghouse to determine what types of Federal programs are being conducted in this region. As far as the Labor Department is concerned, substantial funds are allocated under its 27 Comprehensive Employment and Training Program, CETA, which is going up for reauthoriza- tion. And like some other programs its resources are mandated by formula. These are legislative mandates, basically. Employment and training funds are allocated to localities which are generally cities or counties with a population of 100,000 or more. Smaller units are administered under a State concept by Governors. These funds are allocated according to a measure of need which basically reflects unemployment. I think it would be useful if the Commission could do an assessment of what the magnitude is of Federal assistance efforts in housing, transportation, Corps of Engineers — as a clearinghouse activity. I think in assessing the potential for economic development it has to look not only at the Commission's own investment projects, but to take a much larger look at trying to assess the potential. I am also concerned about how the Commission measures output on the supply side with incoming industries. I think attention needs to be focused on that. Certainly, the Labor Department provides manpower funds to the Commission with funding levels for different localities in the region. Possibly the Commission could also work more closely with our CETA prime sponsors in getting data from these sponsors and in trying to relate more closely industry development and manpower training. I think that more emphasis needs to be given to the President's urban-policy develoment which Mr. Houstoun touched upon in relating not only the Coastal Plains Commission's activities but all of the Commissions' activities with this new policy thrust. I think there are other areas the Commission could take a look at; for example, the role of Federal procurement process on creating jobs and trying to focus to determine how the whole Federal procurement process can be better utilized to help create industry and to lower unemployment. There is a policy called, Defense Manpower Policy No. 4A, which reflects Public Law 95-89 which sets aside Federal procurement dollars to be used in areas of high unemployment. Federal procurement is probably from $65 billion to $75 billion per year and now certain Federal procurement projects can be "set-aside" to firms that are in labor surplus areas. I think this is something the Commission should look at in trying to evaluate the potential and have the full range of Federal activities related to its concerns; not so much as a coordinator but perhaps as a clearinghouse. I would like to see a little bit more done in terms of developing some alternative strategies and perhaps some more specificity added. What are some of the alternative strategies the Commission might consider rather than the single overall plan? When the Commission talks about plans to accelerate the growth of the lagging districts, what are some of the specifics to that strategy? What are the options it could consider? I think in that way, perhaps, the planning document could be given a little more "teeth." Otherwise, I am afraid it smacks a little bit of generalities and lacks something you can really get into and analyze. Mr. POYTHRESS: On several of the points you have made it is impossible to disagree with you. As far as the Commission acting as a clearinghouse for Federal agency activites, of course, it would be nice if the regional commissions could get thoroughly embedded in that type of role. But as I mentioned a little bit earlier, I think if we are going to get actively involved, this is the place to start— with this body talking about the types of agencies we are talking about right now. As far as conducting an assessment of Federal expenditures within our region to help us develop strategies, to help our States identify what is going on with various Federal agencies, it is impossible to disagree with that. I think that it is a very good approach to take, to help our States. It has not been addressed in this plan, however, nor do I necessarily agree that it should 28 be in a regional plan that is used as a guidance tool for the Federal Cochairmen and Governors. Nonetheless, it is a very good idea. As far as measuring industry investments with population needs, I think that is a valid point and probably is something that should be addressed in a more comprehensive plan than the one we have here — one that is more detailed. However, when we address the subject of industry solicitation and attraction, we identify the types of industry that we should go after— that is, we would not identify cut & sew as a proper industry as one to solicit. The States themselves will often determine the final location where the plant will be located. The States themselves go to great lengths to identify the kind of characteristics of an area which would appeal to the industry under study. All of our states have various modelling techniques for identifying the types of skills that exist in various parts of the State, as well as unemployment rates that exist. You know that as well as anyone. We do not identify within our program, however, specific localities for specific types of industries but recommend the types of industries that would be good for a given area. Mr. SEEFER: You do provide some type of technical assistance and analysis that might help the States in that regard? Mr. POYTHRESS: Yes, we do that; by all means. As far as the President's urban policy, I cannot say the Commission has come on record as very strongly supporting the President's urban policy, nor has it come on record as being very much against the President's urban policy. It is just that at the present time we do not have strong signals about which way we are going in this particular area. Dr. ANDERSON: The Commission has been invited and encouraged to be involved in planning, urban policy, urban strategy. Mr. MANHEIMER: Except that as more and more of the categorical grant programs might be tied to the urban policy, you might have to show that you are conforming in certain ways in order to come out high in an evaluation for discretionary money, for example. Dr. ANDERSON: I hope we can get in before that, though. Mr. POYTHRESS: North Carolina is very much on record as supporting — striking a balance between urban and rural problems, rather than skewing things in any one direction. They see problems in small communities that are growing which are not prepared for growth. As far as Federal procurement within our region for the purpose of mitigating unemployment, again this is something that would be against "apple pie." It is again something that is in this particular plan, although I cannot say it will not be in the updated plan in the coming year. As far as alternative strategies in the plan, we did not go to the trouble of treating in the plan all of the alternative strategies that were considered in the planning process over a period of a year. You will notice in several parts of the plan, especially toward the end, that we did outline various types of strategies that could be approached in providing funds to various lagging districts. We did not go to the trouble, however, to list all of the various types of strategies and alternatives discussed. Once we had worked out a strategy, however, that was the one we pretty much went by. Rather than listing or discussing the discarded strategies, we elected to pursue only the one selected. For informational purposes, I think it might be good if we did have more discussion of the types of things that were considered as far as alternative strategies for development districts. Again, there is some discussion — admittedly not very much — in the plan of the types of 29 alternative strategies that were considered in addressing problems in lagging districts. In the updating coming up this year, there will be more discussion of the alternative strategies. As far as generality of the plan, I have to plead that, when the amendments came out and said that we had 120 days, it jumped out in very bold letters. We outlined a schedule whereby we could get the plan updated in 120 days. Fortunately, we got extensions on it but once we had the strategy outlined and the timetable set and the priorities set for what was going to be discussed and how extensively it was going to be discussed, we were pretty much locked in. I have to plead guilty to the generalities that exist in the plan, but with the update, again we know that we will have more time and will be able to treat more extensively the areas that are discussed in this particular plan, as well. We will be able to address the various projects more carefully and more extensively than were addressed in this plan. We will have time to update much of the data that was out of date when we put the plan together to begin with. The gentleman from BEA was most observant when he pointed out differences in the use of Census data, county business-patterns data, data meshed together on employment projections, and unemployment projections. It was just a matter of problems encountered in the "allocation' ' process of taking that data and trying to break it down to the county level for which there was very little background. At best, that is a very precarious technique. It was what was available at the time and it had to be used. Again you are right. This is pretty generally stated. But with the time constraints, we had no choice. Mr. SEEFER: I understand. Dr. RAUNER: We have a very strong representation of all of the other Commissions at the other end of the table, but in the interest of time, I will make a brief detour and turn left rather abruptly to come back to the other agencies. Then with additional time, if you want to yell and shout at your peers, there will be an opportunity. In any event, may we hear from our representative from the Department of Energy? Remarks by Department of Energy Ms. BUFFUM: You are going to make me feel guilty for having bypassed all of those other people. I am Elizabeth Buffum, representing Assistant Secretary Hughes of the Department of Energy. As everyone here knows, we are fairly new at this stuff. Regional planning is something we are still trying to figure out ourselves. You are all doing a much better job of it than we are. Mr. BUTLER: You're not part of the "Georgia Mafia" — not with that accent, anyway. Ms. BUFFUM: Oh, no — from the D.C. area. I was born here. Our comments were sort of critical. The reason is, if you look at that list of objectives and goals, you can think of it as being totally inclusive or totally exclusive of energy. Energy is not listed as one of the priorities, but the priorities listed do include energy in the considerations. We had the regional representative review this plan. As I said before, you are ahead of us in the regional planning game. Although the Department of Energy has some money set aside for regional planning 30 activities, it is a very small percentage, and no one is going to venture to say at this point how it is best spent. What we have done is establish a Planning and Analysis Division in each of the ten Federal Regions so their coordination with the rest of the Commissions, and so forth, is just being established. But Assistant Secretary Hughes has the day-to-day responsibility for making sure that this kind of coordination and activity gets underway. These representatives report directly to the Secretary of Energy, so in the future you will have a contact in your area that will be working and providing for you — you said you are a support service. We hope we can provide that service for you as well. The information we do have available proves that there is a high correlation between energy costs and supply and economic development in an area, and that information is available to anyone who wants it. Because industrial and commercial development is rated as first priority by the Commission and the relationship between energy costs and supply to growth, the identification of energy supply as a second priority should be considered. Since this report was completed in 1976, I understand why energy is not listed as any of those things. However, due to developments in the past couple of years and because states are creating energy departments and becoming involved in energy studies, we think that probably we can work together to provide some assistance to you in that area. The comments we submitted go on to talk about the resources available in this area and how they lend themselves particularly well in the Southeast to enhanced industrial commercial development. For instance, water resources gives this area a clear advantage over some of the other regional areas and would be particularly conducive to the development of various forms of industry. Also, there are instances of working with other Federal agencies and State governments in the development of various technologies in these areas that could be helpful to you. In general, it is hard to comment because energy is not specifically or adequately addressed in the plan. But we think that in the future it should take a high priority. Dr. ANDERSON: I think in some degree you are correct in your assumption that the data itself tends to exclude the energy priority. But there is another reason, too. I think Mr. Butler wants to address that. Mr. BUTLER: Yes, I would, indeed. I have read your comments with a great deal of interest. I do not necessarily take exception to them, however, I do not want to make excuses, either. I do not mean it that way at all. Howard Cossell and I tell it like it is, and I am going to tell you the reason it is not in there is because of one simple thing. The five Governors and the Federal Cochairman at that time said, "Everybody is studying energy and we are not going to take the pitiful little money we have to study energy." The other part of it is, you Energy people must get off your "duffs" and get an energy policy. It ought to come from the topside down not from the bottom up. We have tried to develop policy from the bottom up and it does not work. You can't have 50 States going off in every direction like spokes of a wheel. If you ever get out an energy policy, I guarantee you that our Governors and Dr. Anderson are going to take the energy problem and run it through an analysis again. The Commission told us that we were not going to get involved in energy. The official who said that, the Governor who said that, is no longer a member of our Commission but it was agreed to by all the other Governors. He said, "Everytime I turn around someone is in there saying, 'Do this with energy, do that'." And he says I am not going to approve the Coastal Plains delving into this area. We have followed that direction, so that was the reason. There is a second point I would like to make, getting back to the amendments. The 31 amendments did not tell us we were compelled to participate in energy projects but told us that we were authorized to do so. The amendments did not come out until '75, which is the point I'm making. What I am saying is if we can get something from the top down to where we have something to plan with we will certainly use it. If our Governors and Dr. Anderson say "You get involved in energy," you can bet your bottom dollar we'll get involved — I don't know how we will do it — but we will. We do not normally do what they tell us not to do and vice-versa, so I can only say that your comments are good. However, I suspect that if the Congress approves an energy package and gives us some guidelines and barometers to operate on, you are going to see that energy will become a priority. The Far West Commission, or the Old West, has it as its number one priority. Why — because it is in the low-energy supply or high-energy use area, whichever way you want to look at it. They have devoted most of their talents and money to this problem. They can speak to it better than I. Very definitely we did not put energy down there because we felt it wasn't important. Everybody knows that it is probably the most important problem we have facing us. We did it because everybody at the time was getting involved, and our Commission members didn't want us joining the rush. Ms. BUFFUM: It is the same kind of question as how much money you allow for research. You have to know what the priorities are in order to make those assumptions. We certainly hope that everything you said is going to your Congressmen, because we are waiting, also, for that framework. It is a very frustrating task to support policy that does not yet exist. We have to work with that. We are doing the best we can there, but there are some things you can do. We do work, for instance, with the New England Regional Commission on various planning activities, and they have much different problems than you do in the Southeast. We have found that association to be very useful. I noticed that on your Advisory Committees there is no representation to at least voice the concerns for energy which, along with environment, would be very helpful. I'm not saying you should go and spend huge sums of money. Money is not the only resource we have left. We have human resources to which we can provide some type of overview assistance in some way. I think the coordination of Federal activities that everyone has pointed to before would be an area where we could provide some assistance. I am not suggesting that you start pouring huge sums of money into energy planning. I think that is a mistake. Mr. BUTLER: As I recall. Dr. Anderson still has one appointment to the Environmental Affairs Advisory Committee. I'm sure he is going to put energy in, and an Ms. person, too. Ms. BUFFUM: I noticed they were all male-type advisors, as well, so I would suggest that you consider— Dr. ANDERSON: Obviously, being a member of a minority group I will rectify that problem. Ms. BUFFUM: We are not a minority but we are not represented. Mr. MAGOULAS: The bottom line in all of this is that when the plan was prepared, there was no Commission policy, as Mr. Butler expressed. Considering what is going on today and everything else, there is a need to rethink the process. Dr. ANDERSON: Yes. That plan is 3 years old. 32 Ms. BUFFUM: That was one of the comments. Mr. MAGOULAS: There is no dispute with what you are saying. It is just that maybe we had better go back and take another look at it. Dr. ANDERSON: To be perfectly honest with you, since our last Commission meeting there are a lot of new programs and projects we are beginning to focus on that are not in the plan. Although I'm not even sure if it would be appropriate at this point to include them. Because of environmental and social changes, we are beginning to refocus; plus, as Cochairman, I am beginning to add my own shade to quite a few programs and projects. So I am aware of your concern. I think we can appoint either a woman or a minority from Energy to the Commission's Advisory Committee. Ms. BUFFUM: We've taken Governor Busbee's person up here. Maybe we could trade, or something. Dr. ANDERSON: We do appreciate your comments. Ms. BUFFUM: As a new Department we do have the advantage of understanding what some of these problems are. ERDA was unique. ERDA really did not have any considerations of working with regional commissions, and so forth. We are very aware of it at the Department of Energy. Energy is a regional problem. In the Assistant Secretary's office, we have people specifically assigned to working with the regional commissions, the Federal Regional Councils, and so forth, on these kinds of coordination mechanisms. We see ourselves as a support service to you, as well. So I invite any assistance that we might be to you. Dr. ANDERSON: To go back and interject a point here, I am trying to sensitize you to the fact of the funding even though you indicated that there are resources other than funding. But you are dealing with a very politically-sensitive program when you start talking about a Commission — a partnership between the Federal, State and local governments. When you start breaking down the kinds of money we are working with, you are talking about approximately $9 million. You knock off $3 million for regional projects, that leaves you with $6 million. You knock off your administrative overhead and break that down to a State allocation, and you come out with approximately $1 million per State. It is difficult to get a Governor to come to sit down and spend days and weeks arguing over $1 million. Most of them will tell you, as most have told me, "Claud, I only come to these damned meetings out of respect for the concept and the Federal position that you hold." They say this because their time could be better spent elsewhere. You are really not talking about very much money. Until we get the kind of money you are talking about, they are not going to be very much interested in allocating that $1 million on an energy program, which would totally consume our budget— because of the magnitude of the problems. They are interested in trying to get the biggest "bang" they can for the small bucks they have. That is really the problem. It is a political issue, too. Ms. BUFFUM: With the increase in status, or whatever you want to call it, you can certainly help direct the spending of those huge sums of money in your area. Dr. ANDERSON: That's what we are very much interested in trying to do. Ms. BUFFUM: Some of the other commissions are actively doing that already or are submitting their own proposals to the Department to run projects in their areas. That is certainly within the boundaries of what you can do, also. I'm not saying that the Department of Energy is 33 ever going to hand you the money and say, "Do whatever you want with it." But I think you would have the power, at least to suggest, how some of that money could be spent. Dr. ANDERSON: The biggest thing I got from you this morning is your support and encouragement, and we will do everything possible to work closer with you and to try to assist you in directing your funds and getting the most mileage out of your monies. I do not foresee any sizeable increase in funding for another 2 or 3 years. Being realistic, we cannot talk about $1 million. Most Governors will tell you that his budget is about a hundred times larger than that. I think Florida's is something like $6 billion, and he is not going to come spend a couple of days arguing about $1 million. Mr. BUTLER: Let me just strike one blow for freedom here if I may, because I am not sure that this is the place to get on a soapbox. But every comment that has been made really proves one thing; that the regional commissions have a tremendous amount of potential. I have eight professionals and five secretarial employees. We have five major program areas, and we are dealing with about $8 million plus a large number of these Title X emergency work programs. We have 290 counties in five States and 17 independent cities. That isn't very much in the way of employees for the job we have, but we get the job done. Almost everything that you people have brought up, we are contributing to, or participating in. If you have any influence with Congress, then tell them that a working system is there, the mechanism is there; it is working. All you have to do is give us the funds and, we can work miracles. I think that is the one thing that has come out of the meeting this morning. We cannot do everything with the people we have now. But we would love to get into energy. Give us a little bit more money, one or two people, and we will be able to accomplish anything. Dr. RAUNER: Bernie, who has been most patient there — from HUD. Remarks by Department of Housing and Urban Development Mr. MANHEIMER: Bernie Manheimer. As we mentioned in our written comments, we would like to see a closer tie between community develoment and economic development. For example, some of the priorities seem to be in order, but when you get to number seven it says, "Infrastructure community development improvement in housing," and what have you. Energy was included. You then look at number one, "Industrial and commercial development," and ask is it likely that industrial and commercial development will occur if you do not have infrastructure? We would like to see a tie-in, but perhaps listing priorities is not a way to do it. We would also like to see, even though the plan cannot get into the details of planning in every substate district or locality, some evidence that there exists a whole maze of local plans that is related to the projects you are going to select. Your projects should consider the plans that are already in existence. I know of one land use plan, for example, HOPS, Housing Opportunity Plans, that we are asking the regional people to prepare and the HAPS, Housing Assistance Plans, that localities prepare in order to get community development bloc grants. It seems to me that, even though you do mention it, if you undertake industrial development, you are going to have to worry about housing. Any plan that is going to look at economic development is going to select budgets and had better look at community development as a 34 parallel. As a matter of fact, it may sometimes even come first, but you had better look at it as a parallel. We are trying in some way to look at budgets for economic development. We choose what projects we fund in terms of community development. It does not make sense to put a project in a community that does not have some economic viability, nor does it make sense to build a community that has economic viability or potential for economic growth but has no potential for community growth, no potential for getting housing and things you need in order to support the economics. I would like to see that tie-in in the plan. Mention needs to be made of the relationship to existing local, regional and even State-wide plans that have to do with land use, housing and that type of thing. I know the plan was prepared earlier, perhaps before the impact was going to be recognized, but there is at least one area of Georgia that is going to be faced with such a significant impact in terms of housing that you ought to mention it in your plan. Mr. BUTLER: Is that St. Mary's? Mr. MANHEIMER: Liberty County and Camden County, Fort Stuart. It seems to me that, if you want to have a say in determining how Federal funds are used, you ought to get in on that action. The Office of Economic Adjustment in the Department of Defense is happily involved in trying to plan for the growth that is entailed in increasing Fort Stuart from about 2500 people to about 25,000 in a couple of years. Mr. MAGOULAS: Fort Stuart is going to get bigger? Mr. MANHEIMER: Much bigger. Then the next county down is Camden County. Mr. BUTLER: Where the Polaris submarine base is. Mr. MANHEIMER: That is going to go up. So it seems to me that, even though this is a region-wide plan, that is such a significant growth and means so much to the region that they ought to include it, weigh the alternatives, and direct some of the resources there. Then in response to your overall question, HUD has little discretion for a lot of its money and has no discretion in terms of picking its recipients, but they go to localities, primarily. Dr. ANDERSON: I'm glad you responded to that because one of the problems I am having is down in Statesboro. Do you know where Statesboro is in Georgia? Mr. MAGOULAS: It's about 40 miles west of Savannah. Dr. ANDERSON: West of Savannah. You see, Governor Busbee has asked me to try to assist him in that area. Also, there have been several Congressmen- Mr. BUTLER: I think "Bo" Ginn was over to see Patricia Harris — Dr. ANDERSON: And they have said, "Claud, you have the ability conceptually to assist us in that area but you do not have the funds, you do not have the support." That's the reason I am extremely interested in trying to tie in with HUD. I am concerned about the qualifying factors for an area. I do not want to insult anybody else's intelligence by taking the time to do this, but in an area needing low-income housing — what does an area have to have to qualify? Mr. MANHEIMER: Substandard housing, according to Census figures. 35 Dr. ANDERSON: That is basically it? Mr. MANHEIMER: Basically, yes, for the small cities program, for community develop- ment programs which are discretionary. There are poverty, extent of housing — overcrowding, substandard housing— those types of things are our criteria. We can get them for you, as a matter of fact. Wherever you are you can go to the local office and get it all. That is what I was going to suggest to you. You people can become the experts. For example, for HUD, UDAG, you can team up with your localities to help them point up the need. Dr. ANDERSON: I really need your help on that one. Fortunately or unfortunately — one way or another— we made the CBS News down there in Whitesville. They really need some funds for housing down in that area. You cannot get any poorer than that. Someone indicated to me that that area did not qualify for low-income housing. That is not even substandard housing. It is sub-sub-substandard — anything you can do to assist us there. That is why I am going to come over to see you; I'll be working very closely with you and all of the members. You will probably get very tired of seeing me because I am definitely going to be seeing a lot of all of you. Mr. MANHEIMER: Anyway, that is the way to go, just as you are going now. Instead of trying to be a funnel for Federal funds and having them come through you — which is unlikely in many of them — you can work from the bottom up and get the communities to stress their needs in such a way that you raise the potential for the Federal funding. You can help them set priorities among themselves, even to who should apply, since we have limited funds in every state. There are urban development action grants, for example. But that will require kind of a grand grantsman strategy on your part which you might want to develop. Dr. ANDERSON: One of the things we might do is to conduct a study to determine what their basic needs are and then share that with the other Federal agencies so they can have some plan for assisting them in that area. Mr. MANHEIMER: In the development action area we are trying to tie community development to economic development. The community has to have something in place. It has to have private sector commitment; it has to have certain kinds of assurances from HUD that the project will go off when it says it is going to go off. If you can help us as a coordinator to line those things up, it should have or it helps to have other Federal agency support. Dr. ANDERSON: Okay. Mr. MANHEIMER: If you tie those things together, you are increasing the opportunity for the community to get those kinds of grants. Dr. ANDERSON: I thank you for that. Do you want me to come over and see you sometime Mr. MANHEIMER: Certainly — sure do. We have someone in HUD who is terribly concerned about coordination. We want to coordinate with other Federal agencies. We want to find mechanisms like states or localities, or even like regions. We can do this with regional commissions to try to see that our money goes in a logical way to do what the regions want to do. Dr. ANDERSON: I thank you for that, too. 36 Mr. MANHEIMER: One other suggestion I have is that it might pay to stress in your plan some kind of prototype activity; for example, Brantley County in Southeast Georgia. It got a HUD innovative grant. We were so happy with it that we gave them a good deal of money for a county that size to do this energy business. It seems to me that a mention of that in your plan might give other localities or other counties of yours a look at what Brantley County is doing that is a little different. They save energy and money for the county — that might be a prototype for the other counties in the area. Mr. POYTHRESS: Mr. Martin is a very aggressive person. It took him a long time to get the money. We like to think we are doing what you are talking about doing. We have 49 substate districts in our five States. Georgia, which leads the Nation in the formation of districts — we work very closely with them. By the time a project gets to us it comes from the bottom and the substate districts are prime movers in getting projects developed at the local level. They have staffs and they are governed by a board, two-thirds of which, in most cases, is composed of elected officials. They set their priorities. A lot of times they will come to us and to the Federal agencies simultaneously. It may be HUD, EDA, EPA — we get projects like that quite often. And 90 percent of the time when money is going to a State it will come up one way or another through the district, if for no other reason than they are the clearinghouse for A-95 at the substate level. But by the time it reaches the coordinator, he has knowledge about other types of funding that are available, and by the time it comes to us we like to think we contribute to it even more. We funded feasibility studies in the Fort Stuart area, we participated in the HUD CD-block grant and the GLYNNCO expansion. We've done feasibility work in the St. Mary's area where we recognized the fact that it is a high potential growth area. Mr. MANHEIMER: It ought to be in the plan. It is so big in a sparsely populated area. Mr. POYTHRESS: Maybe we should list the more substantial projects such as the one in Brantley County. Maybe it would improve the plan as a whole. Mr. MANHEIMER: Brantley County could be the prototype. Other counties have the potential to do this thing that Brantley County is doing or can benefit by the results of what they are doing. Dr. RAUNER: Do any of the Commissions' representatives want to offer any remarks at this juncture? Remarks by Southwest Border Regional Commission Mr. BILL BUTLER: This is Bill Butler of the Southwest Border. This is really a political document as well as a planning document, and by the absence of things like this strategy, you do not give full credit to the actions you describe. You have indicated many examples, I think, today which show you are well aware of what the development situation is within the region. But it does not come across in the plan. It comes across as too general. Dr. RAUNER: Incidentally, as a footnote on that, you may or may not all know that the 37 proceedings here today are prepared in published form. They accompany the Secretary's transmittal of the plan, provided she approves it, to the White House. It is a total package which includes the blue-covered document, all of the comments, plus all of the conversation we have had here today. So that is one way, Bill, if anyone has the time and the interest to read it, to show what is in the document because of what we have all heard from Dr. Anderson, Dick, Jim and the rest of us. It is a way of embellishing the printed thing called, "A Plan." It is not the total but it helps. The problem is to get people to read it. Mr. B. BUTLER: The plan is really the only comprehensive document that exists that involves the Governors and involves the locator region. I think that really has to be brought out, and it means that the Federal role that is played in the whole process needs to be spelled out a little bit more, too. There are actions that can be taken, have been taken by Federal agencies, as well as in the public sector by State and local governments, that really fit in with the overall strategy. You cannot put them all in there, otherwise you would have just an unwieldy document. But I think you can pick certain things that would really strengthen the implementa- tion of that strategy for your region. Remarks by Four Corners Regional Commission Mr. HUNTINGTON: I would like to make a few comments. First of all, I was really impressed with the plan, particularly by the fact that it was completed at such a minimal cost of $17,000. Our own was more costly than that. I also liked the fact that it stressed the developmental role and the job creating role and the fact that you are working towards higher levels of compensation for jobs. I have on my desk today a copy of the personal per capita income statistics for all of the States in the United States. Anchorage was the highest and our own area here in Washington is the third highest. I was noticing that in your region many of them are quite low, as they are in our area. Underemployment seems to me to be a more basic problem than unemployment. I think you have also been a leader in a couple of areas. One is in the development of opportunities for minorities and also in vocational education. We in the West have always sort of looked to your States as being leaders in providing vocational education opportunities. I guess I am most familiar with South Carolina and their rather extensive program. I think the density of your population makes it relative. The fact that your population is relatively more dense than ours makes it easier for you to have schools located in close proximity to the population. I do not have any criticisms but I really do have concerns that all of us should keep in mind in view of some of the things that Mr. Houstoun was talking about— the changes we are likely to face, that all of our Commissions and planning processes should be considering. We should be aware of the fact that changes are coming in terms of getting into things in addition to economic development such as growth management, energy, exports, and the other things you mentioned. Also, Trafton Bean, who is our planning consultant, is here with me today. We wanted to learn more about this process. If the chair approves of asking him, I would like to ask if he has any comments. In introducing him I also want to say, referring back to our comments about the cost of our plan, that is not something that Trafton has contributed to. He has come in, and, following that, we went into a long process of trying to accumulate pieces from various States for our planning efforts. Trafton now has the task of putting all of that together. Trafton, do you have anything? 38 Mr. BEAN: I do not know that I was approved by the chairman but I will assume so. I have a couple of quick comments, somewhat in contrast to various departmental thoughts, that the report should be more specific in given areas. We are very much impressed with the concise nature of what has been stated. It is very effective and in many cases, I think, it gets to the "guts" of what a regional commission has to do to get support from its individual states — from those people who participate in the regional process. The fact that you have minimized the use of tables in this document, also, 1 think, has great advantages. Your comments about the use of Advisory Committees seems to me most important and gets somewhat washed out when we read your report. Again, what those people contribute and use as a plan later on is not something you can put down in writing. Chapter 5, "Development Strategies," says a lot in a few words. I realize others have suggested the opposite, in a vein of constructive criticism, but, in your redraft of this, you could have somewhat more emphasis on the distinctive features of your region as compared to other parts of the Nation. I think this would be more helpful to the people using it in your area, as well as in the areas of the various Departments mentioned here. Again, I don't mean a 1 '/2-page summary, but really focusing on what is there that is not highlighted in the present setup. There could be some pinpointing of how your future program departs from the past programs. Some of that will change due to the fact that the plan is 2 years old. If a reader wants to know what his plan means in the way of future direction, as again being somewhat different from the past, a statement along those lines might be helpful. Again, your comment about it being cost-effective and your comments earlier about there being more graphics — perhaps it will come out in a summary report for many of those who will use this later on. Mr. POYTHRESS: The plan does not include a tremendous amount of staff time and a great deal of work on the part of the State coordinators, not the least of whom was Greg. I guess Greg Higgins has as much of a hand in shaping this as anyone. We also subscribe to County Business Patterns and the Survey of Current Business. I think the August figures, the per capita figures as well, are quite different from what we might have had in here. Otherwise, it is very different. I appreciate the comments. Mr. B. BUTLER: Can we request that the comments from the last two people be put on top when it is circulated? Dr. RAUNER: We will now hear from the Upper Great Lakes, if you will. Remarks by Upper Great Lakes Regional Commission Ms. CAPPIO: We were very impressed with the precise nature of the plan, the emphasis on how the individual States fit in with your overall economic development strategy. Another good point about the regional planning that you do versus the importance of local initiatives, that all of the comments and criticisms we have have generally been addressed. Just a note about the evaluation process you have explained: We were concerned about details, and the need for more specific strategy evaluation; but you have explained that you are working on that process. Mr. BUTLER: I amend my motion — make that the last three speakers. 39 Dr. RAUNER: We are close to adjournment. Your patience and physiological endurance are certainly deserving of every praise. I have just a brief point to make. It follows an issue that Larry Houstoun broached with you earlier and comes from the previous meeting of FACRED. That is the question of how do you participate in follow-on and follow-up to this kind of exercise? He wrote to all of you and asked if you had thoughts on the matter to communicate them to him. Two agencies — EPA and the Department of the Army responded. We have copies of those letters here today. Mr. ETHERIDGE: Excuse me— you did not get ours? Dr. RAUNER: I do not have yours here but that is not to say you did not send it. But in any case, we may have three- Ms. BUFFUM: You may have four. Dr. RAUNER: The point being that it is a legitimate concern — I think, serious and honest from the Department's standpoint to do this, to see if we can extend the kinds of things that are happening here. And certainly, from the standpoint of the Commission's, the Federal Cochairmen, the Governors, it would be well to see if there are ways it could be extended. More specifically, the way Dr. Anderson has determined he is going to do this. He is going to HUD and he is going to DOE. You will see in the handouts a letter from Claud to Larry Houstoun, another one from Pat Vaughan in the Pacific Northwest, becoming somewhat more specific. One dimension of that is to become more specific in a region. There could be a sort of a regional version of a FACRED to come at a specific time in a plan update or a plan review. This might pose a problem for you, because you have to worry about your regional counterpart going to a session like this where you may not be in the group. It is a possible problem or it may be no problem at all; I do not know. But in the sense of getting serious about follow-ups to these meetings here in Washington, some of which may occur in the region, we then have to have some concern about how that all gets stitched together and how everybody is kept informed about it. There is no resolution on that, but I know that Larry wants to go on and become much more specific in formulating procedures. Why? Simply because it will feed into and become part of the institutional memories that will be invested in the new legislation. To the extent that this kind of thing is done and is beneficial, then it is showing something about how regional commissions can mount and carry out a coordinating role of this sort, perhaps to have some success stories to point to along the way. Bill? Mr. B. BUTLER: The Federal Cochairman of the Southwest Border Commission has extended an invitation to all of the members of this body to participate in a planning and coordination conference because we are at the earliest stages of developing our plan and want to get you involved in the very earliest part. That is set up for November 13th and 14th, and I just wanted to make you all aware that a letter is going to your Agency. I hope it gets to you. Mr. MANHEIMER: May I get a copy of that? I misplaced my copy. I called over there and, evidently, they were unaware you had invited regional representatives. Mr. B. BUTLER: We have problems between the Department of Commerce and our office. Mr. MANHEIMER: You would not mind sending it to Bernie Manheimer, HUD, and renew your request? Mr. B. BUTLER: The last person from our staff is here with me and is responsible for doing that. Her name is Sharon. 40 Mr. MANHEIMER: Would you just do that? Send it to Bcrnie Manheimer, Washington, DC, HUD. Dr. RAUNER: That is a little example of what we are talking about here and what is an attempt to vivify this following-up. I think we are close to adjournment. Mr. MANHEIMER: I have a request of you. I do not know if the other people would like it, but I cannot keep up with the regional commissions. 1 come over here occasionally and get a map. Is it possible that you could give us a map and descriptions of the latest — Dr. RAUNER: Yes. May I tell you that Fran Pappas, whom all of you know, is valiantly working at a series of distributions of informational packages to all of you. The problem is, I think, we are addressing these to you who come to our FACRED meetings, but we are also addressing them to your bosses and the official FACRED members. They contain things like maps and information on what is going on, useful hints and tips to a FACRED member. This is so we all will be as well informed about each other's activities as possible. One of the items for our subsequent meeting is a little do-it-yourself briefing that we have prepared, where you will read some booklets, look at some maps, be pretty well up to date about commissions, boundaries, the pending commissions, and where all of that stands. The final thing to hand out is what is called a draft paper or working paper that summarizes Larry's initial remarks — that is to say, the results of the task force on new legislation. It has all of the key points in there. It is not privileged in any way. All available in there is to share and to talk about as you will. Barring that, I can only thank you for coming and contributing. I believe that those of us who have been in the program for some years can honestly say that the mood, interest and potential for FACRED has changed by many dimensions, many orders of magnitude. We can show you some transcripts of some meetings in bygone years which were dull and dreary and not very stimulating and we did not go away saying that we have a lot to do on those things. We'd say, "Well, we'll crunch that out and get it off over there— the White House will get it and nobody will ever hear from it again. "That is not going to be our result now, obviously. I will put these copies in separate piles on the table. Everybody will want to take four per capita, but we do not have enough for that, so if you will just go through taking one of each, you can then use your own Xeroxes. I thank you all again and we will be communicating. (Whereupon, at 1 1:57 a.m., the meeting was ajourned.) 41 APPENDIX A WRITTEN STATEMENTS OF EXECUTIVE AGENCIES AND REGIONAL COMMISSIONS 43 DEPARTMENT OF THE ARMY OFFICE OF THE ASSISTANT SECRETARY WASHINGTON, D.C. 20310 1 7 JUL 1978 Dr. Robert Rauner Acting Deputy Office of Regional Economic Coordination' U.S. Department of Commerce Washington, D.C. 20230 Dear Dr. Rauner I note with interest the Commission's frustration with historic funding levels far below that required to implement their original comprehensive economic development plan. With this experience in mind, I can understand why the current plan is very modest and, far from being comprehensive, is limited in scope to essentially relieving unemployment, increasing earnings and improving community services. Even these limited objectives are estimated to require Commission funding at a level 15 times greater than in the past. Is this a reasonable expectation? The report provides guidelines to the Commission for participation in programs and projects proposed at the state and local level. It does not: (1) provide a firm basis for budget requests, (2) give guidance for, or require cost-effectiveness analyses for decisions on investing Federal funds, (3) provide for coordination of other Federal programs in a way to maximize Commission objectives, or (4) give direction for accomplishing the goal of improvement of community services. I believe the plan would be a more useful tool for decision-making if information is added on: the kinds of projects which are most cost effective in attaining employment and earnings objectives; details for Commission and other Federal Agency support required to encourage these projects; and, on how the Commission should move to encourage the kinds of community services required for economic development. Although the Commission has not identified a role for the U.S. Army Corps of Engineers, I believe their program of water resources development can contribute to Commission objectives. I suggest the Commission contact the nearest Corps of Engineers District Office which is located in Charleston, S.C. if they do not have information on the Corps' programs in their region. Sincerely, Donald L. Dillon Deputy for Policy, Planning and Legislation 44 Department of Energy Washington, D.C. 20585 MEMORANDUM FOR: FROM: Dr. Robert Rauner Acting Deputy Office of Regional Economic Coordination «Y~ Phillip S. Hughes Assistant Secretary for Intergovernmental and Institutional Relations SUBJECT: REVIEW OF COASTAL PLAINS REGIONAL DEVELOPMENT PLAN The DOE Regional Representatives Office in Region IV has reviewed the draft of the Coastal Plains Regional Commis- sion' s regional development plan. In addition to the fact that an economic development plan dated September 197 6 covering 1975 - 1976 is quite outdated at this point, it is our opinion that the Commission has not considered energy impacts to their full extent for the reasons stated in the attached review. We will be interested in the comments of the other repre- sentatives to the Federal Advisory Council prior to our meeting in July. Attachment 45 Department of Energy Region IV 1655 Peachtree Street, NE Atlanta, Georgia 30309 May 26, 1978 MEMORANDUM FOR ELIZABETH V. BUFFUM POLICY AND PROGRAM ASSISTANT (IR FROM: SUBJECT o- DONALD E. ALLEN ACTING REGIONAL REPRESENT Uv^ REVIEW OF COASTAL PLAINS REGIONAL} DEVELOPMENT PLAN |/ In response to your request dated May 16, 1978 for review of the Coastal Plains Regional Development Plan, we are submitting for your use the following comments. The Coastal Plains Regional Development Plan portrays the five state geographic area as having relatively high employment levels in labor intensive but low paying industries with resulting low per capita incomes. In general this characterization of the region is valid and can easily be supported by detailed statistics such as those included in this plan. The plan addresses in Sections IV and V the goals, objectives, and developmental strategies for the coastal plains. Our review of these expressed strategies for meeting the outlined economic goals indicates the role of energy supply and development has been largely neglected in the plan. The high correlation between energy cost and supply with the economic develogfeerQEJ of a region is a well established economic relationship^ m o < The full consideration of the economic consequences °f -^ 5 energy supply should result in a well developed and ^ __ effective strategy for economic development of the regies . ^ The current plan (page 72) lists energy as a relatively© lower priority program behind agriculture, forestry, °° tourism, vocational education, etc. After reviewing the 46 plan in full it is our evaluation that energy costs with resulting impacts on economic growth are not recognized at the proper level or priority. Due to the Commission's identification of Industrial and Commercial Development as first priority, and given the direct relationship between energy costs and supply with this growth, the identification of energy supply strategies as second priority could be justified. Energy costs have increased rapidly in the last five years as a cost of doing business. A local cement company has recently submitted data to this office that indicates energy costs represent 44% of total product costs. If it is the Commission's intent to foster industrial development in the Coastal Plains then energy supplies and costs will largely determine those business decisions to invest in new capital equipment and expansion facilities. The energy cost and supply advantage of the Coastal Plains relative to other more industrially developed areas will largely determine the willingness of companies to relocate in the Coastal Plains. This is particularly true for the energy intensive industries, such as the primary metals industry, that the plan states are needed due to higher hourly pay (page 38). Long term and well established economic trends in the Coastal Plains States have resulted in low paying labor intensive industries such as textiles, apparel manufacturing and furniture (page 37). It is not clear to us that improved public education, as the plan suggests, would clearly reverse these long term industrial development trends. Even as education in the Southeast and the Coastal Plains has improved it is not clear that it has gained any relative advantage to other areas of the country which have also continued to improve. In our evaluation a reversal from low paying labor intensive industrial development to higher paying industrial development can be tied much more closely to relative energy cost advantages than to educational advantages. This concept seems to be neglected entirely in this draft Economic Development Plan (with the exception of an occasional reference to energy costs). The Coastal Plains States offer many energy resource advantages over other regions of the country that should, if developed, lead to enhanced industrial and commercial development. The area currently has extensive water resources which give it a clear advantage over other areas of the country in the siting of heavy water using electric 47 power generating facilities. The Coastal Plains States offer many relatively remote energy facility sites which are not currently encumbered by the "non-attainment area" environmental standards so prevalent in other areas of the country. These sites are suitable for both coal fired and nuclear power plant siting. The Coastal Plains States, particularly in the southern most areas such as Florida, offer the potential for greatly reduced plant space heating costs. With a rapid price rise in natural gas expected, the costs of industrial plant space heating will increase tremendously. A reduced heating requirement will result in a significant competitive product cost advantage that should attract industrial development in the region. There are many other energy resources in the Coastal Plains States that once developed will enhance economic growth in the region. The Southeast Georgia Embayment (OCS Sale #43 - Department of the Interior) offers high potential for offshore oil and gas exploration and develop- ment. Shale Oil exists in the Coastal Plains but little development has taken place to date. The Institute of Gas Technology estimates that the North Carolina Coastal Plains may have enough economically recoverable oil locked in shale deposits to support a synfuels industry capable of producing up to 150,000 barrels a day of liquid fuel. The Economic Development Administration has recognized the critical relationship between energy supply and economic/ industrial growth. The Atlanta Regional Office of EDA, working in conjunction with this regional office, has recently funded two feasibility studies on increasing energy supply for industrial growth. In Georgia EDA has funded a study on the burning of carpet waste to fire process boilers in the carpet industry. The wastes can be burned cheaper than natural gas and are a more reliable fuel than interruptible natural gas supplies. In coastal Mississippi the EDA is funding efforts for enhanced gas recovery from marginal gas fields in order to attract industry and develop an industrial park nearby. Similar results in the Coastal Plains could be achieved by developing industrial sites near major power plants to achieve a co-generation of electricity and useful industrial process steam. Our review of the proposed Economic Development Plan indicates the Coastal Plains Regional Commission has not as yet considered energy impacts to their full extent. The above comments will hopefully prove valuable in the on-going development of the plan. Please contact Bill Rankin of my staff (FTS 257-4464) if we can provide additional assistance. 48 THE UNDER SECRETARY OF HEALTH, EDUCATION. AND WELFARE WASHINGTON, D.C. 20201 MEMORANDUM July 31, 1978 TO Robert Rauner Acting Deputy, Office of Economic Coordination FROM Acting Deputy Under Secretary for Intergovernmental Affairs SUBJECT: Review of the Coastal Plains Regional Development Plan In response to your request, we have reviewed the Coastal Plains Regional Commission's Economic Development Plan. In general, the plan provides a good description of economic conditions in the region. However, there are some areas that warrant further attention. Economic Conditions The focus on industrial development to close the income gap between the region and the rest of the nation appears very appropriate given the region's stated economic conditions. However, there is insufficient details provided for attaining the recommended goals and objectives For example, the plan gives first priority to high technology industry and private capital investment, and second priority to public investment. Yet the plan does not specify what type of projects will be funded to stimulate private investment and how public investment will be received. The plan estimates that $737 million in public investment is needed over the next ten years to achieve the region's development goals, but there is no listing of any projects or identification of funding sources. We suggest that further details would provide a more meaningful document. 49 Robert Rauner Vocational Education The goal of industrial development makes vocational skills training crucial. Therefore, the high priority given vocational education is quite appropriate for the region. But, while giving priority to vocational education, there is not presented even a general strategy for vocational education development. Once again, more specific details are suggested to make the plan a more meaningful planning document. Health Health care is almost totally neglected in the plan. To this Department, adequate health services and facilities are an important element in community infrastructure needed to attract and promote industrial development. Priorities listed on pages 72-73 of the plan should list health under "infrastructure" and not relegate "General Health and Education" to priority 10 our of 11 items. Thomas Higg{pP 50 ' Mi \ % DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT S WASHINGTON, D.C. 20410 J UN i 5 1978 OFFICE OF THE ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND DEVELOPMENT IN REPLY REFER TO: Dr. Robert Rauner Acting Deputy Office of Regional Economic Coordination Department of Commerce Room 2092 Washington, D.C. 20230 Dear Dr. Rauner: Assistant Secretary Embry has asked me to forward the following Depart- mental comments on the Coastal Plains Regional Commission's Economic Development Plan of September, 1976. The Department is pleased with the community development concerns interrelated with the goals stated for economic development. The recognition of the need for community facilities to make development projects viable and the concern for residence preference in assessing work force needs augurs well for the coordination of community develop- ment with economic development. Unfortunately, the discussion of Strategy for Project Location does not, in weighing criteria for priority of project assignment, consider the state of and potential for community development of a locality as a noteworthy criterion, even though, on page 74, community improvement projects are recognized as valuable. We would encourage further linkage of community and economic development in two ways. Most important, close relationship should be established between (1) local community development and housing assistance plans, any existing housing opportunity plans of the areawide organizations, 701 sponsored local, State, and areawide plans (particularly the land use and housing elements), and any other pertinent geographic and modal plans, and (2) the Regional Commission Plan. This relationship will be particularly important in areas where State and regional strategies are being enunciated in response to the President's recent National Urban Policy initiatives. Also, as previously mentioned, community develop- ment criteria should be established for use in determining where projects should be placed. 51 We are aware of at least two areas where the impact of Defense realignment will be heavy and widespread within the Region. Any revision of the plan should reflect the potential large scale growth of communities near the Fort Stewart-Hunter Army Airfield, in Liberty County, Georgia which has been undergoing, during the past several years, an increase in military and civilian positions from a little over 6000 to more than 20,000. Also the proposed Trident Missile Submarine Support Base in Camden County, Georgia will bring approximately 5000 more people to the Southeast Georgia-Northeast Florida area by mid-1979. We are also aware of an activity within the Commission's geographical area that might be mentioned in the plan as a useful prototype for other areawide organizations. It is the energy conservation planning being carried out in the Southeast Georgia (formerly Slash Pine) APDC under the auspices of a HUD innovative grant to Brantley County. It is my hope that Mr. Manheimer (755-6234), of my office, will be able to attend the July 28 meeting and participate in the discussion of issues raised by the plan. Sincerely, g^S SeTvaggi i rector 52 U.S. DEPA'RTMFNT OF LABOR Office of the Assistant Secretary for Employment and Training Washincton. d.c. 20210 AUG 1 1978 MEMORANDUM FOR FROM SUBJECT DR. ROBERT RAUNER Acting Deputy- Office of Regional Economic Coordination ERNEST G. GREEN Assistant Secretary for Employment and Training Comments on Coastal Plains Regional Development Plan — Meeting of Federal Advisory Council on Regional Economic Development (FACRED) on August 18 , 1978 Thank you for the opportunity to review the subject plan and to participate in the deliberations of the FACRED. A major point made in the Commission's report relates to its lack of statutory authority and to the limited funds made available for investment projects. While I would not necessarily endorse a major expansion of the Commission's charter and funding capabilities, I believe its activities could be made more effective by directing more concern to its coordinating role, particularly ways in which Federal resources should be combined in order to optimize their impact on promoting regional growth. This is not to deni- grate the importance of investment projects which the Commission has sponsored in the past, but I think it's an appropriate time to evaluate the existing institutional framework and how diverse program activities — e.g., housing, industry development, training, education, trans- portation, health care, income maintenance—might be better coordinated and strengthened. I also agree with the Commission on the need to develop better and more up-to-date data and analysis. However, I would like to see a better balance struck between the demand and supply sides of the developmental equation, particularly the demographic characteristics and employment needs of the resident population. Again, this is an area which should be coordinated more closely with our CETA 53 programs to insure that training is consonant with industry manpower requirements. In this regard, the Employment and Training Administration stands ready to work with the FACRED and its developmental commissions in whatever way may be feasible. 54 OFFICE OF THE SECRETARY OF TRANSPORTATION WASHINGTON, D.C. 20590 August 7, 1978 SSISTANT SECRETARY Dr. Robert Rauner Acting Deputy, Office of Regional Economic Coordination Main Commerce Building, Room 2092 Washington D.C. 20230 Dear Dr. Rauner: We have reviewed the draft Coastal Plains Regional Commission economic development plan of September 1976. I commend the Commission for the realistic approach to planning they have adopted. Federal assistance funding is limited. As the Commission has learned, a significant por- tion of transportation program funds are allocated on a formula basis to the States, and there is little discretionary money available for Federal targeting to specific regions. Funds available for direct expenditure by the Commission are also limited. While the plan should be an able document for guiding deci- sions regarding the investment of Commission funds, we suggest that it also be considered a guide for investment of State and local funds in the region. We note that the annual State Investment Plans include only projects which the States consider candidates for Commission finan- cial support. If the State Investment Plans are broadened to include all State and local development projects, the Commission may be in a better position to evaluate where investment of Commission funds may provide a needed stimulus or fill a need not being addressed at the other governmental levels. This may be particularly helpful as each State has established Statewide development goals which collectively do not encompass all goals established by the Commission. Sincerely, W I Terrence Li Bracy Assistant Secretary Xor Governmental Affairs 55 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON. DC. 20460 July 26, 1978 Dr. Robert Rauner, Acting Deputy Office of Regional Economic Coordination Room 2092 U.S. Department of Commerce Washington, D.C. 20230 Dear Dr. Rauner: Attached are EPA comments on the Coastal Plains Regional Development Plan. Sincerely, Yc&&4 Roy N. Gamse Deputy Assistant Administrator for Planning & Evaluation Attachment 56 July 25, 1978 EPA COMMENTS ON THE REGIONAL ECONOMIC DEVELOPMENT PLAN OF THE COASTAL PLAINS REGIONAL COMMISSION (dated September 1976) The Plan is realistic in recognizing that grandiose economic development scenarios too often founder on the rocks of insufficient funding, as happened with earlier efforts undertaken by the Coastal Plains Commission. Thus the Commission attempts to develop an approach that is not critically dependent on ample funding that might not be realized. This realism is commendable. At the same time, the problems encountered in this approach leave the reader wondering whether there really has been an attempt to develop a cohesive, rational plan for improving the quality of life in the region or whether the decision has been made simply to "play it by ear" and do what seems "best" on an ad hoc basis. There does not seem to be any central thrust to the development effort that is required to achieve the stated objectives. Some specific comments: o Environmental problems are given virtually no consideration in the Plan. Indeed, even the mention of environmental concerns is perfuntory. The low priority given to environmental matters in the discussion suggests that this Plan to improve the quality of life of the Region's citizens might not have addressed all the important considerations that affect the quality of life. The Plan tells us nothing about the environmental problems — whether they will get worse, or better, depending on some overt action by the Region. o In the listing of issues on p. 67, one issue not cited is whether the nature of economic growth contemplated is constrained, and to what extent, by environmental problems or regulatory restrictions. If there is an issue there, what actions are contemplated to make compatible the goals of economic growth and environmental protection? o It is acknowledged that the Plan developed some 8 years ago fell far short of its goals and intended impact, due essentially to insufficient funding from all expected sources. Nevertheless, it appears that since 1970 the Region has shown "remarkable economic progress." The Region grew substantially faster than the nation for 1970-1974 and each of the segments of the region also grew at a faster rate. In population, the net loss of migrants was reversed dramatically. Again, the phenomenon was relatively uniform in that each segment in the Region realized a net gain of migrants. Despite the increase in population, the "percentage of population employed" in the Region, as well as in all its parts, grew at a faster rate than the national average. Per capital income has been growing in the Region at a rate faster than that of the nation, despite the apparent disappointment of the planners in closing the per capital gap. 57 Despite the inadequate funding for implementing the Plan of the past 8 years, there clearly has been a vibrant dynamism at work. But the current Plan does not attempt to analyze this. The growth phenomenon is simply noted in various statistics. The economic and other forces underlying this growth need to be examined, and amplified in the new Plan. It is not clear that the growth phenomenon is understood. Perhaps one of the first projects should be to study the dynamics of the recent growth: What forces were at work? Why? How can they be amplified? And directed to other needs? Etc. 58 U.S. Small Business Administration Washington, D.C. 20416 OFFICE OF THE ADMINISTRATOR July Ik, 1978 Dr. Robert Rauner Acting Deputy, Office of Regional Economic Coordination Main Commerce Building, Room 2092 Washington, D.C. 20230 Dear Dr. Rauner: We have reviewed the Coastal Plains Regional Commission's Economic Development Plan (draft of September, 1976), and our comments follow . This Plan does a good job of setting forth and justifying the Region's goals, objectives, and strategies. It is also a good textbook on the regional planning process. Unfortunately, the Plan falls far short on specifics. The reader is given no feel of the specific projects - or leading examples of the projects - on which the Commission has spent $Ul.9 million of the $^7.1 million of Federal funds it has received between 1967 and 1976. The reader is left in the dark as to how any particular projects have contributed or will contribute toward the goals announced in the Plan. The Commission's reticence to discuss individual projects seems strange in view of its general statements that its projects thus far have benefited the Region, that investments of Federal funds, other public funds, and private funds have been woefully inadequate to achieve the Regional objectives originally planned, and that it will need an additional $737.2 million of public funds to attain even the Region's scaled-down objectives for the decade 1975-1985. It seems probable that Congress will want to see more particulars about at least some of these projects, including benefits and costs, before it approves additional funds sixteen times the amount provided through FY 1975. More information is also needed as to how the Commission plans to attract to the Region the high-technology, high-wage industries which it states are essential to raising the average per capita incomes of the Region. For example, the Plan's development strategy deals only by inference with initial financial incentives, such as grants or loans to high-wage firms through Regional or State development 59 banks or similar financial institutions . Nor is there any evidence that the Commission has researched the question of the extent to which state and local tax incentives might be available to new companies. Further, the Commission will soon likely have to form policy on whether it would (other things equal) rather attract new firms or existing firms, outside (including foreign) firms or Regional firms, a few big companies or many small companies. Each will present its own problems. In view of its admitted need of better acquisition and analysis of Regional economic data, the Commission should consider extending much higher than bottom program priority to Regional research. We appreciate the opportunity to review the Coastal Plains Regional Plan. The Small Business Administration will be represented at the meeting of the Advisory Council on August 18. Sincerely, Harold A. Theiste Acting Associate Administrator for Operations 60 THE APPALACHIAN REGIONAL COMMISSION 1666 CONNECTICUT AVENUE WASHINGTON. D.C. 20235 Date: July 17, 1978 Subject: Review of the Coastal Plains Regional Plan Thru: James H. Pickford To: Salim Kublawi The Coastal Plains Regional Plan is the result of a well thought-out and conceived planning and development process. It is pragmatic and multi-dimensional in that each level of the region (i.e., states, substate districts, and the multi-state region) are used effectively as the basis for analyzing the needs and conditions of the region as well as for making investment decisions and setting priorities. One aspect of the process that is unique is the consideration and use of alternatives. Alternative development strategies and priority alternatives were considered relative to problems, needs, goals, and objectives. Therefore, I think the CPRC has initiated a very workable planning process that will yield tangible results throughout its 10- year cycle. It would also be interesting to see the annual programming components of this plan as they unfold. One point that was made in the plan needs clarification. The plan stated that ARC is not required by law to do a regional plan. Quite to the contrary, we are required to do a regional plan based on Section 225 of the 1975 amendments to the Appalachian Act. at^ CLIFTON M. LAMBERT Division of Planning and Evaluation 61 FEDERAL COCHAIRMAN PACIFIC NORTHWEST REGIONAL COMMISSION Suite 122 Hall of the States 444 North Capitol Street, N.W. Washington, D.C. 20001 July 13, 1978 Laurence 0. Houstoun Jr. Acting Executive Secretary Federal Advisory Council on Regional Economic Development U. S. Department of Commerce Washington, D.C. 20230 Dear Mr. Houstoun: I and my staff have reviewed the Coastal Plains Regional Development Plan. We believe the up-dated plan is an excellent document and that the goals and objectives, as outlined and adopted by the Commission, will contribute to the growth and development of the Region. We plan to have a representatives from my office at the FACRED meeting on August 18, 1978 Best regards. Sincerely, cc: Dr. Robert Rauner, Acting Deputy v Office of Regional Economic Coordination 62 OFFICE OF THE FEDERAL COCHAIRMAN Southwest Border Regional Commission May 30, 1978 Mr. Robert M. Rauner Acting Deputy Office of Regional Economic Coordination Office of the Secretary U.S. Department of Commerce Washington, D.C. 20230 Dear Mr . Rauner : In reviewing the Economic Development Plan of the Coastal Plains Regional Commission, we find the emphasis placed on balanced development particularly interesting. Great care seems to have been taken to consider the impact of overall economic development on the region's population. For example, the issue of possible displacement due to a particular policy, program or project was raised. Similarly, consideration was given to the relationship between development and environmental concerns . In addition, we can certainly appreciate the benefit of devising a plan with sufficient flexibility to accommodate periodic updating. Other factors en- hancing the plan's utility are the comparison of the region to the nation, the recognition of private capital's role, the provision of a rationale for stated priorities, and attention to the need for an evaluative mechanism. As a means of strengthening the plan, greater indication of the relationship with other planning efforts at the local, area-wide, state and federal levels could be given. It would also be helpful to clarify the stated goals since there may be some difficulty in distinguishing between goals one and three. In the same vein, greater specificity in describing the strategies designed to achieve the desired objectives would be of assistance in more fully under- standing the implementation process. If the aim is to improve income, edu- cational opportunities, housing and health care, what specific programs or projects can be instituted to redress these problem areas? In the develop- ment of strategies, it may also be advisable to give greater attention to other potential funding sources at the local, state, and federal levels. This approach could also serve to reinforce coordinative efforts. As a broad framework, this plan would seem to offer assistance in structuring an approach to guide decision makers in addressing the complex issues inherent in regional economic development . 63 May 30, 1978 We appreciate the opportunity provided us for review and comment, and hope that you find our constructive remarks helpful. Sincerely, Cristobal P. Aldrete Federal Co-Chairman CPA/lb 64 APPENDIX B WRITTEN STATEMENTS OF DEPARTMENT OF COMMERCE UNITS 65 A REVIEW OF THE COASTAL PLAINS REGIONAL COMMISSION ECONOMIC DEVELOPMENT PLAN, SEPTEMBER 1976 Commissioned by the Office of Regional Economic Coordination, U.S. Department of Commerce By David K. Hartley Governmental Affairs Consultant 2310 19th Street, N.W. Washington, D.C. 20009 June 197 8 66 This review has been commissioned by the Office of Regional Economic Coordination, an entity of the Office of the U.S. Secretary of Commerce, as part of the Secretary's review of Commission plans (CFR, Title 13, Chapter V, Part 530). The consultant is "to prepare a technical review" of the Plan document, performing, however, "as an independent contractor and not as agent of the U.S. Government." Presumably, this review will be made a part of the record at a forthcoming meeting of the Federal Advisory Council on Regional Economic Development. The recommendations of the Federal Advisory Council will be reflected in a revision of the Plan before it is submitted formally to the Secretary of Commerce for approval and for transmittal to the President and ultimately to the Congress . It must be emphasized at the outset that the review is meant to be helpful to the continuing review and update process that has been established by the Coastal Plains Regional Commission. Preparing a Regional Plan is immensely complicated, and the Commission has done a commendable job in putting together a single document that harmonizes requirements from five sovereign states and various Federal agencies -- requirements that often conflict with each other. Regional development planning is not a highly developed science in the United States, and the Commission has begun the technical task of estimating the needs of the region in a format that will allow some gross comparison with the needs of other large regions of the country, the goal being reduction of economic disparities between regions. It must also be emphasized that this review is constrained by access only to the Plan document itself, which admittedly is only one product of a good deal of effort and considerable background material. Planning process is as important as the written document itself, but this review is based only on the finished product. After initially reading the Plan document, the reviewer contacted a number of technical experts (listed in Appendix 2) for certain supplemental information that was felt needed to make this review more helpful. A summary of this review would be that the Plan document be approved by the Secretary of Commerce, but that the Commission might wish to pay more attention to implementation 67 through other organizations in the region that have the power and money to effect regional change — organizations not specified in the document at hand. Plan Document Review The Commerce guidelines for Plan preparation (Part 530) list 10 elements which Commission Plans "when fully developed will ordinarily include." Their inclusion in the Plan document at hand, in the judgment of this reviewer, is as follows : (a) Review of prior studies — included. (b) Framework for analysis — included. Cc) Review of the regional economy — included. (d) Review of conditions inhibiting growth — included. (e) Review of major plans and pending decisions — not included. (f) Establishment of regional goals — included. (g) Determination of a development strategy — included, (h) Review of existing program adequacy — included. (i) Criteria for project identification — not included. C j ) Consideration of other planning in the region — not included. In addition to the 10 plan elements, the guidelines specify four factors the Secretary of Commerce will consider in reviewing the Commission's regional clans prior to making recommendations to the President. These four "review standards are: (a) Consistency with national economic trends; (b) Interregional consistency; (c) Transf errence of employment and (d) National benefits. All these "review standards," in the opinion of this reviewer, have been mentioned in the Plan document at hand, although in most cases only by inference. Thus it would appear that most of the required elements are included, but this review would be grossly inade- quate if the qualitative aspects were not evaluated. Planning 68 is often honored in the breach; plans are often more collections of projects rather than orderly guides to resource allocation. State Government Participation Planning must be somewhat incremental, because the added investments needed to carry out the development strategy will be programmed through the policy and budgetary systems of existing Federal, state, and local units of general government -- "implementation areas." This observation about "implementation" is made with full recognition that fiscal and organizational structure varies from state to state -- there is considerable variation even between the five states in the Coastal Plains economic region. It is indeed a formidable task to design a feasible strategy with such diversity. But the planning exercise must pursue parallel but intersecting paths — "bottom up" from local to region to nation, and "top down" from nation to region to local. The linchpin for the economic development strategy for the region must be the five state governments, their economic strategies, and their fiscal and governmental programs as they relate to economic development. This fact is recognized in the Plan. Four of the five states have established a continuing economic planning process which is assisted by EDA grants under Section 302 (a) of the Public Works and Economic Development Act Amendments of 1974 (P.L. 93-423) -- Virginia elected not to apply initially for 302(a) funds but has established an economic planning program on its own. While the 302-assisted economic resource planning was instituted after the present Plan document was assembled, the planning can be coordinated with the State Investment Plan grants that the Commission has made to each of the five states for a number of years. Economic development planners in the Coastal Plains region are fortunate that primary responsibility for conduct of this state development planning has been assigned to the Governor's central planning and budget staff in three of the states (North Carolina, South Carolina, and Georgia), and to agencies with access to the Governor's coordinating powers in the other two (Virginia and Florida) . Some of the state efforts are gaining national attention, such as North Carolina's "Balanced Growth Policy" with its "regional balance target" dimension. 69 This type of policy planning in its economic dimen- sions might be termed "state economic resource planning" which is being defined as "policy planning and coordination that has as its focus the state's decisionmaking process and long-range policy relative to the economy of the state and its citizens." It is closely related to implementation through budgeting. Policy planning synthesizes planning for the wise use of economic, human, and natural resources. Economic resource planning is thus a necessary component of state policy planning, coordination and budgeting, and (through recent executive reorganizations in most of the Coastal Plains state governments) is conducted in close association with planning for Human Resources (health, education, welfare, employment training) and for Natural Resources (environmental protection, parks, recreation, agriculture) . Both Human Resources and Natural Resources are important in economic development. The newer forms of state economic resource planning are quite different from the more traditional industrial promotion activities on which states have heretofore concentrated. The Coastal Plains Regional Commission seems to have laid the groundwork through the Plan document for capturing the new state planning and budgeting activities and mobilizing them for regional development. Another observation about state government partici- pation in Commission planning relates to local governments. Local governments (cities, counties, special districts) are creatures of state power both financially and legally. Most states are increasing their financial and technical assistance to local government to help them do their job more efficiently. In this sense, then, local government can be recognized as an explicit instrument of state economic development, but this opportunity seems not to be recognized in the Plan document at hand, although there is some discussion of the role of Development Districts (p. 79) which are basically associations of local governments. One further observation needs to be made about state government participation in both Plan formulation and Plan implementation. The document at hand has no mention of the important role of the state legislature. Governors, however, share power with legislatures and state government is not a monolithic institution. Legislatures can be said to exercise three primary responsibilities in economic development: they enact laws and thus implicitly set the state growth strategy; they charter 70 state institutions in the executive branch and exercise over- sight over specific activities of state government through committee work; and they appropriate funds for state government activities. While there inevitably are tensions between the legis- lature and the Governor, a good deal of cooperation is necessary for the successful formulation of a sound long-term state development strategy — and for some commitment to appropria- tions and legislation that will be necessary through legislative action if the development strategy is to be implemented. It might be observed that a condition for trans- forming the Coastal Plains Regional Commission into a truly equal State-Federal partnership will be some sort of explicit participation by the five state legislatures. Another way of putting this statement is that the Coastal Plains Regional Commission should be recognized and used as an explicit instrument for proper economic development by the State Governments of the five states, and that this implies some legislative involvement. Evidence of Public Preferences in Plan Formulation The Plan's Development Strategy and Implementation sections do seem to relate to the analysis of problems. There is, however, little evidence of the important iteration and feedback analysis that should occur between suc- cessive versions of the Plan on the one hand, and review based on current and projected expenditure patterns and on expec- tations of implementing bodies on the other hand. The framers of the Plan might have missed an opportunity here, because this version is the third such Plan adopted by the Commission since the Commission was established in 1967. What was learned from the earlier Plans and why was the strategy changed, if it was? To what extent were the earlier Plans followed in actual Commission expenditures and activities? The Commission has been in existence for over a decade but there is not much in the current Plan about whether past Plans provided a useful guide, and if not, why not. It should be added that the Coastal Plains Regional Commission apparently gives a key role to "Advisory Committees" "four advisory committees in industrial development, agricul- ture and forestry, marine resources, and environmental affairs to help plan its programs in these areas and to focus on 71 potential projects of regionwide significance" (pp. 79-80) , but the extent to which the committees were involved in Plan formu- lation is not clear, nor whether their participation is a factor in legitimization of the Plan by institutions that will be charged with its implementation. There is a growing awareness nationally that one of the most important indications of public preferences is the budget and legislative decisions that are made by the public's elected representatives — city councils, mayors, county commissioners, state legislators, Governors, Congresspersons and Senators, and the President. In their review and update process, the framers of the Coastal Plains Plan might well consider assessing the adequacy of the budgets and program structures as indicators of the public preferences in the region. At the Federal level, the voting record of the area's Congresspersons and Senators, as well as the record of Federal expenditures as they relate to the region, is one evidence of the public's preference. It may be hypothesized that the area's Congressmen are quite conscious of the economic base of the region and attempt to look out for its interests in national economic policy, but the Commission's plan document gives little evidence of their interpretation of the preferences of the public, either through interviews or through their voting records. Leverage of Federal, State, and Local Actions Planning in the United States operates in a frag- mented institutional structure that arises both from its inter- governmental federal character and from the mixed economy of public and private investments. A realistic way to approach plan development is to analyze the current expenditure patterns of the various actors in the economic development of a particu- lar region, and then estimate the additional quantity and quality of investment that will be needed in order to raise the economic performance to desired levels. This apparently was not done by the framers of the Coastal Plains Regional Plan, which does not specify how Federal agency, state agency, and local government funding and policy decisions are to be influenced. There is, also, little discussion of the fiscal pressure on state and local budgets and the increasing reliance on Federal transfers to relieve this local fiscal pressure. Nor is there a discussion of the leverage that can be used by carefully placed Federal investments so as to influence new investments by state, local, and private sectors. 72 One of the key roles of the Regional Commission is to provide leverage for action by other institutions. For this reason, the Federal Cochairman was given a policy-level position within the Department of Commerce (Level IV) . In addition, the Secretary of Commerce is the overall manager of the Title V regional development enterprise (from the Federal side) , and the Deputy Undersecretary for Regional Operations and its Office of Regional Economic Coordination have specific manage- ment responsibilities. These high-level officials are to be advocates for the region and its economic development within the Federal establishment. There is, however, no mention at all of galvanizing these officials to their proper role as advocates for the Coastal Plains region within the national economy, nor are these officials armed with sufficient data to carry out their responsibilities in specific budget and program terms so that they can go to their counterparts, both within the Department of Commerce and other Federal agencies, to do something about the region's economic problems. A recent study groups Federal economic policies into six specific categories: nacroeconomic policies; Federal purchases, grants and income transfers; influences on the labor market; transportation, communication, and commerce; capital; and natural resources, including energy. An analysis of these Federal influences — through budgets, regulatory decisions and legislation — would show a pervasive Federal influence that can be sorted out and made more rational so far as impact on the Coastal Plains regional economy is concerned. There are a number of ways that subnational institu- tions like Regional Commissions can influence national policy using such techniques as economic modeling, tracking all Federal assistance coming into the region, coordinated state growth policies, joint Federal-state planning, and economic impact statements. A cataloging of these opportunities for influencing Federal policy would be very helpful to the regional economic strategy for the Coastal Plains region. The same statements can be made about influencing actions and expenditures of state government through the Executive powers of the Governors, who are full members of the Coastal Plains Regional Commission. State funds should be mobilized for regional development just as Federal funds are. Implementation Through Intergovernmental Finance The Plan document does not seem to have much direct relationship to likely appropriations levels, since it is not 73 based upon a calculation of existing appropriations and the incremental amounts that will be needed to carry out the strategy and raise the income levels and preserve the quality of life of the region. The Plan has a rough calculation that $737 million will be needed for the eight-year period beginning 1977 to achieve a "50-50 ratio between those employed in low wage industries and those employed in high wage industries" (pp. xiii, 62, 81) — 169,000 new jobs at $4,362 expenditure per job by the Coastal Plains Commission itself. This estimate of $737 million may or may not be realistic as to reasonable expectations in Congressional appro- priations, but the Commission also might wish to calculate the part of the $737 million that could come through better pro- gramming — or indeed more expenditures — by general-purpose units of government. This expenditues comes from five distinct but interrelated sources: 1. Direct Federal investments and expenditures. 2. Federal assistance to state and local governments. 3. Direct investments by state governments. 4. State assistance to local governments. 5. Direct investment by local governments including special and school districts. The interaction between Federal, state, and local expenditures — the intergovernmental fiscal transfers by which local actions are influenced so as to carry out national and statewide purposes — is an important tool of regional commis- sions. Regional Programming Along this line, the notion of "regional programming" is emerging. The basic notion is that multistate regional commissions and substate regional councils generally have not been granted taxing or service-delivery powers of their own by either the states or by the Federal government. It follows that a major purpose of these regional organizations is devising strategies for the proper growth of their regions, and then attempting to impact the budgets and spending of the general- purpose units of Federal, state, and local government — the 74 units with the power and money to implement the growth strate- gies. The objective for the Coastal Plains Regional Commission might be to include as a dimension of their budgeting a schedule of allocations that will carry out the Commission's regional strategy, and thus improve overall regional conditions. "Regional Programming," then, is the explicit linking of regional planning for the Coastal Plains region to the budgeting and funding processes of all units and levels of government that have responsibility for implementing change in the region — local (municipal, county, special district), state, and Federal. Implementation Through Substate Districts It is fortunate that the Coastal Plains region is entirely organized into substate development districts in contrast to other parts of the country, and this fact undoubtedly is due in no small part to Commission support. Certainly the Coastal Plains Plan document recognizes the importance of development districts as building blocks and implementing conduits . The Region is fortunate, also, in that nearly all the 49 districts have been designated Economic Development Districts (EDDs) eligible for special assistance from the Economic Development Administration; furthermore, all the substate districts have been designated Areawide Clearinghouses for review of Federal-aid applications under OMB Circular A-95 -- a condition not duplicated in other parts of the country. So, institutionally, the Coastal Plains region appears well- organized in terms of intergovernmental coordination necessary for sustained economic development. Using these institutions fully for effective develop- ment, however, depends on a commitment from the five state governments to bring the districts into state decisionmaking. The Coastal Plains Plan document does not evaluate or compare the state commitments. Such an assessment would be helpful in the Plan's implementation section. Implementation Through Project Selection The Plan contains an excellent narrative discussion Cpp. 65-77) of factors involved in developing criteria for selecting projects that would implement the Plan -- the so- called "Development Strategy." There are, however, no specific 75 criteria for weighting projects from among competing applica- tions. This is curious, since the Commission had been in exis- tence for nearly a decade when the current edition of the Plan was being prepared. One could assume that sufficient exper- ience would have been gained in the political and economic tradeoffs associated with project selection, and that specific arithmetic criteria would have been officially adopted by the Commission and then applied uniformly. Some of the other Commission established at the same time in 1966-7 have such criteria included in Plan documents. Without such specific criteria, Plan implementation can become a hit-and-miss proposition, the economic impact of which cannot reasonably be predicted in advance. Coordination With Other Interstate Organizations The actual economic development strategy of the Coastal Plains region can be said to be a composite of the budgets of the Federal government, the five states, and their substate minor civil divisions (including regional councils of government) . Any regional plan would have to encompass and describe the activities of these bodies, which are in fact the planning bodies for the region. In addition, though, there have been a number of institutions created for multistate cooperation in the South. The five Coastal Plains states (along with the other eight constituting the Southern Governors' Conference) in 1972 created the Southern Growth Policies Board "for mutual improvement of each State in the region by cooperative planning for development, conservation, and efficient utilization of human and natural resources..." An interstate agreement, ratified by the legis- latures, formalizes the organization. The Board is composed of five representatives from each member State -- the Governor, two members of the legislature, and two private citizens ap- pointed by the Governor. An executive director heads a secre- tariat. While project funding comes from varied private and public sources, sustaining financial support is provided by the member states in annual assessments based on a formula that includes population and per capita income factors. All five states are members of the Southern Governors' Conference and Southern Council of State Governments which hold annual meetings and pass policy resolutions on Southern projects. A recent compilation indicates that five Coastal 76 Plains states belong to one or more of 11 commissions established under interstate regional compacts in such areas as water, education, oil conservation, fisheries, energy, tax administra- tion, and nuclear activity. The Coastal Plains region is serviced by two Federal Regional Councils — Virginia by Region II (Philadelphia) , and the other four by Region IV (Atlanta) . The FRCs are composed of the regional directors of the major Federal agencies that provide technical and financial assistance to state and local governments, and a good deal of their activity is in the types of intergovernmental and developmental problems about which the five states and the Coastal Plains Regional Commission are concerned . Another major subnational institution that is con- cerned with regional growth is the Federal Reserve District Bank. The Coastal Plains region is served by branches of the Fifth and Sixth Districts in Richmond, Charlotte, Atlanta, and Jacksonville. The Banks exercise some influence over the flow of money and credit in the region. Each of these multistate organizations has ongoing plans and programs that impact directly on the relative economic prosperity of the Coastal Plains region, and the Coastal Plains Regional Commission might well want to consider taking a lead position in coordinating their activities as instruments for implementation of the Regional Plan. Urban Economic Development The Coastal Plains region, when designated in 1966, was primarily nonurban and this condition remains. Recent growth in some of the larger towns, however, has increased the urban component, and the boundary expansion brought in parts of the Atlanta and Richmond metropolitan areas, as well as all of the Jacksonville, Newport News/Hampton and Norfolk/Virginia Beach/Portsmouth Standard Metropolitan Statistical Areas CSMSAs) . The region's urban areas are beneficiaries of special Federal and state assistance. Four central cities (Atlanta, Columbia, Norfolk and Portsmouth) receive 302(a) assistance for urban economic development planning from EDA, and a number of cities in the region have received Community Development Block Grants and Uroan Development Action Grants ( UDAG) grants from HUD, as well as Comprehensive Employment Training Act (CETA) assis- tance from the U.S. Department of Labor. Several of the 77 substate regional planning councils that have been designated Economic Development Districts (EDDs) by EDA contain fairly substantial cities. These Federal programs and their counterpart State Urban Strategy programs might well become the nucleus of a Coastal Plains Regional Commission strategy for encouraging urban economic development. The Commission participated in the White House Conference on Balanced National Growth and Economic Development in January 1978, and the President's Urban Policy of March 197 8 stresses economic development and intergovernmental coordination which are among the Commission's primary missions. As the Regional Plan undergoes revision and detailing, the Coastal Plains Regional Commission — and its participating units of local, state, and Federal government — could seize an opportunity by casting a more significant portion of its planning in a mode which would seem compatible with the needs and preferences of the residents. 78 APPENDIX PERSONS CONTACTED IN PREPARATION FOR THIS REVIEW June 19 78 William Anders, Economic Development Administration, U.S. Department of Commerce, Washington, D.C. (Former Member of Federal Cochairman's Staff, Coastal Plains Regional Commission) . Claud Anderson, Federal Cochairman, Coastal Plains Regional Commission, Washington, D.C. Charles Coss, Economic Development Administration, U.S. Depart- ment of Commerce, Washington, D.C. (Former Executive Director, Coastal Plains Regional Commission) . Tony N. Magoulas , Special Assistant, Office of the Federal Cochairman, Coastal Plains Regional Commission, Washington, D.C. Ward Miller, Economic Development Administration, U.S. Depart- ment of Commerce, Washington, D.C. (Former Member of Federal Cochairman's Staff, Coastal Plains Regional Commission). Bruce Morehead, Office of the Federal Cochairman, Coastal Plains Regional Commission, Washington, D.C. Richard M. Poythress, Planning and Evaluation Officer, Coastal Plains Regional Commission, Charleston, S.C. Robert N. Rauner, Acting Deputy, Office of Regional Economic Coordination, U.S. Department of Commerce, Washington, D.C. Lee Schoenecker, Liaison Officer for Region IV Federal Regional Council, Intergovernmental Affairs Division, U.S. Office of Management and Budget, Washington, D. C. Eric Slaughter, Economic Development Administration, U.S. Department of Commerce, Washington, D.C. (Former Staff Member of Coastal Plains Regional Commission) . Harold Williams, Deputy Assistant Secretary, Economic Develop- ment Administration, U.S. Department of Commerce, Washington, D.C. (Former Consultant to Coastal Plains Regional Commission) 79 To: Robert Rauner From: Ben Chinitz Re: Review of Coastal Plains Regional Commission Economic Development Plan, September 1976. I. Summary Appraisal The document is quite useful as an information piece. It reviews the history of Title V and the history of CPRC. It provides a lot of interesting information on the economy of the Region, both cross-section and trends. It describes how the CPRC operates. The document is unusually frank about the limitations of resources the state of the art of economic development planning, and the power of. the CPRC. The Plan's strongest feature is its articulation of goals. The emphasis on per capita indicators as opposed to gross measures of popu- lation, employment and income, is (in my view) correct and commendable. That approach reduces, although it does not eliminate, the probability of interregional inconsistency (530.3 (b) ) and it maximizes the chances of, thought it does not guarantee, a net national contribution. But the document (and the Plan) is woefully inadequate on the following key components: 530.2 (d) Review of conditions inhibiting growth 530.2 (g) Determination of a development strategy 80 and is relatively weak on aspects of 530.2 (c) Review of the regional economy 530.2 (h) Review of existing program adequacy. The weakenesses of the plan are most apparent in the statement of objectives where the qualitative goals are translated into quanti- tative targets for 1987. The spurious specificity of these targets stands in sharp contrast to the large real gaps in the underlying anal- ysis. In what follows we shall deal in more detail with the headings enumerated above. II. Review of Conditions Inhibiting Growth The document and the plan make much of the fact that an inordi- nately large fraction (.63) of manufacturing employment in the Region is in low wage industries. This is seen as depressing per capita income. Reducing that fraction to .5 is the key objective and that is to be accomplished by stimulating the addition of 169,000 high wage jobs in the Region. Why does the Region specialize An low wage manufacturing? What are the factors which inhibit the growth of high wage manufacturing in the Region? Is there a difference between Regional wage levels and national wage levels in specific industries? Is that difference smaller or greater in low wage industries than in high wage industries? Considering the central ity of this issue it is absolutely amazing that these questions are totally ignored in the Plan. Surely this repre- sents the underutilization of the state of the art. There has been a fair amount of research and a lot written on the dynamics of Southern 81 economic growth. Surely one could expect to find in the CPRC an analysis relating the experience of this Region to the larger phenomenon of Southern growth, showing how and why the composition of growth differs between the two. The document does take the trouble to point up differences within the Region. Florida and Virginia both have more high-wage than low-wage manufacturing while North and South Carolina accentuate the regional tendency to low-wage manufacturing employment. Why? Also in the Appendix are CP employment estimates for each two digit manufacturing industry for 1950, 1960, 1967, 1970, and 1973. The apparel industry which is clearly a low-wage industry has grown very rapidly in the Region. The same can be said of miscellaneous manufacturing. But the so-called high-wage industries as a group have grown more rapidly. The most rapidly growing industry — electrical machinery — barely qualifies as a low-wage industry at $4.15 average hourly wage compared to the overall average of $4.22! To repeat: the failure to analyse the growth of the manufacturing sector by industry and by sub-region leaves a gaping hole in the document and undermines the validity and the value of the whole plan. III. Determination of a Development Strategy The weakness here is inherent in what has already been noted above. Without the kind of industrial and geographic detail which is so sorely lacking, and if the goal of increasing high wage employment is central, the notion of a strategy is to say the least presumptious. Instead, what is offered as a strategy is no more than a series of statements about the sorts of choices one has to make in spending a 82 small amount of money on large goals and how one essentially avoids making such choices by pursuing a very eclectic strategy. The choices which are discussed are either trivial — like how much for each of the purely bureaucratic categories -- or such choices as where , which transcend the available analysis. The discussion is so general that it could be applied to any arbitrarily selected Title V Commission as long as one paid no attention to the core issues confront- ing that region. The section on priorities also reflects a very high degree of eclecticism. Virtually nothing is precluded. Admittedly, there is a ranking from 1 to 11 and the questions to be put to each proposal are sound ones. IV. Review of the Regional Economy The Plan falls short here in ways which have already been sug- gested above. Despite abundant data in the appendices, the body of the document fails to take advantage of that data to develop a more detailed disaggregated analysis of the regional economy, particularly the manu- facturing sector. Table 19 (p. 49) seems to contradict the central thesis of the Plan. Both Carolinas which, as noted earlier, have the large proportions of low wage manufacturing jobs, display the most rapid rate of growth in per capita income ! Regulation 530.2 (c) also states: "it (the Plan) should analyse the present capability of the infrastructure to support economic growth." There is no such analysis in this Plan. Likewise, the call for an analysis of growth centers is largely neglected. 83 V. Review of Existing Program Adequacy This is also a neglected topic. Ther'e is no analysis of exist- ing federal and state spending in the Region which relates to the goals and objectives of the CPRC and how the spending of the CPRC complements or supplements these programs. 84 UNITED STATES DEPARTMENT OF COMMERCE Bureau of Economic Analysis Washington. DC. 20230 OFFICE OF THE DIRECTOR June 20, 1978 MEMORANDUM TO: FROM SUBJFCT Dr. Robert Rauner Chief Economist Office of Regional Affairs and Program Coordination Department of Commerce Daniel H. Garni ck / j \ Associate Director for _y v Regional Economics Comments on the Coastal Plains Regional Commission Economic Development Plan The Plan might benefit from a more thorough examination of the possible implications of the apparent post-1970 growth accelera- tion in the Coastal Plains Region. To what extent, for example, should the new growth trends suggest modification of the Commission's job and income growth stimulation objectives? In particular, would further growth stimulus in the Southeast run the risk of accelerating North-South migration and possibly contribute to serious economic adjustment problems in both regions? The migration data shown in the Appendix (Table B-2) indicate that over two- thirds of the Coastal Plains planning districts experienced net inmigration of population from 1970 to 1974, compared with less than one-third of the districts from 1960 to 1970. Moreover, a slightly larger proportion of the planning dis- tricts with per capita incomes below the regional average were estimated to have had net inmigration during 1970-74 than was true of planning districts with per capita incomes above the regional average (70 percent of the low-income vs. 67 percent of the high-income districts). During the 1960's, proportionately many more high income districts had net inmigration than low income districts (62 vs. 19 percent). If it is low costs of living and "noneconomic" amenities which are stimulating migration into low income areas in the Coastal Plains Region, then it may not be ap- propriate to pursue policies designed to accelerate the tendency for per capita income, unadjusted for cost-of-living, in the Coastal Plains to approach the national average or to accelerate 85 pump* '^6-!9l fo the convergence of per capita incomes among planning districts. Adequate data for examining the importance of cost-of-living and amenity differences among regions are generally not avail- able, but the issue is important for policy purposes and de- serves more attention than it is given in the planning report. In general, it is very difficult to evaluate the statistical analysis in the report because analytical methods are usually not spelled out. For example, employment estimates for Census years are based on Census of Population data, while presumably comparable estimates for selected noncensus years are based on County Business Patterns data (see, e.g., Appendix Table B-6); but, it is not stated what assumptions were used to adjust for coverage and definitional differences between Census and CBP employment data. In particular, the Population Census counts workers by place of residence, while CBP counts jobs by place of work, and the Census covers all workers, while CBP is re- stricted to private, nonagricultural wage and salary jobs. Not only would it be helpful to have a more thorough discussion of the methods and assumptions (and their weaknesses) underlying the historical estimates shown in the report, but it would also help to have a more complete discussion of the 1980 employment projections prepared for industries and planning districts (Tables B-6 and B-3). cc: George Jaszi , Dir. , BEA Allan H. Young, Dep. Dir., BEA UNITED STATES DEPARTMENT OF COMMERCE The Assistant Secretary for Economic Development Washington. DC. 20230 JUL 6 1979 MEMORANDUM TO Robert Rauner Office of the Special Assistant to the Secretary for Regional Economic Coordination FROM : SUBJECT: Robert T. Hall Assistant Secretary for Economic Development /&!* D. &£*JZjg_ Review of Coastal Plains Regional Development Plan EDA has reviewed the draft CPRC Development Plan, several elements of the plan are outlined below: Comments on 1. Funding level. CPRC notes $92 million will be required annually over "the next eight years to achieve stated goals. As this amount exceeds the Commission's total appro- priation since its beginning, it suggests that goals and objectives have been set too high. CPRC may wish to consider several different budget levels (e.g. current, probable, and desired) and indicate which goals could be achieved with each level . 2. Data presentation. Tables and charts do not present data on consistent basis. Some provide data for the CPRC portion of the state, while others present data for the whole state. Presenting both would provide some comparability between the CPRC portion of the state and the state as a whole. 3. Investment strategy. CPRC has identified a list of categorical project priorities. Projects are then compared to additional criteria, which attempt to measure the benefits of the project (the region vs. a particular area, low-income groups vs. general public, etc.). Priorities for the measures are also identified. CPRC requires each State to maintain an investment plan. 87 Although most projects originate at the state level, it is unclear as to the use made of these State plans in funding CPRC projects. (e.g., Must projects be included in State investment plans to be eligible for CPRC assistance?) In general, we are pleased with the efforts CPRC has made to address the economic development needs of its respective areas. 88 UNITED STATES DEPARTMENT OF COMMERCE The Assistant Secretary for Industry and Trade Washington, D.C. 20230 o 87* MEMORANDUM FOR Dr. Robert Rauner Rgtom 2092 From: Subject: obert E. Shepherd Deputy Assistant Secretary for Domestic Business Development Review of Coastal Plains Regional Development Plan In accordance with Anne Wexler's memo of April 24, 1978, we have reviewed the Coastal Plains Regional Commission's third long range economic plan. The goals and objectives are clearly laid out, and appear to be obtainable. The plan also describes adequately the economic problems and potentials of the region, and provides a framework for anticipating future (mid and long- range) issues. The plan also indicates that the Commission's coordination and development process is functioning well. Lastly, we noted that the Commission has established an advisory committee to develop marine resources in its region. Because NOAA is presently seeking to work with interested parties to develop marine resources , we suggest that NOAA and the Commission get together, if they have not already, to explore possible joint projects. The Commission plan sent to us for comment was drafted during late 1975 and the first half of 1976. Is this draft plan, which is two to three years old, the latest one for the Commission? 89 1 JUL 1978 MEMORANDUM FOR: FROM: SUBJECT: f V \ "''mi O* * UNITED STATES DEPARTMENT OF COMMERCE The Assistant Secretary for Tourism Washington, D.C. 20230 Lawrence 0. Houstoun, Jr. Acting Executive Secretary Federal Advisory Council on Regional Economic Development Jeanne Westphal \nMW^/ Deputy Assistantl^Secr^feary for Tourism Coastal Plains Regional Development Plan Thank you for the opportunity to review the Coastal Plains Regional Development Plan. I am pleased to see that tourism has not only been a topic of earlier planning by the Coastal Plans Regional Commission (CPRC) , but that it continues to be among their priority areas for program strategy. The Report acknowledges that tourism is an important ingre- dient in the development of jobs and income throughout the Region, and recognizes that, since the Region has already established a substantial tourism industry and has the potential for expanding that industry, it will be wise for the Region to devote portions of its efforts to tourism projects. I will ask my domestic tourism staff to consider the develop- ment goals and objectives of the CPRC in planning USTS 1 domestic tourism program. In addition, I would like to offer the following comments on the Plan. First, the Report identifies the need for better data and analysis in order to know, for example, the extent to which tourism contributes to regional income. I would urge that, in this area of program strategy, tourism be viewed broadly so as to permit better ranking of program priorities. For example, travel to and through the Region by Canadian vacationers might be considered along with intra-regional travel by Americans. Second, the planning for tourism studies and demonstration programs should include consideration of their interrelationship with other program priorities, such as their potential to impact on lagging areas, and to augment infrastructure development in areas such as transportation. Finally, with regard to implementation strategy, a tourism advisory committee composed of the state travel directors from Florida, Georgia, North Carolina, South Carolina, and Virginia would be indispensable to the program. 90 APPENDIX C EXECUTIVE ORDER NO. 11386 DATED DECEMBER 28, 1967 ESTABLISHING THE FEDERAL ADVISORY COUNCIL ON REGIONAL ECONOMIC DEVELOPMENT 91 Presidential Documents Title 3 — THE PRESIDENT Executive Order 11386 PRESCRIBING ARRANGEMENTS FOR COORDINATION OF THE ACTIVI- TIES OF REGIONAL COMMISSIONS AND ACTIVITIES OF THE FEDERAL GOVERNMENT RELATING TO REGIONAL ECONOMIC DEVELOPMENT, AND ESTABLISHING THE FEDERAL ADVISORY COUNCIL ON REGIONAL ECONOMIC DEVELOPMENT WHEREAS the proper discharge of Federal responsibilities under the Appalachian Regional Development Act of 1965 (79 Stat. 5, 40 U.S.C. App.) and the Public Works and Economic Development Act of 1965 (79 Stat. 552, 42 U.S.C. 3121 et seq.), as amended by Public Law 90-103, 81 Stat. 257, requires that the participation of the Federal Government in regional development activities be effectively coordinated; WHEREAS the President is required by the Appalachian Regional Develop- ment Act of 1965 to provide effective and continuing liaison between the Federal Government and the Appalachian Regional Commission; WHEREAS the Secretary of Commerce has responsibility under the Public Works and Economic Development Act of 1965 for Federal economic development activities designed to alleviate conditions of substantial and persistent unemployment and underemployment in economically distressed areas and regions of the Nation ; WHEREAS the Secretary of Commerce is directed by the Public Works and Economic Development Act of 1965 to coordinate the Federal Cochairmen appointed to regional commissions established before or after the date of that Act; WHEREAS the Secretary of Commerce is required by the Public Works and Economic Development Act of 1965 to provide effective and continuing liaison between the Federal Government and each regional commission established under Title V of that Act; and WHEREAS the Secretary of Commerce has been Chairman of the President's Review Committee for Development Planning in Alaska, established to provide general direction and guidance to the Federal Field Committee for Development Planning in Alaska, established by Executive Order No. 11182, dated October 2, 1964; NOW, THEREFORE, by virtue of the authority vested in me by the Appalachian Regional Development Act of 1965, the Public Works and Economic Development Act of 1965, and section 301 of Title 3 of the United States Code, and as President of the United States, it is ordered as follows: SECTION l. Functions of the Secretary of Commerce. The Secretary of Commerce shall — (a) Provide the effective and continuing liaison required by section 104 of the Appalachian Regional Development Act of 1965 and by section 503(c) of the Public Works and Economic Development Act of 1965 between the Federal Government and each regional commission established under those FEDERAL REGISTER, VOL. 33, NO. 1 — WEDNESDAY, JANUARY 3, 1968 92 THE PRESIDENT Acts, and between the Federal Government and the Federal Field Committee for Development Planning in Alaska (hereinafter referred to as "the Field Committee"). (b) Obtain a coordinated review within the Federal Government of plans and recommendations submitted by the commissions and the Field Committee. (c) Provide guidance and policy direction to the Federal Cochairmen and the Chairman of the Field Committee with respect to their Federal functions. (d) Promote the effective coordination of the activities of the Federal Government relating to regional economic development. (e) In carrying out the functions set forth in section 1 (a), (b),(c), and (d) the Secretary of Commerce shall — (1) Review the regional economic development plans and programs submitted to him by the Federal Cochairmen, budgetary recommendations, the standards for development underlying those plans, programs and budgetary recommendations, and legislative recommendations; and advise the Federal Cochairmen of the Federal policy with respect to those matters, and where appropriate, submit recommendations to the Director of the Bureau of the Budget. (2) Review and advise the Chairman of the Field Committee with respect to the tentative plans and recommendations of the Field Committee, and receive and consider the final plans and recommendations of the Field Committee and transmit them to the heads of interested Federal departments and agencies and to the President. (3) Resolve any questions of policy which may arise between a Federal Cochairman and a Federal department or agency in the implementation of regional development programs. (4) Appoint a Special Assistant and other staff as required to assist him in carrying out these functions. SEC. 2. Establishment of the Council, (a) There is hereby established the Federal Advisory Council on Regional Economic Development, hereinafter referred to as "the Council." (b) The Council shall be composed of the following members: The Secretary of Commerce, who shall be the Chairman of the Council (hereinafter referred to as "the Chairman"), the Secretary of Agriculture, the Secretary of the Army, the Secretary of Health, Education, and Welfare, the Secretary of Housing and Urban Development, the Secretary of the Interior, the Secretary of Labor, the Secretary of Transportation, the Director of the Office of Economic Opportunity, the Administrator of the Small Business Administra- tion, the Federal Cochairman of the Appalachian Regional Commission, such Federal Cochairman as are appointed by the President under authority of Title V of the Public Works and Economic Development Act of 1965, and the Chairman of the Field Committee. (c) Whenever matters within the purview of the Council may be of interest to heads of Federal departments or agencies not represented on the Council under section 2(b) of this order, the Chairman may consult with the heads of such departments and agencies and may invite them to participate in meetings and deliberations of the Council. FEDERAL REGISTER, VOL. 33, NO. 1 — WEDNESDAY, JANUARY 3, 1968 93 THE PRESIDENT (d) The Council shall meet at the call of the Chairman. SEC. 3. Functions of the Council. The Council shall assist the Secretary of Commerce in carrying out the functions set forth in section 1 of this order, and shall, as requested by the Secretary of Commerce — (a) Review proposed long-range economic development plans prepared by the regional commissions and the Field Committee. (b) Recommend desirable development objectives and programs for such regions and Alaska. (c) Review proposed designations of additional economic development regions under Title V of the Public Works and Economic Development Act of 1965. (d) Review Federal programs relating to regional economic development, develop basic policies and priorities with respect to such programs, and recommend administrative or legislative action needed to stimulate and further regional economic development. (e) Review proposed department or agency regional economic development plans. (f) Recommend surveys and studies needed to assist the Secretary of Commerce and the Council in carrying out their functions. SEC. 4. Responsibilities of the Participating Federal Agencies, (a) Each Federal department and agency the head of which is referred to in section 2(b) of this order shall, as may be necessary, furnish assistance to the Council in accordance with the provisions of section 214 of the Act of May 3, 1945 (59 Stat. 134,31 U.S.C.69I). (b) The head of each such Federal department or agency shall designate an Assistant Secretary or equivalent level official who shall have primary and continuing responsibility for the participation and cooperation of that department or agency in regional economic development as required by this order. (c) The head of each such Federal department or agency shall keep the Secretary of Commerce and the Council informed of all proposed regional economic development plans of his department or agency. (d) The head of each such Federal department or agency shall, consonant with law and within the limits of available funds, cooperate with the Council and with the Secretary of Commerce in carrying out their functions under this order. Such cooperation shall include, as may be appropriate, (1) furnishing relevant available information, (2) making studies and preparing reports, (3) in connection with the development of programs, priorities, and operations of the department or agency, giving full consideration to any plans and recommenda- tions for the economic development of the various regions, including recommendations made by the Council, and (4) advising on the work of the Council as the Chairman may from time to time request. SEC. 5. Responsibilities of the Federal Cochairmcn and the Chairman of the Field Committee. The Federal Cochairmen, and the Chairman of the Field Committee as appropriate, shall - - FEDERAL REGISTER, VOL. 33. NO. 1 — WEDNESDAY, JANUARY 3, 1968 94 THE PRESIDENT (a) Maintain continuing liaison with the Secretary of Commerce with respect to the activities of the regional commissions and the Field Committee. (h) Adhere to general Federal policies affecting regional economic develop- ment that are established by the Secretary of Commerce. (c) Inform the appropriate Federal departments and agencies of programs and projects to be considered by the commissions, and attempt to obtain a consensus within the Federal Government through consultation with appro- priate Federal agency representatives before casting a vote on any such matter. (d) Represent the participating Federal departments and agencies in connection with the activities of the regional commissions. (e) Submit to the Secretary of Commerce regional economic development plans and programs of the regional commissions, budgetary recommendations, legislative recommendations, and progress reports, as requested by the Secretary of Commerce, on the activities of the regional commissions. (f) Submit reports required by section 304 of the Appalachian Regional Development Act of 1965 and by section 510 of the Public Works and Economic Development Act of 1965 to the Secretary of Commerce for review prior to transmittal to the President or the Congress. SEC. 6. Appalachian Program, (a) Funds appropriated pursuant to sections 201 and 401 of the Appalachian Regional Development Act of 1965 shall be available to the Federal Cochairman of the Appalachian Regional Commission for the purposes of carrying out that Act. (b) The Federal Cochairman of the Appalachian Regional Commission is delegated the functions conferred upon the President by sections 214(a), 302(a), and 302(c) of the Appalachian Regional Development Act of 1965, which shall be exercised by him in accordance with the provisions of this order. SEC. 7. Construction. Nothing in this order shall be construed as subjecting any function vested by law in, or assigned pursuant to law to, any Federal department or agency, to the authority of the Council or the Secretary of Commerce, or as abrogating or restricting any such function in any manner. SEC. 8. Definition. Except as the context may otherwise require, any reference herein to any Act, or to any provision of any Act, shall be deemed to be a reference thereto as amended from time to time. SEC. 9. Prior Executive Orders, (a) Executive Order No. 11182, as amended, is hereby further amended as follows: (1) By changing the heading of the order so as to read as follows: "ESTABLISHING THE FEDERAL FIELD COMMITTEE FOR DEVELOP- MENT PLANNING IN ALASKA". (2) By striking the words "the Housing and Home Finance Administrator" from section 1(b) and by inserting in lieu thereof the words "the Secretary of Housing and Urban Development, the Director of the Office of Economic Opportunity" (3) By substituting the following for subsection (a) of section 2: "(a) Subject to the general direction and guidance of the Secretary of Commerce, the Field Committee shall serve as the principal instrumentality for developing coordinated plans for Federal programs which contribute to FEDERAL REGISTER, VOL. 33, NO. 1 — WEDNESDAY, JANUARY 3, 1968 95 THE PRESIDENT economic and resources development in Alaska and for recommending appropriate action by the Federal Government to carry out such plans." (4) By striking from sections 3(e) and 3(f) the words "Review Committee" and by inserting in lieu thereof the words "Secretary of Commerce." (5) By revoking Part II. The President's Review Committee for Develop- ment Planning in Alaska, established by that Part, shall be deemed to be hereby abolished. (6) By redesignating Part III and section 31 thereof as Part II and section 21, respectively. (7) By redesignating Part IV and sections 41, 42, and 43 as Part III and sections 31, 32, and 33, respectively, and by striking from the redesignated section 33 the words "and the Review Committee". (b) The Federal Development Committee for Appalachia, established by Executive Order No. 11209 of March 25, 1965, is hereby abolished and that order is hereby revoked. IS/ LYNDON B. JOHNSON THE WHITE HOUSE, December 28, 1967. [F.R. Doc. 68-111; Filed, Jan. 2, 1968; 10:37 a.m.] FEDERAL REGISTER, VOL. 33. NO. 1 — WEDNESDAY, JANUARY 3, 1968 THE PRESIDENT Title 3 -- The President EXECUTIVE ORDER 11608 Termination of Federal Field Committee for Development Planning in Alaska By virtue of the authority vested in me as President of the United States, Executive Order No. 11182 of October 2, 1964, as amended, is revoked and the Federal Field Committee for Development Planning in Alaska established thereby is abolished. Executive Order No. 11386 of December 28, 1967, to the extent that it pertains to the Federal Field Committee for Development Planning in Alaska, is revoked. The Secre- tary of Commerce shall make such arrangements as may be necessary relating to the termination of the Committee. THE WHITE HOUSE, July 19, 1971 s/ Richard Nixon [FR Doc. 71-10414 Filed 7-19-71;4:20 pm] FEDERAL REGISTER, VOL. 36, NO. 140 -- WEDNESDAY. JULY 21, 1971 90 *U.S. GOVERNMENT PRINTING OFFICE 1979 0-281-067/47 j PENN STATE UNIVERSITY LIBRARIES A0DDD7D c itiMMSS «t*T , c x / r ATES O*