To get more aid for common problems, states team up

Call it a positive legacy of the battle over the spotted owl.

In 1993, legislation to protect the infamous fowl forced mill closures in Oregon, Washington, and California, leaving timber communities gasping for air. In reaction, the states of the Pacific Northwest came together to discuss economic devastation in rural areas.

"It became clear that communities were impacted by a lot more than just the spotted owl," says Gary Mahn, former director for Idaho's Department of Commerce (IDC). "We began informally working together to gather data ... and that's been the case ever since."

Now, Idaho, Oregon, Montana, and Washington are hoping to formalize the process by forming a commission to pool resources, as well as solicit federal funds.

Across the nation, other hard-hit regions are taking similar measures. Since 1995, population growth in nonmetropolitan areas has dropped by nearly one-third, and 20 percent of all rural manufacturing jobs have vanished in the past two years alone. Struggling states are teaming up to look for innovative ways of addressing common problems.

Iowa, Minnesota, Nebraska, North Dakota, and South Dakota recently formed the Northern Great Plains Inc. (NGP). President Jerry Nagel says there have already been palpable improvements and points to small agricultural processing operations coming together to expand their markets.

"Big grocery-store chains don't want to buy a small amount of product or work with a hundred small distributors," says Mr. Nagel. "But if small operations team up ... they can talk to these chains."

Other unions include the Southwest Regional Border Authority, including California, Arizona, New Mexico, and Texas; and the seven-state Southeast Crescent Authority. These groups and others have taken their cue from the Appalachian Regional Commission (ARC), 13 states that partnered with the federal government in 1965 to combat poverty and unemployment in Appalachia. Since it began, poverty has decreased by 65 percent and the number of "distressed" counties has been cut in half.

The ARC model is "a real partnership," says Aliceann Wohlbruck, director of the National Association for Development Organizations. Ms. Wohlbruck notes that the ARC model engages every level of government, including the federal. And once approved by Congress, regional commissions can work with federally appointed chairs to allocate funds.

"They're not making grants hither and yon," she says. "Everybody has to buy into it. It makes for really public investments."

Wohlbruck adds that one strength of the ARC model is its emphasis on local involvement. State officials agree that long-term solutions require local efforts.

"Without it, these programs don't work," says IDC spokeswoman Georgia Smith. "We need somebody at home ... to rally the community."

One such example is Jerome, Idaho. When the town's Tupperware plant closed in 1987, the county's 15,000 residents saw 10 percent of their jobs dry up overnight. "Jerome was dying," says longtime resident Con Paulos. "The plant was the thing that welded the community together." Mr. Paulos and a handful of local business owners formed a task force, which met weekly in a cafe. Over breakfast, the group discussed ways in which their town, which also depended on agriculture, could economically diversify. Then, with state backing, Jerome invested in a business center and began courting companies to open plants.

Jerome is now home to a plant that produces plastics as well as factories that produce cheese, condensed milk, and powdered milk. The town has gone from one of Idaho's most economically depressed counties to its fourth most prosperous.

But without government aid, cities like Jerome would have a difficult time evolving, says Greg Rogers, an economist for Idaho's Department of Labor. He points to the recent opening of a Dell technical support center in Jerome's neighboring town, Twin Falls. When Dell was considering the site, the state offered $3,000 per worker in job training, and the local community college began offering classes tailored to Dell's needs. These were key factors in the computer giant's decision to locate to Twin Falls, according to a company spokesman.

"Dell changed the complexion of the community," says Dave McAlindin, economic development director for Twin Falls. "As is often the case in smaller communities, young people leave to seek fame and fortune elsewhere. This gives them the chance to work with a national employer and get a good salary and benefits."

All this is proof of the need for funding, says Karl Tueller, deputy director for IDC. "You aren't funding them forever ... just until they can stand on their own."

Getting this money is the primary reason states are forming regional commissions. Whereas Idaho was able to invest $2.3 million in rural development this year, the ARC received $71 million from the federal government.

But pickings may be slimming. Congress is proposing to slash ARC funding in half, along with other rural development programs. If cuts continue, states may have to depend on their own limited funds.

When asked about the prospect of Idaho's efforts always relying on state money, Mr. Tueller sighs. "We can do it alone. There's just a lot less we can do."