Federal and rural

Twenty-nine years ago, Congress passed the Rural Development Act, which directed federal agencies to look first to less expensive places outside urban areas when building new facilities, both to distribute more evenly the economic and social benefits of federal development and to save money. Long term, the policy change was to be worth billions of dollars to small towns across the country, providing new career opportunities for rural residents and better access to government research.

Eleven years ago, the General Accounting Office reviewed the effect of the RDA, found that most agencies did not consider it at all when planning construction and made suggestions to Congress for improving the act. Chief among those was to develop policies that would help put this portion of the RDA into effect.

Last week, at the request of Sen. Byron Dorgan of North Dakota, the GAO reported on the issue again, finding that most federal agencies continue to locate in urban areas. The GAO’s results were as follows: “Eight of the 13 cabinet agencies surveyed had no formal RDA siting policy, and there was little evidence that agencies considered RDA’s requirements when siting new federal facilities. Further, [the General Services Administration] has not developed for congressional consideration a cost-conscious, governmentwide location policy, as we recommended in 1990.”

Federal agencies, the GAO found, preferred urban areas largely because their other facilities were already there, as were the facilities of other agencies. The agencies reported they could be more efficient if they relocated or expanded nearby. (Maine will find the argument familiar: the state can’t repair the rails to Eastport or extend I-95 because there’s not enough local development to make them cost-effective; that is, development will be encouraged only after development comes.)

But even if it is true that a federal agency is more efficient when it locates near its own other facilities or near another agency’s, the disadvantage of relocating to a rural area should be temporary and eliminated as more federal workers are clustered together in a rural region. The cost of staying in an urban area, however, is permanent. The average commercial rental rate for the central business areas of the nation’s 10 major cities is $32.13 per square foot of office space. In Bangor, the cost is closer to $12 or $14 a square foot. In addition, security costs are much lower in rural areas and the ability to expand far greater.

The GAO provides Congress with some simple ways to improve the effectiveness of what was a good idea 29 years ago and still is today. For instance, Congress could direct agencies to consider real estate, labor and other operational costs along with their program costs when considering a new site. It could be more specific about what it means by rural so that the agencies would know where to look and know further that suburban Washington, D.C. doesn’t count. It could encourage GSA to request a written explanation from federal agencies locating in urban areas whether they had given priority to rural areas, as required, and why they had not chosen one.

Maine’s delegation should help move these changes along to make the RDA as effective as originally planned. And it wouldn’t hurt if state officials reminded the delegation about this opportunity as often as possible.