Co-ops and the Federal Budget


Steve Freese, WECA President & CEO

As a new federal budget works its way through Congress, your statewide electric co-op association will engage with our legislators to help shape the document that lands on the president’s desk. For rural America, the budget President Trump proposed to Congress is a mixed bag of spending and policy priorities.

Start with the parts that are very positive from our point of view. The president’s budget maintains a $5.5 billion Rural Utilities Service (RUS) Electric Loan Program. Many electric cooperatives utilize these funds to improve service to some 42 million Americans, and a special point of pride is the well-earned reputation of electric co-ops as a good credit risk. RUS loans are among the few federal budget items that actually generate positive returns to the U.S. Treasury. This year alone, more than $300 million dollars in co-op loan repayments will help chip away at the federal deficit. The Wisconsin Electric Cooperative Association will be fully supporting this budget provision.

The president’s budget also provides $26.9 million for the Broadband Loan Program which this organization supports, recognizing the transformation that occurs in rural communities when infrastructure is modernized. Whether it’s a new road, water and sewer lines, or broadband availability, any of these make a community more competitive to attract or retain business; the community becomes a better place for its citizens to live.

In some other areas in the budget proposal, rural America doesn’t do as well. Rural development takes it on the chin. The budget would eliminate funding for programs important to communities served by electric cooperatives, such as the Rural Economic Development Loan and Grant (REDLG) program.

Cooperatives utilize RUS loans to finance affordable, reliable service to approximately 42 million people. These loans are repaid with interest to the U.S. Treasury and actually contribute to reducing the national debt.

The REDLG program allows electric co-ops to locally administer financing for development projects in the communities they serve. In many rural communities the electric cooperative is the only entity taking on this role because the critical mass just doesn’t exist outside the co-op. Here in Wisconsin, co-ops working through the REDLG program have enabled job creation and business growth, revitalizing rural communities. Your statewide organization will work to restore this $85 million budget item so electric cooperatives can continue fostering development projects in their member-owners’ hometowns.

Other budget cuts affecting rural America include the Rural Cooperative Development Grant Program, High Cost Energy Grant Program, Rural Energy Savings Program, and the Rural Energy for America Program. Each plays an important role, and we will work with our members of Congress to restore them.

In the context of the enormous federal budget, you may be struck by the comparatively modest sums involved. One reason America’s electric cooperatives have been successful in defending these programs over the years is that they don’t ask for a lot, and they deliver positive results for the taxpayers’ investments.

In that regard, the proposed creation of a new Rural Economic Infrastructure Grant Program might benefit from co-op input. The proposal would consolidate the Community Connect Broadband Grant Program, the Distance Learning and Telemedicine Grant Program, Section 504 Housing Repair Program, and Community Facilities Grant Program. The federal government’s only broadband grant program would be combined with three others, and co-ops want to be sure there’s a clear understanding of what the new program actually funds.

We have our work cut out for us making certain our federal lawmakers understand the impact of these issues on rural communities. Fortunately, your co-ops have built strong relationships, and we have lawmakers who are willing to work with us on these important issues.