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U Strategies to Revitalize Rural America Strategy #7 State Policy State policy can be a powerful force for economic development that builds strong rural communities and creates genuine economic opportunity for people. It is more difficult in the midst of today's state budget crises. But it's not impossible. States must make the commitment to sustain the most important programs for rural revitalization. That sometimes requires a will- ingness to balance spending cuts with tax increases. And it requires a willingness to scrutinize the use of every dollar available to community and economic development to ensure limited dollars are used in the best way possible. One place to start is by making common sense reforms in corporate job creation tax subsidies — reforms that could generate substantial savings to reinvest in rural revitalization. States can budget and cap the amount spent on job creation tax subsidies. States can cut the costs of such programs by imposing job quality require- ments on beneficiaries and denying subsidies for poor jobs. In addition, a corporate minimum tax would raise revenue and ensure that all profitable corporations — including those receiving job creation tax subsidies — contribute something to educating kids and providing vital services. The revenue raised could be used to balance corporate job creation incentives with investments in more en- trepreneurial development approaches that work in rural communities — small business, cooperative and grassroots leadership development. Key approaches include: Microenterprise development programs provide grants to programs that provide loans, training, technical assistance, and market development assistance to new and established owner operated businesses, typically with five or fewer employees. Studies have demonstrated that microenterprise development programs create jobs at a fraction of the cost of corporate job creation tax subsidies. Agricultural development programs provide funding and technical assistance for cooperatives and new mar- ket development initiatives. There are growing opportunities in higher value products — natural meats, local foods, and other niche products. But family farmers and ranchers must develop new cooperatives and mar- kets to capture those opportunities. Criteria for awarding funds should favor projects that increase the farm and ranch share of food system profit, increase self employment opportunities in farming and ranching, and strengthen small and mid -size operations. Without such criteria, agricultural development programs can eas- ily turn into subsidies for corporate farming and agribusiness development. Grassroots Leadership and Community Development — Community revitalization starts at the grassroots. Community members must come together, develop their leadership skills, and build consensus and commit- ment on moving forward in securing their future. States can provide seed funding for technical assistance and training to help communities make it happen and provide the impetus for neighboring communities to band together to make their efforts more effective. The emphasis should be on initiatives that engage the whole community from the grassroots up. Page 20