Michael Collins

USA TODAY NETWORK - Tennessee

WASHINGTON — Exit 417 off Interstate 40 is not just another speck on the map for tiny Dandridge, Tenn., population 2,800.

The interchange is an economic engine: a place where travelers pull off the highway to gas up, grab a quick bite to eat or maybe even crash for the night at one of the nearby hotels.

Next spring, the East Tennessee city is hoping to embark on a $1.8 million project to make water more readily available to the interchange, allowing for more commercial and industrial development and ultimately sending more tax dollars into the city treasury.

But part of the city’s strategy for the funding the project is in doubt. Just a few weeks after the city applied for a $750,000 grant from the Appalachian Regional Commission, President Trump proposed eliminating all funding for the agency — a move that, if approved by Congress, would stop the flow of federal dollars for such projects into communities in 13 states.

Asked whether the interchange project would happen without the federal money, Dandridge town administrator Melissa Peagler replied, “Not anytime soon."

“It would delay the project at the very least,” she said.

The Appalachian Regional Commission is far from the only federal agency Trump is targeting. The proposed budget he submitted to Congress two weeks ago would eliminate funding for 62 agencies or programs, many of which provide assistance to people in the small, rural and often poor communities that helped send Trump to the White House.

Trump’s proposal is just the starting point in the upcoming budget discussions. Congress could ditch his budget and write its own, so many of the cuts he’s proposing are unlikely to survive intact.

Trump’s spending plan already has drawn fire from congressional Democrats and some Republicans for the deep cuts he is proposing. Rep. Hal Rogers, a Republican who represents the impoverished coal-mining region of southeastern Kentucky, dismissed it as “draconian, careless and counterproductive.” Sen. Lindsey Graham, R-S.C., declared it dead on arrival.

One of the other agencies Trump wants to disband is the Delta Regional Authority, an economic development agency for eight states in the Mississippi Delta region. Since its creation in 2000, the Clarksdale, Mississippi-based agency estimates it has invested $163 million in projects or programs that have attracted $3.3 billion in public and private investments into the region it serves, which includes Shelby County and 20 other counties in West Tennessee.

In Tennessee alone, where Trump carried 92 of the state’s 95 counties, the authority says it has made $20.4 million in direct investments into dozens of projects. When the money is combined with other public dollars and private funding, the agency’s investment in the state has leveraged more than $590 million, said Chris Masingill, the agency’s co-chairman.

Back in 2012, when Shelby County needed money to widen a road leading to the industrial park where the kitchen-appliance manufacturer Eletrolux Home Products was building a 700,000-square-foot plant, the Delta Regional Authority stepped in at the last minute and provided $3 million.

“It was the 11th hour, a lot of money had been invested, and we were running the risk of losing” the Electrolux project, Shelby County Mayor Mark Luttrell said.

“When we were really kind of pulling our hair about how to get this last piece of it done, Chris Masingill and the Delta Regional Authority stepped up and said, ‘Let’s see if we can do it,’” Luttrell said.

Other projects the authority has funded include a marketing and feasibility study along what will become the I-269 corridor; an expansion of the Metro Memphis Export Alliance to boost exports and manufacturing jobs; and Food Linc to boost demand for Memphis-area farm produce.

Right now, the authority is operating under a $32 million budget allocation from the federal government. Losing that funding would take away the agency’s ability to make investments in the communities it serves and mean it would eventually close its doors, Masingill said.

The Appalachian Regional Commission (ARC), a 52-year-old agency created as part of President Lyndon Johnson’s War on Poverty, also is in jeopardy. The agency funds projects and programs to encourage economic growth in 420 counties in 13 states and currently operates on a $146 million budget — all of which is approved by Congress.

Read more:

The 62 agencies and programs Trump wants to eliminate

Republican budget experts say Trump budget dropped populism

Trump's first budget slashes education, health spending to make way for military buildup

Between October 2015 and last January, the agency estimates it has pumped $175.7 million into 662 projects and programs in Appalachia. That funding has been matched by more than $257.4 million and will attract an additional $443.3 million in private investments, the agency says. The funding typically goes to “distressed” communities with low per-capita incomes and high unemployment.

In the past two years alone, the ARC has provided nearly $19 million for dozens of projects in Tennessee, where it serves 52 counties mostly in the eastern and middle parts of state.

Eliminating those programs is short-sighted and would “punish the poorest Tennesseans, many of whom just voted for President Trump hoping he would bring jobs back, not end programs that create jobs and provide crucial funding for infrastructure projects,” said Chris Hayden, spokesman for the Center for American Progress Action Fund, a left-leaning think tank based in Washington.

The largest ARC grant that went to Tennessee in the past couple of years was $1.9 million to help with the planning and design for a general aviation airport in Oak Ridge, which officials say would serve the area’s business and technology markets and provide relief for Knoxville’s McGhee Tyson Airport.

But many other grants have been much smaller and have gone to rural areas to help pay for much-needed infrastructure projects, such as extending sewage or utility lines or building water treatment plants.

For those communities, the federal funding is often the only way those projects can be done, said Terry Bobrowski, executive director of the East Tennessee Development District.

“ARC is kind of last-dollar funding for a lot of these projects,” Bobrowski said. “They are typically projects that are not self-funding. But they are still critical projects to the local governments.”

In East Tennessee, “we’re a little perplexed that an infrastructure program was zeroed out” of Trump’s budget, Bobrowski said.

“It’s a very important program for the local governments in the counties that are in the ARC area, and it has been for the past 52 years," he said. "It has made a big difference here."

Impacted agencies

The Appalachian Regional Commission provides funding for projects and programs to encourage economic growth in communities in 13 states, including 52 counties in the eastern and middle parts of Tennessee. The funding is often used by local communities to help pay for much-needed infrastructure projects, such as water line and sewer expansions.

The Delta Regional Authority works to improve economic opportunities for communities in eight states in the Mississippi Delta region, including 21 counties in West Tennessee. It works with local, state and regional partners to support projects such as business incubators, job training and workforce development programs, and infrastructure and industrial development to attract new business investments.