From the U.S. Government Accountability Office, www.gao.gov

Transcript for: Funding for Areas With Persistent or High Poverty 

Description: Research suggests that areas with high poverty rates also
experience systematic problems such as higher levels of crime and school
dropouts, as well as longer durations of poverty by their residents.
What other characteristics do these communities have in common, and what
steps is the federal government taking to help economic development in
these areas? Today, we talked to Bill Shear, an expert in Community and
Economic Development, about these issues.

Related GAO Work: GAO-20-518, Targeting Federal Funds: Information on
Funding to Areas with Persistent or High Poverty

Released: July 2020

[Intro Music]

[Bill Shear] How much funding from these various economic development
programs are really serving the poorest communities in America?

[Holly Hobbs:] Hi, and welcome to GAO's Watchdog Report. Your source for
news and information from the U.S. Government Accountability Office. I'm
Holly Hobbs. 

Research suggests that areas with high poverty rates also experience
systematic problems such as higher levels of crime and school dropouts,
as well as longer durations of poverty by their residents. What other
characteristics do these communities have in common, and what steps is
the federal government taking to help economic development in these
areas? Today, we talked to Bill Shear, an expert in Community and
Economic Development, and a director in our Financial Markets and
Community Investment team. Thank you for joining us, Bill.

[Bill Shear:] Thank you for having me, Holly.

[Holly Hobbs:] So, Bill, what do we know about these communities that
have persistent or high poverty rates?

[Bill Shear:] One of our major objectives in this report is to use
Census data to determine where poverty is concentrated across our
nation. We found that when we look at rural counties in the South with a
majority of areas where we have persistent poverty. And by persistent
poverty, we mean areas that had poverty rates at least 20% or greater,
and that have had persistent poverty for 30 years or more. Then we
looked at zip codes and Census tracks. And we found that most Census
tracts with high poverty rates were in urban areas scattered across the
country. So, the urban poverty is more scattered across the country,
where in rural areas it's more concentrated in the South.

[Holly Hobbs:] So, the federal government has this data showing where
these communities are. What strategies are there for providing economic
assistance to these areas?

[Bill Shear:] Based on work we've done over the years, we observed a
very large number of economic development programs in a number of
agencies. And we see a large number of programs; and what we also
observe is that these programs, which involve counseling and training,
education programs, loan programs, investment programs, such as
infrastructure investments, that there's a lot of overlap among these
programs. And so, there's a lot of programs that are trying to direct
assistance to these areas. But what is lacking is information about who
exactly is being served by these various programs, and what are the
outcomes from these programs.

[ Music ]

[Holly Hobbs:] So it sounds like there are a lot of communities that are
struggling with long term or high poverty, and that the federal
government is providing assistance, but that these issues remain. Bill,
what is Congress doing its anything to increase funding to these areas?

[Bill Shear:] Beginning in 2009, in the American Recovery and
Reinvestment Act, legislation that for certain programs and rural
development at the Agriculture Department directing them to provide
greater funds to rural areas with high poverty rates. So what is often
called is the 10-20- 30 Formula, where it means that 10% of the funds
from the program in question should be directed to rural counties with
at least 20% poverty rates that have had that condition for over 30
years. More recently in 2019, legislation has been introduced, and this
legislation also looks at high poverty areas. So it's looking within the
urban areas, and so there's been legislation that would subject many
economic development programs to provide a greater levels of funding to
areas that have had high poverty rates for at least 5 years. Our work is
focused on these efforts. And this report is our first effort to address
the issue by just trying to say, where is poverty concentrated in
America?

[Holly Hobbs:] So are federal agencies tracking funding and outcomes to
determine the effect they're having on these communities?

[Bill Shear:] As I said, this is that first of what's going to be two
efforts. We're going to continue this work. And we continue as we speak
with actually going to agencies that operate, administer these programs.
And we are going to ask them, what do they do to track how much funding
they provide to high poverty areas and persistent poverty areas? And
what are their challenges and being able to change track this data. So
we will find out how much several agencies are currently doing to track
funding and outcome. Based on our previous work we think that this is
where there is a lack of information on who is being served, how much
funding is being provided, and have a lack of information on what is the
effect of these various programs.

[Holly Hobbs:] So, Bill, last question. What is the bottom line of this
report?

[Bill Shear:] Even though we've had many years of having programs that
are focused on high poverty communities, we are still largely at a
starting point, because we lack information on how much funding from
these [music] various economic development programs are really serving
the really the poorest communities in America.

[Holly Hobbs:] That was Bill Shear talking about GAO's recent review of
a federal program used to help communities with persistent or high
poverty. Thank you for your time, Bill.

[Bill Shear:] Thank you, Holly.

[Holly Hobbs:] And thank you for listening to the Watchdog Report. To
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For more from the congressional watchdog, the U.S. Government
Accountability Office, visit us at gao.gov. 

[Music]