[Senate Hearing 106-960]
[From the U.S. Government Publishing Office]
S. Hrg. 106-960
OVERSIGHT OF THE APPALACHIAN REGIONAL COMMISSION
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FIELD HEARING
BEFORE THE
SUBCOMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
OF THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
AUGUST 8, 2000
NELSONVILLE, OHIO
__________
Printed for the use of the Committee on Environment and Public Works
______
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED SIXTH CONGRESS
second session
BOB SMITH, New Hampshire, Chairman
JOHN W. WARNER, Virginia MAX BAUCUS, Montana
JAMES M. INHOFE, Oklahoma DANIEL PATRICK MOYNIHAN, New York
CRAIG THOMAS, Wyoming FRANK R. LAUTENBERG, New Jersey
CHRISTOPHER S. BOND, Missouri HARRY REID, Nevada
GEORGE V. VOINOVICH, Ohio BOB GRAHAM, Florida
MICHAEL D. CRAPO, Idaho JOSEPH I. LIEBERMAN, Connecticut
ROBERT F. BENNETT, Utah BARBARA BOXER, California
KAY BAILEY HUTCHISON, Texas RON WYDEN, Oregon
LINCOLN CHAFEE, Rhode Island
Dave Conover, Staff Director
Tom Sliter, Minority Staff Director
______
Subcommittee on Transportation and Infrastructure
GEORGE V. VOINOVICH, Ohio, Chairman
JOHN W. WARNER, Virginia MAX BAUCUS, Montana
CHRISTOPHER S. BOND, Missouri DANIEL PATRICK MOYNIHAN, New York
JAMES M. INHOFE, Oklahoma HARRY REID, Nevada
CRAIG THOMAS, Wyoming BOB GRAHAM, Florida
LINCOLN CHAFEE, Rhode Island JOSEPH I. LIEBERMAN, Connecticut
(ii)
C O N T E N T S
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Page
AUGUST 8, 2000
OPENING STATEMENT
Voinovich, Hon. George V., U.S. Senator from the State of Ohio... 1
WITNESSES
Collins, Eugene, President of the Board, Portsmouth Inner City
Development Corporation........................................ 29
Prepared statement........................................... 38
Holley, June, President, Appalachian Center for Economic Networks
(ACENET)....................................................... 27
Hollister, Hon. Nancy, Representative, Ohio House of
Representatives................................................ 14
Prepared statement........................................... 41
Lilly, Leslie, President and Chief Executive Officer, Foundation
for Appalachian Ohio........................................... 36
Prepared statement........................................... 43
Merry, Larry, Executive Director, Zanesville-Muskingum County
Port Authority................................................. 25
Neff, Daniel L., Director, Ohio Mid-Eastern Governments
Association.................................................... 33
Prepared statement........................................... 51
Padgett, Joy, Director, Governor's Office of Appalachia, on
behalf of Hon. Bob Taft, Governor, State of Ohio............... 7
Prepared statement........................................... 53
Platt, Richard J., Executive Director, Alliance 2000............. 23
Prepared statement........................................... 55
Proud, Bob, Commissioner, Clermont County, Ohio.................. 16
Prepared statement........................................... 57
White, Jesse L., Jr., Federal Co-Chairman, Appalachian Regional
Commission..................................................... 5
Prepared statement........................................... 70
White, Wayne F., Executive Director, Ohio Appalachian Center for
Higher Education, Shawnee State University..................... 31
Letter, Hidden Valley Ranch.................................. 78
Prepared statement........................................... 75
ADDITIONAL MATERIAL
List, Overview of Ohio Distressed Countries...................... 84
Reports:
Status of Corridors in Ohio.................................. 92
Social and Economic Status of Appalachia......................... 98
Statements:
Hocking College.............................................. 96
McCauley, Roger W., Executive Director, Corporation for Ohio
Appalachian Development (COAD)............................. 79
OVERSIGHT OF THE APPALACHIAN REGIONAL COMMISSION
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TUESDAY, AUGUST 8, 2000
U.S. Senate,
Subcommittee on Transportation and Infrastructure,
Committee on Environment and Public Works,
Nelsonville, Ohio.
The subcommittee met, pursuant to notice, at 9 a.m. at the
Opera House, Nelsonville, OH. Hon. George V. Voinovich
(chairman of the subcommittee) presiding.
Present: Senator Voinovich.
OPENING STATEMENT OF HON. GEORGE V. VOINOVICH,
U.S. SENATOR FROM THE STATE OF OHIO
Senator Voinovich. Good morning. This hearing will come to
order. Very nice to be here in Nelsonville in this wonderful
opera house. I think that people responsible for the
restoration should be given a big hand for the great job that
they've done.
The only drawback here is that I can't see the expressions
on your faces. In Washington, when we have hearings, we don't
have this fancy setting as we have here today.
We're going to conduct this hearing as one that we would
conduct in Washington. It's referred to as a field hearing of
the Environment and Public Works Committee of the U.S. Senate.
One of the real honors that I have is to be the chairman of a
subcommittee of the Environment and Public Works Committee, and
that subcommittee is known as the Transportation and
Infrastructure Subcommittee. That means I have all the roads,
bridges, the General Service Administration, the Army Corps of
Engineers. And, lo and behold, the Appalachian Regional
Commission.
We are what we refer to as the authorizing committee. We
can authorize programs. We can authorize the expenditure of
money. But in Congress, the only way you can really get it is
you have to go to an Appropriations Committee, and they're the
ones that come up with the money. So it's a two-step process.
Many people feel the authorization committee did it and we
got it. Well, that's part of it. You have to get the
appropriators to provide the money, as Jesse knows.
We're very, very fortunate to have the Federal co-chairman
of the Appalachian Regional Commission with us, Jesse White,
who I've known for a long time. Jesse, I think the first time I
met you was when you and my wife Janet were honored at Ohio
University at the Osteopathic College for your contributions to
the region and Janet's to families and children.
I'm really pleased that I have this chairmanship of the
subcommittee because it allows me to focus on some issues that
are very important to Ohio and also to this region of the
United States. You may or may not know this, but the current
authorization for the Appalachian Regional Commission is set to
expire next year and my Senate colleagues and I will be working
to reauthorize ARC during the remainder of this year and in the
next.
I think that's something that we ought not to take for
granted, because I think we all know that--how long was it,
there was an effort to do away with the Appalachian Regional
Commission? Some Members of Congress feel that there shouldn't
be a special program for this part of the country. So what
we're trying to do is to obtain an overview of the importance
of the ARC programs to Appalachia and to closely examine the
progress that's been made with respect to the implementation of
these programs.
In addition, we will look to identify the challenges that
still must be overcome for the region to fully participate in
the Nation's economy so that no one will be left behind. I
think one of the great frustrations that I have and so many of
you have and I certainly had it as Governor, as hard as we
tried, we just--we never could bring that unemployment rate
down in this region of the State. It's affected Ohio. If you
look around this region in the distressed counties, it's the
same thing in Kentucky and some other places.
So today we've brought together an impressive array of
witnesses who are going to testify about the ARC and the ways
the ARC funds can be used to foster local economic and social
development. I really appreciate our witnesses coming this
morning.
In 1965, Congress established the ARC to bring the
Appalachian region of our Nation into the mainstream of
America's economy. The region includes 406 counties. We have 88
counties in Ohio. Four hundred and six counties in 13 States
with a population of about 22 million people. It's composed of
the Governors of the 13 Appalachian States and a Federal
representative who is appointed by the President of the United
States. The Federal representative serves as the Federal co-
chair of the Appalachian Regional Commission. The Governors
elect one of their members to be the other co-chair. All
decisions really are made by the co-chairs working together.
As a unique partnership between the Federal Government and
these 13 States, the ARC runs programs in a wide range of
activities, including highway construction. I think that's
something that most of us are well aware of. It's kind of about
the most single--most important thing I think that we think of.
Education, training, health care, housing, enterprise
development, export promotion, telecommunications, and water
and sewer infrastructure. I might just say, telecommunications
and water and sewer infrastructure have become more and more
important.
All of these activities help achieve the goal of a
viability and self-sustaining goal in the five goals developed
by the ARC in its strategic plan. The first thing is developing
a knowledgeable and skilled population. People are very
important. A knowledgeable, trained workforce. That's what
attracts people. That's what keeps people in an area and
attracts them to come in. Strengthening the region's physical
infrastructure.
We were out this morning to Rocky Boots and their
distribution facility. Without the infrastructure there that
was participated in by ARC and by the State of Ohio and by the
local community, they might not have built that facility there.
They may have gone to some other State. So that was very
important to have the sewers and water.
Then building a local and regional capacity. That's an
economic development capacity that can put a deal together.
Creating a--for creating a dynamic economic base. And, five,
fostering a healthy people. That's real, real important. The
ARC is real proud of the health care improvements that have
been made in this region over the years.
ARC's programs fall into two broad categories. The first is
a 3,025-mile highway corridor to break the region's isolation
created by the mountainous terrain, linking Appalachian
communities to national and international markets. I know about
that as Governor. We could talk highway, highway, highway. Got
to get the highways in, right, Nancy, so we could get our goods
in and get them out. Roughly 80 percent of the Appalachian
Development Highway System is either completed or under
construction. I think we still have about 41 miles, Joy, don't
we, left in Ohio that has to be completed?
The second is an area of development to create a basis for
sustained local economic growth ranging from, as I mentioned,
water to sewer infrastructure, worker training, to business
financing, to community development. These provide communities
with the critical building blocks for future growth and
development.
The sweeping range of options allows Governors and local
officials to tailor the Federal assistance to their individual
needs.
The ARC currently ranks all of the 406 counties in the
Appalachian region, including the 29 counties in Ohio and they
have various levels: distressed, transitional, competitive, and
attainment. I think many of you are familiar with the series of
articles that were in the Columbus Dispatch, and one of the
things that bothered me a little bit about the articles is they
were talking about the ARC as it was, you know, 10 or 12 years
ago and failed to mention the fact that a lot of the, ``pork''
that they complained about is no longer possible because we
have designated that money to those communities that are
considered to be distressed. They get most of the help. We'll
be hearing from some people that are in transitional and
competitive today.
That classification determines the extent of help that's
given by the ARC. I'm not going to get into the details of it,
but it deals with poverty and it deals with the percentage of
per capita and so on. The ARC uses the Federal dollars it
receives to leverage additional State and local funding in
order to undertake a wide variety of projects to help improve
the region's economy and its people. I'm really anxious to hear
more about that today, how the leveraging goes on.
In rough figures, every ARC dollar Ohio received in
resulted in $2 in Federal funds. I'd like to see more
leveraging going on.
In Ohio, the ARC funds support projects in five categories:
skills and knowledge, physical infrastructure, community
capacity, dynamic local economies, and health care. In fiscal
year 1999, ARC provided approximately $4.2 million to fund
projects in Ohio. About 38 percent of the funding is spent
exclusively on projects in Ohio's nine distressed counties. So
that gives you an idea of where the money's going.
Moreover, the ARC announced that last year they spent about
half of its money on programs that included the poorest
communities. This allows communities throughout Ohio and
Appalachia to have tailored programs which help them to respond
to a variety of grass roots needs.
Since 1965, the ARC has had a dramatic effect on improving
lives, helping to cut the region's poverty rate in half,
doubling the percentage of high school graduates, slowing the
region's outmigration and reducing unemployment rates.
Although, I think that we still see too many counties, Jesse,
with very high unemployment rates.
Despite the successes to date, the ARC has not completed
its mission in southeastern Ohio and throughout Appalachia. It
is the type of initiative that the Federal Government should be
encouraging. When I think about the Federal Government, I think
we need to prioritize our dollars and get them into the areas
that need it the most. I believe that government should do for
a group of people what they're unable to do for themselves.
There are areas where help is needed, and that's where we
should on the Federal level be directing our resources. I know
that there's a vast reserve of potential in Appalachia. It's
just waiting to be tapped. I wholeheartedly agree with one of
ARC's guiding principles that the most valuable investment that
we can make in the region is its people.
Today's hearing is the first step toward reauthorization of
ARC. I'm anxious to hear testimony of our witnesses and to hear
their views as to their experience with ARC. I'm especially
interested in hearing from the witnesses especially when they
believe ARC--what they believe ARC should be doing in
cooperation with other Federal and non-Federal agencies to do
the most good for the region's people with limited resources.
You know, it's really important that people like myself get
out. I can read about the ARC until I'm blue in the face, but
it really doesn't have the meaning that it should until you get
out and you hear about the programs and you visit them. That's
what we're trying to do this next day and a half. I've been
very involved, for those of you in the Portsmouth area, in
trying to bring compensation to the civilian victims of the
coal war, those brothers and sisters of ours that worked in the
nuclear energy industry, nuclear power industry that were
exposed to uranium and to plutonium, and so on.
I read about it a lot in newspapers and other articles. But
it really didn't hit me until I went down to Piketon and I
listened to the testimony. It didn't really hit me until they
came to Washington and I heard the testimony from the
individuals that were involved. Because of that, that touched
my heart. We're trying right now to put a program together that
we're going to try to compensate those people without them
having to go through the marginal line to get the help that
they deserve. We owe it to them. But I have to tell you that
without my getting out and spending time with people and
listening to them, that I would never have fully appreciated
what their needs were. So I'm really glad to be here today and
I'm anxious to hear from our witnesses this morning.
Our first panel is going to be Dr. White, who I mentioned
is the Federal co-chair; and then Joy Padgett, who is the
director of the Governor's Office of Appalachia on behalf of
Governor Taft. Joy and I have known each other for a long time,
from the days when she was a member of the Ohio House of
Representatives. She's been to see me in Washington a couple
times and she's, well, excited about her job and enjoys it
very, very much. So we'll start with you, Dr. White, and then
we'll move on to Joy.
If you would honor the policy of this committee, we'd like
you to limit your presentation to 5 minutes. Your written
testimony will be made a part of the record of these hearings.
Once we've completed panel one, we'll have some questions and
then we'll move on to panel two.
So, Dr. White, we're very happy to have you with us today.
STATEMENT OF JESSE WHITE, FEDERAL CO-CHAIRMAN, APPALACHIAN
REGIONAL COMMISSION
Mr. Jesse White. Thank you very much, Mr. Chairman. You
made my task of holding my comments down much easier. I was
going to put in the record sort of the history and main
features of ARC. I think you've done that to about the best
ability that I've ever heard anyone do it. I'm very pleased to
be here in Ohio and thank you for calling this hearing.
You mentioned the difference between authorization and
appropriations. I think it's important to note that when the
Congress did reauthorize us year before last it was the first
time in almost 20 years that the agency had been authorized.
It's made a huge difference to us, being able to have a little
longer planning horizon. So for a long time, it was year-to-
year appropriations language, as was EDA. So it makes a
tremendous difference to us to have that authorization. We
certainly will work with you on the reauthorization issue when
it comes back up.
I'm delighted to be with my colleague, Joy Padgett, my
partner on the commission, and Nancy Hollister, who I haven't
seen in a year or two but with whom we worked so closely, and
our local partners like Bob Proud and our local development
districts here.
As you probably know, every Governor has an alternate who
represents the Governor in his absence. There is an alternate
Federal co-chairman who I would like to introduce and who
appeared before your committee, Ella Rusinko. Ella, if you
would stand? I just swore her in yesterday as the new alternate
Federal co-chairman of the ARC.
Senator Voinovich. Congratulations. I'm very happy to have
you before our committee.
Ms. Rusinko. Thank you, Mr. Chairman.
Mr. Jesse White. I couldn't agree more that getting out
into the region is so important. We had a commission meeting
several years ago in Somerset, Kentucky. Congressman Hal Rogers
hosted us and we took some folks even from the commission
family into some of the tough coal country of eastern Kentucky
to show them what distressed counties were really like.
And when we make this allocation every year to distressed
counties, about four of our States have none. So they step
aside and actually give up some of their, ``allocations to help
the distressed counties.'' I'm going to show you a chart about
that in just a minute. They really came away proud of the
investments that we do make and the targeting that we do make.
You pretty much highlighted the three key elements of the
ARC strategy--what they've always been. One is connectivity.
Our highway program. We brought this chart, Senator, that shows
what the interstate system looked like in 1965 on the top. You
can see gaping holes as the interstates bypassed the mountains.
Then on the chart below, you see the ADHS, the Appalachian
Development Highway System, and the way that was designed some
35 years ago to connect our region basically to the interstate
grid. That has been a very productive investment. We appreciate
the Congress continuing to fund that.
The second one is our area development program where we
work on those other goals of economic development. There are a
number of key elements to that. You'll see those reflected in
the five goals that you mentioned in our strategic plan. They
deal with everything from human resource development to
infrastructure development.
One thing I think that's important to point out, and I
think you will hear from our local partners today, is that even
though the ARC money is relatively small compared to other
Federal agencies, our money is so flexible that it's often the
glue money that puts a project together. I have heard this
hundreds of times in my 6 years as Federal co-chairman.
Traveling the region, it may only be 20 percent of the project,
but we couldn't have made it go without the ARC piece.
That brings me to really the way ARC money was designed
originally. It was meant to be a very flexible extra little
piece of Federal money that poor communities could use to glue
a project together. And it still continues to fulfill that
purpose.
The final feature, of course, is this partnership structure
that you mentioned. In some ways, I think that is as important
as the money, because the ARC engages the State and local
officials in our process in a way that's unique in Washington.
Part of that is the fact that the Federal co-chairman only has
half the votes on the commission. So I have to get the
agreements of the Governors and they have to get my agreement.
So it's really a joint policymaking model. We say it's neither
dictating policy from Washington nor abdicating it to the
States. We have to sit down once a year to come up with an
investment plan and agree on things.
The last 6 years since I've been there, certainly, the ones
I can speak to, we have tried to revitalize the ARC and
modernize it by adopting our new strategic plan, by launching
some regional initiatives. We've had a regional initiative in
telecommunications, export trade, leadership development. We're
now in the third year of an initiative on entrepreneurship
trying to create an entrepreneurial approach to development. I
think for a long time in rural, small town America we've had an
idea that long-term development is bringing a plant in.
Somebody else is creating jobs and we've got to go get them.
That has a place to play.
I think what we've ignored is, what is the real
infrastructure for small business creation and development in
our community. That's what this initiative is working on. We're
very excited about it. A lot of good exciting stuff is going on
here in Ohio in that initiative which we can speak to.
So we're continuing to try to think creatively at the
commission level through our strategic plan, through our
regional initiatives, through targeting our resources to
distressed counties. We spend about half of our non-highway
money on about 10 percent of our people that live in these
distressed counties. I think that's a proud record of targeting
by anybody's definition.
Finally, by fulfilling our mission of advocacy in the
region, one of the mandates in the Appalachian Regional
Development Act is for us to be an advocate. We have rebuilt
our relationship with other Federal agencies. We have
partnerships with the Department of Transportation, HUD, with
USDA, with many other agencies. One of my jobs is to try to get
the big guys with the real money invested in the region. I
think we've come a long way in doing that.
As you know, for 8 years, we were under this severe assault
which you mentioned and it was kind of hard for us to be a
player. But now with the support of President Clinton, with the
support of the Hill, we are able to rebuild those relationships
with the other Federal agencies in Washington and we will
continue to do that.
So let me thank you for having us and let me say that we
will be glad to work with you in any way that we can toward a
good reauthorization of the commission. Thank you.
Senator Voinovich. Thank you.
Joy Padgett.
STATEMENT OF JOY PADGETT, DIRECTOR, GOVERNOR'S OFFICE OF
APPALACHIA, ON BEHALF OF HON. BOB TAFT, GOVERNOR, STATE OF OHIO
Ms. Padgett. Thank you. Good morning, Senator. My name is
Joy Padgett. I'm the director of the Governor's Office of
Appalachia and I also serve as State alternate for Governor Bob
Taft.
I certainly appreciate that you chose Nelsonville to serve
as the site for this particular hearing, because I think it
truly symbolizes the struggling communities in Appalachia that
once were very thriving and bustling centers of transportation
and mining and manufacturing and industry. I believe that there
is a resiliency. You mentioned that as we drove in today to
these communities. What's self-evident about it is that many of
the local residents are beginning to learn that the solutions
for meaningful change have to be initiated locally. I believe
that the ARC is a key partner in making that happen.
In my testimony, what I would like to do is to focus on a
little bit of an overview of the Governor's Office of
Appalachia, the socioeconomic status of this region, and the
cultural uniqueness of this region. Very quickly, the Ohio
General Assembly created the Governor's Office of Appalachia in
1988 and the mission of the GOA is and always has been to
promote opportunities to achieve an improved quality of life in
this area. I'm very proud to have two of the former directors
here who have mentored me throughout this year. They're really
ready to kick me out of the nest. But Nancy and Dan Neff are in
the audience. I don't believe I could have made it through this
first year without them. So I want to thank them particularly.
The Governor's Office of Appalachia is managing the Federal
dollars from the ARC and we also now are managing the State
matching dollars that Governor Taft has put in so that we have
essentially been able to double our budget and then serve as an
advocate for setting some of the policy in conjunction with our
agencies.
As you well know, having been Governor, that the State of
Ohio can only be as strong as each of its counties. Realizing
the validity of that statement, we have begun, as you mentioned
earlier, leveraging additional dollars with the ARC. So we're
looking at a holistic approach in Appalachia now, particularly
with the distressed counties. Each State department has been
asked to work with the GOA as they re-examine the special needs
of the distressed counties as well as the at-risk counties
throughout the Appalachian region. Matching, of course, the
Federal ARC dollars with State dollars.
Actually, 60 percent of those State dollars will be
targeted at either distressed or at-risk counties, which I am
very concerned about. Those six counties that are teetering
there with one additional company closing or another additional
job loss could very quickly jump into the distressed category.
We have added a community development specialist that
serves in the Governor's regional offices and they are working
on communication with the local development districts in order
to provide more technical assistance for building community
capacity, encouraging philanthropic investment, which you will
hear about later with Leslie Lilly speaking, and then
appointing a rural revitalization task force. We have completed
our hearings and are now putting a report together for Governor
Taft to see if there are additional policies that we can look
at to--as you said, to encourage some of the re-energizing of
this particular area, and that report is due in September.
I just cannot stress to you enough the strong relationships
and partnerships that have evolved into what we call a team
approach within the Governor's Office of Appalachia. Because we
do have limited time today, I did provide your office with some
statements that perhaps you can look at, but it talks--it's a
snapshot of the statuses of our distressed counties. Those we
can look at again later and you can refer to.
But over the weekend, I had read a story and I just decided
I needed to tell it, and it was about a wealthy father who
arranged for his son to take a trip to southeastern Ohio
because he had the firm purpose of showing his son how poor
people can be. So that boy spent a day and a night on the farm
of a very, very poor Appalachian family. When he returned back
to the city, the father said to him, ``Well, son, how was that
trip?'' He said, ``It wasn't very good, Dad.'' He said, ``Good.
Did you see how poor people can be?'' The son said, ``Yes.''
He said, ``Well, what will you learn?'' He said, ``Well, I
saw that we have a dog at home and they've got four. We have a
pool that's in our back yard, and they have a creek that
doesn't even have an end, dad. We have these imported lamps in
the garden and they've got all these millions of stars. You
know our patio reaches the front yard and they've got the whole
horizon.'' When the little boy finished speaking, his father
was speechless. His son said, ``Gosh, Dad, thanks for showing
me how poor we are.''
This very theory of Appalachian poor people was obviously
shattered by that boy's story. As director of the Governor's
Office of Appalachia, my personal No. 1 goal is to shatter the
misguided perception that Appalachia as a region cannot thrive
economically. I think if you take a step back in the cultural
history, you'll see that the migration through the Cumberland
Gap and what happened is that people actually did not settle in
towns, but they settled on mountain tops and near streams.
There was not an early-on, structured religion tradition. They
had religion, but not a structure because they didn't build
churches in communities and they didn't have the organized
school systems that create knowledge of institutions.
I believe that we still see some of that lack of
generational knowledge of institution. It still influences
today, because there was a time when coal companies and other
extractive economies structured everything that happened in a
community. Whether it was religion or health care or
educational activities or political. Now we're beginning to see
the citizens, as I said earlier, come to realize decisionmaking
requires their own direct participation.
I can't believe 5 minutes have gone by, so I'm going to
sneak one more. ARC is about hands-on facilitation. Many
communities have difficulty with that 20 percent match often.
We're working very, very creatively with saying where there is
a will, there is a way. The ARC is providing that financial gap
that allows us to leverage all those other sources.
Senator these people really, really do understand your
slogan of doing more with less. If anybody ever does understand
it, they understand it here. Yet these are citizens who work
hard. They play fair and have missed the rewards of that
vibrant economy. Maybe it is because we're extractive.
I would just close by saying that I do have a major
complaint about the ARC and the LDDs, and I think I need to
make that complaint public. That is that they refuse to claim
their bragging rights. They absolutely do. The good stories
haven't been told nearly enough about the positive differences
that have happened in so many places. So I know you're a
baseball fan. I thought I would reach back to Yogi Berra who
said, ``If you did it, it ain't bragging.''
The ARC has done a great amount of good for a great amount
of people over a great amount of time. I think it is just--no,
I know, I don't think, I know it is important that the unique
relationships and the partnerships that have been created be
allowed to continue. I thank you for your time and the
opportunity to tell the story.
Senator Voinovich. Thank you, Joy. I'm sure that during
this next day and a half that you're going to establish your
bragging rights about the ARC.
I want to introduce Ellen Stein. Ellen is the staff
director of my Subcommittee on the Transportation,
Infrastructure and the Public Works Committee. A little story
about Ellen. The former chairman of this committee was John
Warner. You can get a little appreciation of how good I feel to
be chairman of this committee. John's been in the Senate 24
years. He moved from the chairmanship of this subcommittee over
to being chairman of the Armed Services Committee. So he gave
it up.
When I came in, I was trying to find someone who could
carry on the work with the committee. I think he wanted Ellen
to go with him, and we talked about it. I was so pleased when
she decided that she'd stay and be our staff director. She does
a terrific job. She has a very, very big job. She has a lot of
responsibilities and she gets very little help in the
committee. I just want you to know how much I appreciate your
being here today with us, Ellen.
Ms. Stein. Thank you.
Senator Voinovich. I'd like to just ask a couple of
questions. I'm going to try to keep my questions real short
because I want to make sure the panels have an opportunity to
be heard. I'd like both of you to comment on something.
I'm starting to see that maybe more of this is going on
than I suspected. I'm a great believer in together we can do it
and symbiosis. Bob knows coalitions, Children and Family First
initiatives, bringing people together and so forth. There seem
to be a lot of resources here.
I would like you to comment on your observations about
whether or not we are galvanizing all of the resources as
effectively as we can here in this region. I'd be interested in
your comments on how you think that--if we are doing it, how we
can do a better job of doing it. That's one.
The other is that a lot of these counties in the region
just don't have the capacity to get things done. It's great now
that we're going to have an Appalachian foundation that's
created and have the private sector involved so they can put
some money into things. It's called the yeast that raises the
dough. You know, a little here and a little there.
Do we need to develop some expertise in the region that
could kind of move from one area to another, deal makers,
others that can provide that? You know, combine the resources
so that you can have available to these counties the expertise
that counties in other parts of the State of Ohio have because
they're able to afford to hire these people? So those two
questions, I'd be interested in your comment on.
Jesse, why don't you start?
Mr. Jesse White. Well, I think that's very important. I
think that Ohio--when I look at all 13 States--Ohio is blessed
in having an institutional skeleton in Appalachia, OH and a lot
of resources through which I think technical assistance could
be cost-effectively brought. I do think there's a need for more
of it. You've got the three very good local development
districts here. You've got the university with branch campuses.
You've got other colleges.
There is an institutional backbone here through which I
think more effective technical assistance could be given to
communities, because you're right, a lot of communities don't
even have the technical expertise to get in the game. They
really do need technical assistance, whether it's grant
writing, understanding the Federal system. I think that more
technical assistance would be a cost-
effective way to help these communities bootstrap themselves.
Senator Voinovich. I just--I think about the Federal
programs and we've got CDBG--and we now have the money to TANF,
the money from Human Services. We have money that comes from
the employment--unemployment training money. Do you think that
the Federal pots of money are analyzed thoroughly enough to see
how they can be melded together?
I remember way back when I was Lieutenant Governor of Ohio
and Nancy and I served on the intergovernment commission, and
we talked about something called a negotiated investment
strategy that came out of Kettering Institute over in Dayton,
Jim Kundey headed it up. It was very, very interesting and the
whole concept was just to try to get the Federal agencies that
were there that could impact to be at the table and talking to
each other, and then get the local agencies at the table, and
then get the State agencies to see if somehow they could pool
their resources to make things happen. Is anything like that
happening anywhere in Ohio or around the country?
Mr. Jesse White. I'll let Joy speak to Ohio.
Ms. Padgett. I'll speak to Ohio. I think we have set out a
structure that is more than going to happen. We actually have
very good examples. Pooling immediately the Governor's regional
reps to work with the local development districts I think have
made a real major difference in Ohio because we can look at
these things a little more holistically which in my personal
opinion is the way we need to look at this entire region.
Certainly working very closely with Jackie Wonozynski with the
old TANF funds and to do economic development and job training
in those kinds of areas.
I agree with you, and I have--ever since I taught school
and used to coach, used T-E-A-M, Together Everyone Accomplishes
More. I do believe that you need to bring all these folks to
the table. We are able to leverage additional dollars, for
example, from those PRC funds with ARC funds, with some local
funds, in order to do some of the job training and the skill
building that is necessary.
I wanted to touch back on what Dr. White mentioned because
if there's any one thing that I can point out immediately, that
was a result of those four field hearings that we did, was the
need for technological infrastructure. You experienced a little
bit of that down time yourself this morning when you attempted
to use your cell phone and there's just a time there that you
just could not use it. Basically when that happens, you are not
connected.
So if I were to leave you with any one single thing where
we certainly do need a tremendous amount of assistance, not
just with dollars, but I believe that it's not just about
money, but it's about changing policies also; that a tremendous
amount of good could be done in this region. The technical
assistance is great, but if you can only do it in little spots
where--well, we can use technology here, but if you go 20 miles
down the road, you can't use it; you go 20 more miles and then
maybe you can use it.
You can teach everybody all the skills they can possibly
have, but if they don't have the infrastructure in place to be
able to use those skills, companies will locate somewhere else.
The ability to compete is crucial for us to share in these
technology-based industries that are now out there. Being wired
is what it's all about.
Also, I wanted to quickly mention venture capital is
another area. We have developed the Appalachian Development
Fund through a lot of hard work with people in the area. That
is, again, financial resources for people who want to start
businesses, is at a minimum very, very difficult to obtain. If
there's any other one thing that we need to do, it is to
develop pots of venture capital money and other kinds of money
to be able to help people do those home-grown businesses that
we were talking about.
Senator Voinovich. Thank you.
Mr. Jesse White. Can I mention something?
Senator Voinovich. Yes.
Mr. Jesse White. Just in terms of what maybe some other
States are doing, I know Governor Patten in Kentucky has
created a Kentucky Appalachian Commission in essence which does
try at the State level to coordinate the expenditure of funds
in eastern Kentucky. They meet two or three times a year. He
makes all of his cabinet members sit for the whole day, even if
it's Hazzard or someplace that's hard to get to. I heard some
grumbling from some of them one day; but he does focus on
making the State level, which includes flow through some
Federal funds, coordinate in eastern Kentucky.
One thing I've certainly noticed at the Federal level is
that Federal agencies left to their own devices in writing
regulations to implement legislation will overlook rural and
small town America if you're not careful. One of the things
we're constantly fighting is trying to be a voice with the big
Federal agencies, not to forget Appalachia. Write the regs so
that our people will have a chance at this money. We got a
million dollars from H.U.D. for technical assistance in
distressed counties and for housing in Appalachia. So we are
making some progress in trying to marshal and coordinate
Federal resources into the region. It's a constant challenge.
Senator Voinovich. That's an interesting thing. I was
writing it down, that the results act on a Federal level; each
agency has to come up with the results act. We're starting to
get into those and read them. One of the things that's lacking,
frankly, is where they touch other agencies to deal with
problems is not as well coordinated. We're having the Health
and Human Services rewrite. In fact, they're going to have a
separate document on Health and Human Services and the
Department of Education where they deal with children in early
childhood.
They've got programs that are very close together. They
have Head Start and Education has their pre-school. They just
really haven't sat down to see how they touch each other. Maybe
what we ought to do is look at when they are coming up with
their plans for their agencies to look at how they envision
that they would direct those dollars to, say, the Appalachian
region. Make that part of one of their little challenges.
How do we figure out on the national level? The best way to
do it is to get it on the local level and have you guys sit
down and figure it out. It would be nice if that study were
done. Then maybe we could get it in Washington and have them
direct their attention toward doing a better job with the
money.
Ms. Padgett. Senator, although, you know, we're pleased
that H.U.D. is working with us, when I brought that news back
to Ohio, they started asking about the rules and the
regulations that went along with being able to access these
dollars. I believe that that's part of that issue. It's not
just about money. The money is fine, but if the policy is set
that it doesn't fit into our area--and I didn't know this, but
in talking with some of the experts that work with H.U.D., they
said, ``Was that in H.U.D.--speak or was that in English?'' I
guess there's a different language over there that I was not
aware of. Again, it's a matter of policy.
Another area that could truly make such a significance in
all rural areas, not just Appalachia, is the Department of
Health. Because health initiatives need to be different. They
need to be written so that they fit into rural Ohio as opposed
to the urban centers that they so often focus on.
Senator Voinovich. OK. Jesse, the only last thing I'd say
to you is if you've got any suggestions in putting together the
reauthorization on changes in legislation, I'd sure be
interested.
My next two witnesses, the Honorable Nancy Hollister. Most
of you know Nancy. A little inside story that I haven't told
too often is that I asked Nancy--I got to know Nancy through
the State and local government commissions when we were both
Mayors. She was the Mayor of Marietta and I was the Mayor of
Cleveland. I asked her to go out and find somebody that would
go out and head up the Appalachian National Commission. Sounds
to me like Dick Cheney. I said, Nancy, you know something?
You're the best person that could do this job.
So she gave up her job, popular Mayor, Mayor of Marietta,
came to work for the State of Ohio to head up the Appalachian
Regional Commission. For that, I was very grateful. It's such a
good job, I asked her to be my Lieutenant Governor when I ran
the second time. We're happy to have Nancy as the State
representative. So you have lots of perspectives and probably
know this area as well as anybody.
And then Bob Proud, we've worked together for a long time.
Bob's a leader among commissioners in the State of Ohio. I
think we did most of our work with kids; didn't we? Children
and Family First initiative and our local consortiums. You've
got to know that on the Federal level, I haven't given up on
kids. We're trying to get Federal dollars to go into States
where they have formed statewide collaboratives to deal with
the problems of families and children. Then if the States have
a coordinated effort, then money can flow into the counties if
the counties have in place collaboratives. Basically, kind of
using a Federal dollar to encourage local agencies to work
together to pool their resources to make a difference in the
lives of our families and our kids.
We really appreciate all the work that you've done, Bob.
You come from a county where part of it is just booming and
then you have another part that's distressed. We're interested
in having your perspective also. So we'll start off with Nancy.
STATEMENT OF HON. NANCY HOLLISTER, REPRESENTATIVE, OHIO HOUSE
OF REPRESENTATIVES
Ms. Hollister. Good morning, Senator. I appreciate the
introduction and the story. As you stated, I am the State
representative for the 96th district which includes Morgan
County and parts of Athens, Muskingum, and Washington Counties.
Two of those counties, Morgan and Athens, are listed in the
distressed category. I know that everyone here, not only those
who are going to testify this morning, but those who came to
listen and participate, are delighted that you've taken the
time to come to the region to listen to some of our successes
as well as our challenges and our concerns.
As a former Mayor of Marietta and a director of the
Governor's Office of Appalachia and Lieutenant Governor in this
great State, for over 20 years, it has been my pleasure and my
frustration to participate in the ARC process. It's been a
pleasure because ARC truly works from the grass roots up, from
the bottom up, not from the top down. Because local projects
with regional input, local input, and State government support
are what make ARC so successful in the State and in the Nation.
My frustration with the process has been the constant
battle of explaining the benefits and the necessity of ARC to
Members of Congress. Why? Well, this is sort of a personal
point of view, because in watching and being involved for a
long, long time, when the ARC was initiated and created, along
with the War on Poverty in this country in 1965, statements
were made that the ARC would eradicate poverty, would eliminate
poverty. These statements, while very, very noble, in my
opinion, were not realistic.
Those comments were held as a report card some 25 and 30
years later with which, in my opinion, were used to criticize
ARC. Because to me, the geography, the culture, the changing--
constant changing economic conditions will never truly allow
for the elimination of poverty. I think Director Padgett's
story was very well put, because sometimes poverty depends on
your definition of such.
Because in my experience, the true nature of partnership
between the ARC and the Federal and the State and the local
level is one of opportunity. It's the opportunity to make a
difference in the quality of citizens' lives.
Having been in this business for so long, we talk about
results and we talk about economic development. That's a key
word. When there is an interesting analysis that if you have
economic development, you have results. We count heads. How
many jobs did you create on this given day? How many companies
did you bring in? I think we've been trained to do that. I
think that's erroneous.
I think that Dr. White was right on point in his comments
because, to me, economic development is community development.
If your communities are not sustainable from an education
level, from a health care level, from a communications
standpoint, your housing, the quality of your housing is not up
to par. If your infrastructure is not in place, if you do not
have community development, you will not have the overall
economic development.
So I think we need to change our definition and our
perspective of exactly what it is. Because it isn't about
counting heads. It's about a quality of life, a sustainable
economy in a region of the State that was part of the beginning
of the State of Ohio, beginning of the movement westward in
this country.
But I can tell you that ARC is an organization that adapts
to the political, economic, and social changes that occur
throughout the region across the Nation. My job, that I have
been assigned to this morning, is to talk to you about
distressed counties and how some of these things evolved,
because ARC is at a crossroads in their history. There are many
crossroads in ARC, and this is definitely going to be one of
them, about where they are focusing their efforts. Through our
previous administration as well as to the current
administration, we have definitely been involved in the
discussion of allocation of funds to distressed counties.
In 1965, when ARC was created, moneys went to growth
centers, designated growth centers, throughout Ohio as well as
the other 12 States involved in the Appalachian Regional
Commission and because the feeling was get in there, punch it,
make a difference and to generate development to show results,
if you will, as quickly as possible. But in 1981, the growth
center model came into a great deal of question and debate as
ARC faced possible elimination. The commission then identified
and sought to focus on counties that had not shared in the
benefits of the ARC's initial investments.
ARC then proposed to Congress that we establish the
distressed counties program and specifically cited the needs of
clean water and adequate sewers as top priorities.
So the distressed counties program was born and it was
implemented in fiscal year 1983. There was a set-aside of 20
percent of project funds through ARC that must be allocated to
distressed counties. But in the 1990's, one of my biggest
frustrations as a former director was that we were dealing with
10-year-old figures. Distressed counties were identified based
on old information and not changed for 10 years. So many times
it was not appropriate at all. In the 1990's, we changed the
way distressed counties were designated.
There was an adaptability and flexibility that allowed us
to really look and work with these counties to see exactly
where they were and not have everybody in lockstep for 10
years. It was much, much more flexible and I think much more
responsive.
Then in 1994-95, when ARC's support strengthened again--
what they called a worst first strategy was the approach then--
to again, become more focused and more specific. The set-aside
was increased to 30 percent. There was a development of a four-
tier system of categorizing counties, including distressed and
transitional, competitive, and attainment. Those are things
that have already been touched on. There was a restriction
virtually eliminating anyone for attainment counties, and a
great deal of restriction for competitive counties. I had two
of my counties that would be classified as competitive. That in
and of itself has generated some interesting debate and
discussion. Yes.
So this is sort of a history of distressed counties because
I think we are at a crossroads as to where we go from here as
far as a focus of funding. Do we put it in distressed counties?
How do you put it there in allowing these local projects as
you've mentioned in the discussion with Dr. White and Director
Padgett about how you spend this money and what kind of
resources are available? I think these are ongoing discussions.
I've been asked to cover also a number of goal areas, but
I'm not going to do that, because it's for the record. There
are some projects that I know I helped bring to fruition under
those goals. We can discuss those individually. But you're
going to have some really good witnesses coming before you in
the time remaining. So I will allow my testimony to stand for
the record and end my comments. Thank you.
Senator Voinovich. Thank you, Nancy.
Bob, I failed to mention, is also chairman of the Ohio
Valley Regional Development Commission and interested in, I'm
sure, your perspective on how ARC is dealing with that. Again,
coming from a county that's not distressed in one part and
distressed in another, I'd be interested in your perspective.
Glad to have you here with us, Bob.
STATEMENT OF BOB PROUD, COMMISSIONER,
CLERMONT COUNTY
Mr. Proud. Thank you, Senator. As usual, it's good to see
you, too.
Speaking to that, I have to tell a story, too, on Nancy, in
that Nancy when she first became director of GOA said she
didn't believe Clermont County was Appalachia. I said, come on
down. We had a motorhome full of people. We just took her and
told her to buckle up; here we go. We had the developed site. I
remember Nancy shaking her head saying she had never seen
anything like this, these two counties.
Again, my name is Bob Proud. I'm Clermont County
commissioner. I appreciate the opportunity to address you,
Senator, and provide testimony to the rest of the subcommittee.
ADRC is one of the three local development districts
representing southern Ohio which includes 11 ARC eligible and
one EDA eligible member county with a total population of
646,000. That's a 1999 committee estimate. Our district also
includes 6 out of the 10 distressed counties in Ohio. They are
Adams, Gallia, Jackson, Pike, Scioto, and
Vinton. Their combined population in 1999 estimate is 216,311.
In 1995, median annual household income for the whole region
was $27,972. For some of our distressed counties, this figure
is as low as $23,000. A 1995 median household income from Ohio
was $35,202. As a local development district, ADRC plays a
crucial role in developing projects in the region.
What you've heard from the testimony earlier this morning,
is that it is a bottom-up process. As a former county
commissioner, I know you appreciate the fact too that we always
had mandates. I know unfunded mandates is a war cry and one
that we picked up in Clermont County and ADRC as well. To have
a Federal program that is starting at the bottom, priorities
are set by our county caucuses which is made up of local-
elected officials. It's made up of economic development people,
non-profit agencies, and we are the ones that develop what our
priorities are going to be.
Then we take those priorities and then we take them to
what--we have a project review committee within ADRC. Each of
the LDDs have one, too, in which they then rank the projects
from our 11 ARC eligible counties. Then that ranking then is
ratified or adjusted somewhat by the executive committee of the
ARDC. Then what we do is then that is sent up to GOA, working
again with all of the three LDDs in Ohio and also the regional
economic development reps, which we're glad that you instituted
when you were Governor. We're glad that Governor Taft has just
carried on that tradition as well in working with Director
Padgett, and they come up with the Ohio package to ARC.
So, again, it's driven from the local level. I don't know
that many Federal programs that are driven from the local
level. So as a local-elected official, I appreciate that so
much as well.
But I want to talk a little bit about distressed counties
since we have six out of these in Ohio in our district. ARC's
programs granted investments in our district has done so much
to improve the quality of life of our residents, bringing safe
drinking water which is one of Joy Padgett's pet projects, too,
eliminating groundwater pollution.
ARC investments in Pike County have enabled over 50 miles
of water lines to be sent to local residents who had no access
to safe drinking water. The story is the same as in Adams and
Vinton County to receive water who didn't have it previously.
ARC grant funds to wastewater treatment systems that can have
serious groundwater impact as well.
But summarizing overall figures for our distressed counties
in our region, in the last 4 years, 1996-99. During that
period, ARC grants to ADRC distressed counties amounted to
$5,476,992 for water and sewer infrastructure improvements. The
key thing is that those moneys leveraged over $27,692 for these
projects. Again, we talked about the leveraging as well.
There's a lot of other stories that earn the testimony of
projects we have, but one thing I really want to talk about is
our economic development problem. The ADRC region is going to
be further exacerbated by the recent announcement by USEF that
they will close the Piketon Uranium Enrichment Plant in June
2001. I appreciate your efforts in trying to get them to
reconsider and go back to the original commitment of what they
said. But, again, that's going to terminate about 1,500 highly-
skilled jobs.
We talked about transitional counties and competitive. Of
course, coming from one competitive county, Clermont, to
recognizing that we are more than willing to only have 30
percent funding, because that's fair. We would like to see more
of the moneys going to distressed counties.
Again, you know, when I used to work for a senior service
organization, our goal and our theme was helping people help
themselves. That's exactly what ARC does. They give us the
tools. They help us help ourselves. So as Churchill said, give
us the tools and we'll finish the job. That's exactly what we
want as well.
We have one of the things in Clermont County that we
received moneys from 1996 from ARC for our Career Center, our
video conferencing center and video lab. We have done some
wonderful things with that, too. We had an interactive video
conference with Jess and Congressman Portman when they were in
Washington and we had some students from vocational schools
throughout the region testifying to them on the effectiveness
of ARC funds while they were in Bethel, OH, in Clermont County.
ADRC has used that with video conferencing with three other LDD
sites with Northern Ireland. We have U.S. Precision Lens, one
of our major employers in the county, who they interviewed
prospective employees worldwide. So that saves them as well.
But, again, as Nancy has said, my testimony is going to be
part of the record, too, but I just want to thank you for
coming out here and actually seeing. Because one thing as you
know as a local elected official, too, is that many times we
have to get out of the beltway and actually to come out of the
ivy tower--to come out of that and see what actually is going
on.
Again, you can get reports. You can read newspaper articles
and everything. Until you actually get out here and see and
talk to the people who are on the front lines, how ARC is
effective. One suggestion I would have--I'm not going to make a
criticism--suggestion on access roads funds is that when you
get access roads funds, you have to adhere to the Federal
highway standards. If you are building an industrial access
road in Appalachia, you don't need 6-foot shoulders. That's one
thing that--one reason a lot of counties do not access, take
advantage of access road funds, because of the fact that they
can't afford them because it escalates the cost of the project
so much.
In closing, we are having--this is a commercial. September
17th, 18th, and 19th, we are having in Clermont County--hosting
ARC entrepreneurial conference at our hall in Eastgate. We've
had some heavy hitters coming for that. It's going to be an
excellent conference. I'm going to personally give you a
brochure and ask you to feel free to stop in and see us on that
one, because it's going to be excellent, too. Again, that is
something that is a wave of the future and something that we
support wholeheartedly.
On behalf of the ADRC, I want to thank you Senator for
coming out. It's always a pleasure.
Senator Voinovich. Good to see you, Bob. Thank you very
much.
Mr. Jesse White. Can I make one comment?
Senator Voinovich. You certainly can.
Mr. Jesse White. Just to talk about this, this map shows
side by side the distressed counties by current definition as
they existed in 1960 and then the current.
Senator Voinovich. Can everybody see that? It shows the
distressed.
Mr. Jesse White. The red is distressed. So it shows the
progress we've made and what we still have to do.
Senator Voinovich. Just thinking, in the reorganization
language, are the categories--the distressed categories written
in the language or is that something that you folks did in the
ARC itself?
Mr. Jesse White. Well, the commission had adopted those
policies, but the Congress actually wrote them into our
statute. So they are statutory.
Senator Voinovich. So that some of the limitations on what
you can do with money, you're going to be reviewing that and
getting back to me on any changes that you think----
Mr. Jesse White. Right.
Senator Voinovich. I'd really like to know what the
commission thinks about, and then I think it would be good from
my perspective, Joy, if you would get your team here and get
them in the room and look over the language to see if there are
some changes that we could make, maybe get more flexibility.
We'll be having some hearings on that in Washington. I think
you could get started on that right now and get a better feel
for it.
Ms. Padgett. The category that does not appear in the
language is the at-risk category which I use. It falls between
distressed and transitional. But I do believe it's a very
critical other category that we need to look at to know that
many of these categories are bumping down toward distressed
rather than moving up toward transitional.
Senator Voinovich. It's the emergency money that you need.
Sometimes we can provide it. I know that when we were asked
here for $75,000 for one of our areas where we got some real
problems--that might have some pop there that you could direct
and be a way of moving in quickly where help is needed. I know
that we need to deal with some of the lost jobs we have, for
example, at the Meigs mine situation. Too often, I don't think
we can respond quick enough to some of the real at-risk
situations that we have.
I notice that you've used some of the ARC money on water.
Is that for sewer, waste treatment, and also on water supply?
Mr. Proud. Yes, sir.
Senator Voinovich. Are these mandates that are coming out
of the EPA and the local community doesn't have the resources
to deal with them and, therefore, you're having to access the
ARC money?
Mr. Proud. Not every one of them, but a great majority of
them are as a result of EPA funds.
Senator Voinovich. So it's not an issue of putting in the
waste treatment or the water system for economic development,
but more in response to something that you've got to do under a
Federal mandate?
Mr. Proud. It covers, again, both categories. A lot of the
areas have wells and then your groundwater might have
contamination into it, too. So they had to have a more safe
drinking water source, too. But, again, some of it also is
because of the economic development and a plant or company is
going to need to have water and wastewater, too.
Senator Voinovich. I'd be interested in how that's broken
down. One of the things that I'm starting to pick up as I
travel the State is that we're on the edge of some really
draconian things happening to a lot of communities being fined
for past pollution of water. I was in one community last week
and they said it's going to cost $26,000 per resident to pay
the fine. Let alone get the money to do what they're being
mandated to do.
I'd be real interested in that, because those are resources
that you're putting them, into waste treatment into water,
which are very important, of course, fundamentals, but it does
mean that those dollars are not available for some other
purpose. It would be interesting to get a breakdown of--do you
have that, Jess? A breakdown by category of how all the money's
going out nationally in the ARC? I'm not sure how much for
waste treatment facility, how much for water treatment, just
public water supply, safe drinking water?
Mr. Jesse White. We do have the figures broken down between
sanitary sewer systems and drinking water. I don't know whether
we have the figures about which ones are EPA compliance issues
versus just, you know, more basic infrastructure.
Tom, do you know whether we have that?
Mr. Jesse White. We could probably tabulate that for you.
Senator Voinovich. That would be interesting to find out
where the dollars are going by category.
Any thoughts either one of you have on how maybe we could
do a better job of coordinating resources to make a bigger--
getting a bigger bang for our buck and also the need for
expertise? For instance, you've got the entrepreneurship
conference and people will be coming in. Should the ARC be
looking at perhaps bringing in more staff people that would
be--or creating a source of revenue where they could go out and
spend time providing entrepreneurial training in the eligible
counties?
Ms. Hollister. I think even in listening to the
infrastructure comments, because I think it goes back to
infrastructure at the same time that you look at
entrepreneurship. Because if you don't have the infrastructure
in place, you won't have the entrepreneurship. And I think
right now I know from Director Padgett or even from Dr. White's
perspective as well as the local officials that are here, they
can show you areas in their county that either have severe
contamination problems or no infrastructure at all.
I think that one of the things that could possibly be
considered is a concept--and also a debatable point about land
use planning at the local level, with townships and counties,
and talking about where do we want this water and sewer to go?
Where do we want some of these wireless or wired efforts with
telecommunications to go? Where can we upgrade highways? Where
should we have housing?
I think that some of the distressed counties especially
could use the targeted assistance to help them have these
countywide discussions and debates about where they want to go.
Because if they have a plan, then they can make better use of
the resources.
Then to partner with that, it has been a source of my
frustration in dealing with USEPA that the State of Ohio
receives an enormous amount of money in a revolving loan fund,
and it's a low interest loan fund. I think you've probably
heard me say this before. There's an echo in this room. But
there are many of our distressed counties that won't play. They
won't participate in the loan fund because the regulations are
strangulation and they can't afford to pay it back.
So, one of the things even at the Federal level in looking
at this and having ARC as a player, to even have a set-aside or
an earmark, whatever, to say that for distressed counties there
would be a portion that if you participated through ARC in the
EPA loan fund that you also got an equal grant amount--
something there to allow them to move forward I think a little
more proactively. But I think it goes back to combining
resources for communitywide discussions in every county and
maybe putting forward some funding to say this is what we want
to look like in 2 or 3 or 5 years.
Senator Voinovich. You mean a facilitator to kind of help?
Ms. Hollister. Yes, but that takes some funding.
Senator Voinovich. Get everybody together and lay out a 5-
year plan, what their provision is.
Ms. Hollister. That's tough to do because we have counties
that don't want to do it.
Mr. Jesse White. Last week, we were in the process of
doing this comprehensive look at our distressed counties. Last
week we had a field meeting in one of the two distressed
counties in Pennsylvania. We heard a very moving story from
Schuylkill County, which is a county that had communities on
either side of the ridge who never worked together, and they
went through a strategic planning process that really pulled
the county together. That county's going to make it.
But it was through sort of, ``soft investments'' developing
the city infrastructure of that community, pulling them
together, working with the newspaper, working with the private
sector, and developing the vision. That's what a lot of our
distressed counties need, I think, is really pulling themselves
together and developing the vision and moving forward.
Mr. Proud. Senator, you talked about having somebody to
facilitate meetings. That's one thing that we do in our local
development districts. With ADRC, we have contracts with
counties to help them develop land use plans and because they
didn't have the expertise in-house. So they went to ADRC, CDBG.
Some of them don't have staff to administer all of the
bureaucratic red tape that's entailed with that.
So that's something that the LDD's are available to do, as
well as to go in there and to assist. Not telling them what to
do, but we go into the counties and into the townships and the
villages and say, we are here to help you. You tell us what you
want.
Senator Voinovich. What are these, the countywide LDCs?
Mr. Proud. The local development district covers all 11 of
our counties, but we can go into any county that invites us.
Senator Voinovich. So you do have that expertise to help
someone?
Mr. Proud. Yes.
Senator Voinovich. One of the things that Ellen pointed
out is that I introduced a bill reauthorizing the State
developing loan fund. We do have specific language in there
dealing with disadvantaged communities, to give them a break.
One of the things that really needs to get across to everyone
is the unmet needs that we have in this country today. We're
celebrating the big surplus. The fact is that last year was the
first year we had--and we really have not had a surplus,
because the surplus initially was Social Security surplus. And
last year we lockboxed that.
But the fact is that we still have, ``surpluses'' because
we have more money coming in from payroll tax from Medicare
that's not going on. So that's money that's extra. They quote
that as they consider that to be surplus. So there really isn't
a quote on budget surplus to surplus. There's trust funds and
Social Security.
Now, we may have one based on some new provisions this
year, but not a whole lot. If you look at that and you look at
the unmet needs--I was in Cincinnati with the Mill Creek water
district, water shed. I was presented with a national estimate
of the unmet needs for O&M and for operations for sewer and
water and just safe drinking water. In 20 years, we're talking
about $2 trillion. So you understand what $2 trillion is, our
budget this year in the Federal Government is $1.7 trillion.
That's the whole budget. We're talking two trillion in that
area.
And then, part of my responsibility as chairman of the
subcommittee is the Water Resource Development Act, the word of
that legislation. We have $39 million worth of unmet needs.
These are projects that have been authorized, that the money
has been either spent on literally construction or design. We
only appropriate each year in the energy and water
appropriations $1.3 billion.
We just have this stuff stacking up out there and nobody's
kind of even paying attention. It doesn't count, and it seems
to me that in any responsible organization you would look at
these unmet needs that are out there where the Federal
Government does have a role to play, and say, ``How can you be
talking about new programs and some other ideas when you've got
these things that need to be taken care of?'' So I think that
in the process of--we need to put in and we did that in the
Safe Drinking Water Act, put in some special language for
disadvantaged communities.
Mr. Proud. Senator, you know, talking about many areas,
small communities will get water lines extended to them but
still have onsite systems. Therefore, they use more water now.
They take showers a little bit longer. Therefore, the onsite
systems start malfunctioning and cause a problem as well. Then
the health department comes in and things like that.
There could be some way, again, that we could--where you
put in that almost--have that highly recommended that also they
would have wastewater. I know it might be difficult to do, but
I know just in Clermont itself that has caused so many problems
when a rural water company comes in and extends lines but
there's no sewer available. Sometimes it exacerbates the
problem.
Senator Voinovich. Well, and some of that stuff you guys at
the county level have to do.
Mr. Proud. Give us the tools, and we will.
Senator Voinovich. That's a good suggestion.
I'm not going to ask any more questions, but I really would
be interested in--we've got these priorities of where we can
spend money, and I'd be real interested in getting your
thoughts written down on--you know, there's water. One of the
things that I remember most from dealing with Lake and Meigs
County, they just wanted that. They needed an industrial park,
but they couldn't have an industrial park without having the
infrastructure in place. They needed the roads and they needed
the water. How do you get the money in there to do it?
It's the same thing when I was out at Rocky Boots this
morning. If they hadn't had the money to put in the water lines
or the roads, they may have gone somewhere else. I think that's
something that we need to talk about maybe on the Federal
level, but also on the State level in terms of, you know,
things that the State should be looking at as to helping in
terms of economic development.
I want to thank you very much for being here today, and
keep working.
Our next panel is made up of Rick Platt, Larry Merry, June
Holley, Eugene Collins, Mr. Wayne White, Dan Neff, and Leslie
Lilly.
I want to thank you very much for being here today. Since
there are so many of you, I'm going to do what I do in
Washington sometimes. And when that red light comes on, we'll
have to call your testimony. Again, I want to emphasize that
your written statements will be made part of our record, so
it's available to the staff of the committee.
I have no idea how you were chosen who was to speak first
or last, but the first person that I have on my list here is
Rick Platt, and I would ask that as you begin your testimony,
if you could just give us just a couple of sentences about what
your organization does so we could get a feel for that, unless
your testimony goes into that part of it, OK? So I have a
better idea and the folks that are here have a better idea of
what it is that you're doing.
Rick, I have a pretty good idea of what you do. You're over
in Steubenville and Jefferson County, executive director of
Alliance 2000, which I think is an economic development arm of
the county. We're glad to have you here. Rick has worked with
us and went over to Jefferson County. So we'll start with you.
STATEMENT OF RICK PLATT, EXECUTIVE DIRECTOR, ALLIANCE 2000
Mr. Platt. Senator, I'll join with everybody in thanking
you for coming here today and giving us a chance to talk about
what's happening in Appalachia and in Ohio. I'm going to be
very brief. First off, let me tell a story.
In 1997, one of our existing companies, a distribution firm
with about 100 employees, came to us and said they had to
expand, which is a good thing. They had run out of space where
they are, could not expand their building, needed to have a new
site, new building. They came to us. We showed their CEO our
industrial park or what we called our industrial park, but it
didn't have water and sewer and the roads weren't widened. It
was really just an open field. He also went to West Virginia
and saw what they called their industrial park. He located in
West Virginia, left our county and took those hundred jobs
away.
It's not sour grapes that I tell that story, because
ironically the West Virginia industrial park had ARC funds to
get it ready. When he went to see their park, he saw water. He
saw sewer. He saw roads that were ready to go.
The story to finish--the end of the story is today, though,
we are ready with ARC funds funding, attracting, leveraging
more funds. Today we have an industrial park with the water
capacity, the sewer capacity, three phase power, 35 minutes
from Pittsburgh International Airport.
This is a map that I brought up, and it shows several dots
on that map. One of those dots is our industrial park looking
at the micro level, looking at what we needed to do--water,
sewer, roads--to get our park ready. But eastern Ohio has
several industrial parks, the purple dots on this map. The
counties that are on a corridor between Columbus and Pittsburgh
are industrial parks that in the last 10 years have been funded
with ARC funds.
Senator Voinovich. So people can get an idea, why don't you
just quickly go over them so they get a sense of what you're
talking about.
Mr. Platt. We have our Jefferson County industrial park
outside of Steubenville. Cadiz, Newcomerstown, Coshocton is
working on one right now. Guernsey County has several.
Zanesville has one that's been very successful. We'll hear from
them. Those are the counties that are in eastern Ohio that have
industrial parks, so dots on the map.
What we're saying here, though, is let's take a macro
picture. We need to connect these dots. It's not about pork.
Connecting the dots is something that we need to do. Five key
projects really will connect the dots--these industrial parks
in eastern Ohio. We have this 12 miles between Coshocton and
Dresden that's two-lane right now that really connects the
western part of this Columbus/Pittsburgh corridor with I-77. We
have 28 miles from Newcomerstown to Cadiz. Right now there's
nothing there. We need to connect to finish the eastern leg all
the way to Pittsburgh and Pittsburgh International Airport.
Those two highway projects alone give eastern Ohio access to
direct flights to Europe out of Pittsburgh.
Senator Voinovich. How much of that area is in ARC?
Mr. Platt. All of the yellow counties that I show on here,
there are 12 counties shown, 10 of them are Appalachian
counties.
Senator Voinovich. Any of those roads on the grid, they're
new ones?
Mr. Platt. No. None of them are on the grid. We mentioned
the 41 miles. Those are not part of the 41 miles.
Senator Voinovich. So that's probably something that they
are seeking to do?
Mr. Platt. I think ARC funds give us the opportunity to use
the leverage to get started on these projects so that we can
see them, sometime in our lifetime, get done. They're
essential. They connect the dots. They give us access to things
that we just don't have right now. When we talk to companies at
our industrial park, we can't talk about anything west of us
because you can't get there.
They say when Jimmy Carter's motorcade came to Steubenville
in 1979, you couldn't get from Steubenville to there. The
motorcade got lost in Weirton. But with Route 22 being
completed through Jefferson County, now we can get to
Pittsburgh.
Our unemployment rate is low because people are now
commuting into Pittsburgh to find work. I think that with these
highway improvements, we can stretch that further into parts of
Appalachia, connect the true corridor between Columbus and
Pittsburgh. We also show two key railroad projects that are
part of the project. No. 1, from Newcomerstown down to
Cambridge, to kind of reconnect some railroads that have been
disconnected over the last few years and open all of really
that southern part of Appalachia into the railroad again. It is
still very viable. Then at the other end, off the Panhandle
Rail line again, a small connection into the Warrenton River
Terminal to give really Columbus one of the first connections
to the Ohio River, many companies along this corridor the
ability to get their product either off or on the Ohio River
and everything with that, and then last, then, improving that
river port at Warrenton to give greater capabilities.
So, again, my perspective is on the micro level, but we
also have these projects connecting the dots. I think the key
thing is--and it's been said by others, there's unfinished
business in Appalachian Ohio. When you're talking about the
reauthorization of ARC, clearly there's more work to be done by
ARC. ARC work is not done in Appalachian Ohio.
Senator Voinovich. That puts it together. It's interesting
that I, once in a while, am in Pennsylvania and the Governor of
Pennsylvania continues to complain that businesses in western
Pennsylvania are moving to Ohio. I think that the Workers' Comp
system that we reformed, people don't really pay attention to
it, but it was called a silent killer of jobs at one time.
Today it's one of the best systems in the country. Now people
are wanting to come to Ohio because of what we're doing in that
area. So thank you very much.
Our next witness is Larry Merry. He's the executive
director of the Zanesville Muskingum County Port Authority.
Good to have you here.
STATEMENT OF LARRY MERRY, EXECUTIVE DIRECTOR, ZANESVILLE-
MUSKINGUM COUNTY PORT AUTHORITY
Mr. Merry. Thank you, Senator.
Also, I want to thank you for your interest in working with
the ARC. I know what you did for the Office of Development when
you were Governor. If you can help ARC, that's going to be a
great step.
I'm going to touch a little bit on the past and Muskingum
County and my written testimony touches on that. We're a county
that's in a lot of transition and we're growing. A lot of that
has been because, basically, to go back to the baseball
analogy, we've built the ballpark. And when you go to the field
of dreams, build it and they will come. The problem that many
counties have in Appalachia is that they're not able to build
it because you can't get them to come unless you have the
ballpark already built.
In Muskingum County, in 1992, when I became county
commissioner, we had basically half of an industrial park is
what I'd like to call it. We used some ARC funds, some CDBG
funds, built an access road through it and been able to expand
and bring projects to it. That isn't on Rick's map, but we do
need to put on another purple dot. We also were able to develop
our airport park and have several projects there and extension.
ARC helped with the extension of a water line--a project that I
think you're very well aware of that our county was successful
in recruiting was the Auto Zone distribution center. I'm very
pleased to tell you that they're close to 600 employees now----
Senator Voinovich. No kidding?
Mr. Merry [continuing]. At that facility. Yes. It's been a
real success story. ARC money was involved in helping to place
that infrastructure, a very expensive venture.
Our county has been very committed and the commissioners
continue to spend vast local dollars. But those local dollars
can only be stretched so far. ARC's been a big player in that.
We now have the third industrial park that is currently under
construction that you will be very pleased is using some
reclaimed strip mine land to put it to work in a different form
than what it is today. I guess my plea is that there's a lot of
communities that do not have that ability, that do not have the
locations, and many of them surround Muskingum County. Morgan
County still has a double-digit unemployment rate that they
have not been able to enjoy some of the things. They're very
dependent upon a lot of counties, Muskingum County, for a place
to work.
ARC--if there was a change in ARC, I would like to empower
them. When we do ARC, we end up working with other agencies
which are great, and we work with those agencies to receive
some funding, but the complication that it adds in working
directly. ARC makes local decisions by local people who are led
by organizations that Muskingum County works with, Omega, and
through Omega. I would rather see that be direct and I would
rather see the money go directly and flow through there because
they understand the local history, the local people, and the
local needs. With it being driven--I know that's a change. I
still think that there can be a sistering or a brothering of
the agencies, but I think it's the complication and then it
gets scary.
There's three people that work at the port authority. Many
counties in Appalachia have part-time economic development
people. To start talking about doing several applications or
different things and then if you apply for ARC and then you go
to CDBG and go through that bureaucracy, many people--this is
not a negative toward it, but they don't understand Appalachia
when you start dealing with those other agencies. They don't
know what it's like in Appalachia. They just assume that you've
got a 10 person staff or something that's working in these
counties. Many times, you don't.
Senator Voinovich. I don't understand. You say Omega. You
have to go through Omega to get your----
Mr. Merry. That's the local.
Senator Voinovich. What is Omega? What is it, an A-95
group?
Mr. Merry. We do that. We are also a sister agency with the
Ohio Valley development commission. There's three LDD's in
Ohio. The third one is the Buckeye Hills, Buckeye Valley
Commission in Marietta.
Senator Voinovich. You're saying the ARC money have to go
through Omega before the counties gets it?
Mr. Merry. I think that if that works, if the money could
come through to those local agencies and be hand--basically
work together, they could understand and work closely with them
instead of working through the complicated system. That is
giving ARC totally--it's changing it an awful lot, but it also
gives them the responsibility and that ability to work through
that agency.
I guess I want to close with the fact that our unemployment
rate in Muskingum County is 5.6 percent. I think it's the
lowest it's been in many, many years. But there are still a
tremendous amount of unemployed people. We have a lot of youth
in Appalachia and a lot of that youth continues to move out and
move away. That's OK if that's a choice they want to make, but
many times it's a choice that they have to make.
Appalachian Regional Commission's job is not done. We need
to continue that effort to be able to work to allow things to
grow. I guess more than anything people in Appalachia have a
spirit and it's a spirit to continue and to continue to work to
improve, and not to quit and leave. ARC needs to help that
develop and to continue to let that spirit grow and flourish
here. Thank you, Senator.
Senator Voinovich. Thank you very much.
We'll now hear from June Holley. June is president of the
Appalachian Center for Economic Networks, ACE Net.
STATEMENT OF JUNE HOLLEY, PRESIDENT, APPALACHIAN CENTER FOR
ECONOMIC NETWORKS (ACENET)
Ms. Holley. Right. I'd like to give you some of the
testimony that evidently got lost on the way to Washington.
I'd like to start giving just a little background
information about ACE Net. We're an economic development
organization that works with many other organizations to create
a strong regional economy. Our strategy is kind of unique in
that we focus just on two sectors--specialty food processing
and technology--and try to mobilize as many resources in each
of those sectors as we can. We've been working on the food
sector for 5 years.
Really, working with these partners, we've just assembled
an incredible array of resources so that anybody with an idea
for a food business can get the help they need to get started
and then really grow rapidly. So the results, just to give us
an idea, we had only five or six small food processing
businesses 5 years ago when we started, and now we've worked in
some way or another 175 in the Appalachian Ohio region. Many of
them are startup. So we're getting this culture of
entrepreneurship that a lot of us have been talking about. Now
we really have these excellent entrepreneurs who are really
capable of creating what we call $1 to $5 million businesses in
the next couple of years.
Senator Voinovich. What do they do?
Ms. Holley. They're food processors. We have businesses
that make pasta. We have six salsa businesses. We have people
that are getting into ``nutriceuticals,'' just food
supplements. Many of them are very high value food businesses,
not just commodity kinds of businesses. They're making really
state-of-the-art products that are very valued on the market
and many of them are unique and innovative. We have this goal
creating 50 $1 to $5 million businesses which would create
1,500 quality jobs in the area. So this is an idea of extreme
focus on a sector.
ARC has been incredibly important in this. First, we talked
about a one to two leveraging ratio. These projects have all--
these funds have leveraged many times more than that. We have a
kitchen incubator. It's a licensed processing facility where
you can rent the use of ovens or an automated bottling line to
start your business without a huge capital expenditure. So lots
of businesses come and get started there and then we help them
move to their own facility. The dollars invested by ARC
leveraged from the local banks and the Ohio Department of
Development eight times a month that ARC invested.
Then other ARC funds helped us sort of ratchet up the
resources we could give these businesses. So we developed these
food sciences resources. Five thousand dollars from ARC
leveraged twenty-five thousand dollars in expert consultants'
advice that the businesses can access. So they have really
quality products and they can get into regional, national, and
international markets. So now we're working to even double that
amount. So it will begin----
Senator Voinovich. Where are you located?
Ms. Holley. We're in Athens, but we work with businesses
throughout Appalachian Ohio. So we've worked with businesses in
Zanesville and even out toward Pike County.
Then--so that's the food sector. Now we're starting to work
on the technology center with the Voinovich Center at O.U. and
a lot of the other partners, Hocking College Innovation Center.
But our first step in that area was this issue that you talked
about really needing a work force. So we are setting up in the
high schools a youth computer entrepreneurship program. It's a
year-long program. Young people learn e-commerce skills so they
can make really good e-commerce sites. Then they actually set
up businesses and they start earning money right away part-time
to supplement their family income.
What we find out is that then they go on to college. These
are kids who weren't going to go to college. They start going
to college. Many of them keep this entrepreneurship. Some of
them are starting to get really good jobs back in the area. We
think that's really important that it's not just work force
training, but sort of an entrepreneurial slant. So they can at
any time go out and start their own business or work in some of
the expanding businesses. But ARC money is kind of seed money
to help us try that out.
We've now leveraged that 20 times over with money from the
Department of Education. We're going in seven schools this fall
and probably the same amount next fall.
So, you know, ARC is really making a difference through
these programs. I think there are three concerns that we have,
and the first is simply dollars. I just got in the mail last
night the Journal of Appalachian Studies, and it said that ARC
region only gets 28 percent per capita of the public investment
of the rest of the country. Only 28 percent. So no wonder we
still have--you know, we have not only huge problems, but we
are getting less public dollars than other parts of the
country. I think that to have this entrepreneurial economy is
going to require some public investment to get things to
catalog.
Senator Voinovich. What are you talking about, 28 percent
of public investment? What do you mean?
Ms. Holley. I can send you the article. I just glanced at
it.
Senator Voinovich. What is that?
Ms. Holley. I'm not exactly sure how they defined it in
that. I just glanced at that and then it popped into my head
this morning when I was thinking about this talk. I'll be glad
to fax you that article. It was shocking to me to realize that
there's that little per capita coming into the area.
I think also another issue is that especially with some of
these entrepreneurial projects, ARC has been sort of like
seeding the field and just giving 1-year grants to a lot of
programs. I think that we need to learn from what's been
happening out there and identify those projects that are
successful and do some multiyear funding. Because there are
projects, there's a lot of mistakes you have to make. You have
to figure things out. Then that's a longer term process. So
having more multiyear funding I think is going to be really
important.
The third area which is already starting to happen somewhat
is to be able to get a continual improvement system among these
projects. They need to be linked up and networked so that we
can be sharing among projects what we're--you know, funded
projects, what we're learning, and find out what really works
in this region. I know the office has supported a loose effort
called the Appalachian Support Network. They helped us set up a
youth entrepreneurship program that the Voinovich Center co-
sponsored. It was a great opportunity for the people in the
region.
They're also going to be helping with just a small amount
of money so that we can bring in some national founders who are
really for the most part ignoring Appalachia, period, as well
as Appalachian Ohio, and help them find out about the need here
so that we can bring in some more private dollars into the
area.
Senator Voinovich. Thank you. Thank you very much.
We also have with us today Mr. Eugene Collins who's
president of the board of Portsmouth Inner-City Development
Corporation. Mr. Collins, we're very happy to have you here and
we look forward to your testimony.
STATEMENT OF EUGENE COLLINS, PRESIDENT OF THE BOARD, PORTSMOUTH
INNER CITY DEVELOPMENT CORPORATION
Mr. Collins. Thank you, Senator. First of all, I can say
it's indeed an honor and a pleasure to be sitting here and
testifying in front of the U.S. Senator and also ex-Governor
Voinovich who played a very important role in Portsmouth Inner-
City Development Corporation.
A story with Nancy that everybody seems to be telling, we
have about--we had a million dollar project on a housing
project, and we had a link of about $50,000 short. We contacted
Nancy's office at the time and discussed this with her because
the project was being held up by that. Nancy was able to give
us the technical assistance of how we could go about getting
some ARC discretionary fund money to deal with that project. I
sit here proud to say that we now have senior citizens in 25
apartments that was done by Nancy's giving us the proper
guidance on how to go about doing it. Otherwise, that project
would have been hung up.
There's no question about ARC. ARC is definitely a
necessity in the Appalachian area. The thing that I'm here to
talk about mainly, though, today is that we have a special
project that deals with youth entrepreneurs. The reason why I
think that it is very, very important that this project
continues, first of all, in the Appalachian region area, for
whatever the reason is, a lot of people in many key positions
don't feel that any blacks live south of Columbus. I sit here
to tell you that there are blacks that live south of Columbus.
Everybody seems to think that the only blacks are in urban
cities. There are blacks that are living in Appalachian Ohio,
and we're proud to say that we're part of Appalachia. And we
intend and will continue to live in Appalachia.
Because of that, we started a project for the youth
entrepreneurs. This project is focused on minorities and
females, but we don't turn away anybody who's interested in
going into business. What we're saying to these young future
entrepreneurs, that there are goals and objectives in life, and
you can set your goals and objectives. If your goal is to be a
business person, you should not let anything interfere with you
not reaching those goals. So we feel very strongly that this
can happen.
One of the things that we have been able to look at and we
think that it's very important that even from Washington back
to look at this, and that is everybody is saying that now it's
time to stop the welfare role. That sounds good and that's
great, but the bottom line is that a lot of these young people
are caught up into a system of many generations of welfare. It
makes it very difficult for them to be able to leave this
mechanism until such time that they get the proper training and
understand that there is another way that they can go. This is
one way that we think the youth entrepreneurship training
program can work out for them. It will give them an opportunity
to see how they can fit in somewhere else.
In the midst of doing this, we have brought in presenters
to come in and give presentations to them, how they can take a
small plan of action and make it a future for them. Many of the
young people are going to be looking at this. One of the things
that we measured out was that in Ohio we found that if a youth
is incarcerated, it costs between $25 to $32 thousand a year.
And we're dealing with over 100 youths throughout special areas
in the Appalachian region, such as Portsmouth, Gallipolis,
Chillicothe, Hillsboro. Those are the areas that we're working
very closely with, and we have over 100 kids that are involved
in this. We have also put together computer labs because we
think it's very important that every young person realize that
the computer is the way of life.
So in working in that manner, we think that the only way
this would have happened would have been through the
Appalachian Regional Commission. We think that by doing away
with welfare, which I think everyone is aware of the fact that
it is 5 years and out, now the question is what are we going to
do at 5 years from now when we have this same problem existing
as far as the poverty end of it? So that's why it's important
that we say to the young people now that now is the time that
you can do something with your life and you can make this work.
We have put together this program with the idea of hoping
that some of these young people will go into business,
establish their own business. We feel very strongly that some
of these young people will establish their own business. We
know that there is one young lady right now--her and her sister
are putting together a business that deals with selling
Christian CD's. There is a possibility, they have set a goal
that by the year 2001 they want to have sold over $20,000 worth
of CD's. It makes it very, very difficult for you as a
Christian to look a young person in the face at 16 trying to
sell you a CD and say you will not buy. They have something
going.
So what the young people come up with and the ones that we
have met and talked to, they gave us their motto, which I think
was very appropriate, in which they said business first in the
21st century. We feel that if we can get 50 percent of those
young people to continue their education and go into any type
of business, it's going to be beneficial to the Appalachian
area. It's better to pay now than to pay later for young
people. We feel that if we do not give them some ideals and
some opportunities, then we'll pay later by having them
incarcerated. We don't think that's the answer to the problem.
We think that we can help solve the problem.
I want to close by saying one thing. I think it's of the
utmost importance, Senator, that the people in Washington
realize that everyone that lives in Appalachia in most cases
live there because we love it. Because there's other parts of
the country that we could live. And for that reason, we feel
that if we could get the assistance financially, the technical
experts in this area could see that this area moves forward in
the future. We think the 21st century is going to be really
surprising to people as to what Appalachia can do if the
Appalachian Regional Commission stays in existence. Thank you.
Senator Voinovich. Thank you very much, Mr. Collins.
Our next witness will be Mr. Wayne White, who is the
executive director of the Ohio Appalachian Center for Higher
Education, Shawnee State University.
STATEMENT OF WAYNE WHITE, EXECUTIVE DIRECTOR, OHIO APPALACHIAN
CENTER FOR HIGHER EDUCATION, SHAWNEE STATE UNIVERSITY
Mr. Wayne White. Good morning, Mr. Chairman. As you said, I
am Wayne White with the Ohio Appalachian Center for Higher
Education, Shawnee State University. We often refer to it as
OACHE.
OACHE is a consortium with 10 colleges and universities
within the 29 counties of the Ohio Appalachian region. The
mission is simple: To increase the college-going rate. This
mission closely correlates with the first stated goal of ARC.
In fact, Federal co-chairman Dr. White had the list of goals up
earlier, and the first one listed says that Appalachian
residents will have the skills and knowledge necessary to
compete in the world economy in the 21st century.
The catalyst for the formation of OACHE was a comment by
our famous restauranteur and then member of the Ohio Board of
Regents, Bob Evans. Bob Evans made a comment to one of the
presidents, and I think I can hear Bob saying this. You college
presidents need to do something about our students not going on
to college. From that comment came discussions that the local
and State level and funding for Ilgard to do a study on what
the college-going rate in Ohio Appalachia was. More
importantly, it turns out, to delineate those barriers that
prevent Ohio Appalachians from going to college.
We all know obviously that Appalachians are proud,
patriotic, hard working, honest individuals. However, these
attributes are not sufficient for Appalachians to fully
participate in the current economic growth our country is
experiencing. In today's fast-paced, technology-driven economy,
advanced skills and a life-long commitment to training are
essential to secure and keep a meaningful living wage job.
Again, as Bob Evans puts it often, the days are gone when hard
work alone will get you there.
To help our citizens free themselves from the vicious cycle
of poverty, unemployment, and underemployment, we must address
the issue of education. To that end, the access and success
study by Ilgard forces us to reflect some disturbing facts. The
college-going rate in Ohio Appalachia is 31 percent, compared
to 41 percent in the State of Ohio and 62 percent nationally.
Some barriers that are delineated in this study would include
poverty, lack of role model, with only 8.8 percent of adults
over 25 having a 4-year degree compared to about 23 percent
nationally; lack of knowledge about college, including cost;
the availability of relatively good paying blue collar jobs in
the past that did not require high education attainment.
But there's no question, Senator, the No. 1 barrier to
postsecondary education by the folks in our area is low self-
esteem. Our children have the ability. They just don't know it.
In fact, the study by Ilgard, when they asked the high school
seniors in the 29-county area to rate themselves as above
average, average, or below average in intelligence, 29 percent
of Ohio Appalachian seniors report themselves above average.
The same question of a national sample produces 58 percent that
rate themselves above average.
The socioeconomic picture is no better, Mr. Chairman, in
other parts of the 13-State region. The New York Times article
ran on July 27 noted that with the national economy bubbling
along, soaking up workers and spreading wealth, much of
Appalachia live not only with poverty and unemployment, but
also with the humiliation of being taken for ignorant. This
article notes that low educational attainment not only impacts
the individual, but represents a huge reservoir of potential
work force talent that is tragically going to waste.
With this study in hand, the Ohio General Assembly in 1993
established the Ohio Appalachian Center for Higher Education.
I'm pleased to say, obviously, it was approved by our Governor
and began to offer programs in public schools to address those
barriers delineated in the study. I'm pleased to tell you that
today we've had 79 projects with partnerships with schools
along this 29-county area that increased the average college-
going rate 29 percent the first year and 24 percent for the
first 2 years combined. These are all run in public schools by
unpaid coordinators at the local level.
Newcomerstown, for example, from 28 to 45 to 56 to 72 to 56
to 78, and then 80 percent going to college. In Monroe County,
over 50 percent of those students are going to college. You
mentioned Meigs County, Southern High School there in Racine,
for the last 3 years has beat the national average in college-
going rate and ARC has been right with us.
The Federal co-chair addressed us in 1995. They were
developing the strategic plan. We have a system going on now
that I think you'll be very proud of to talk about--technology.
The presidents wanted to link these institutions with the
distance learning system. ARC gave us two planning grants. We
parlayed those dollars with the help of Ameritech, Honeywell,
GTE, and the Ohio Board of Regents to four and a half times
that. We now have the dollars to link these institutions with
the distance learning system. We have an educational training
center from the Department of Education. We have one of the new
projects in three seventh-grade schools, Trumbull, New
Lexington, and Roseville up in Franklin County. The list goes
on and on, Mr. Chairman.
But the Federal co-chair and his staff, as well as Director
Padgett and the previous directors of the office of--the
Governor's Office of Appalachia, including the one seated on my
right, have been so helpful to this consortium as it tries to
address the educational attainment level that will give our
children throughout the 29-county area some hope and some
skills that will move them hopefully from a way of poverty.
There's more testimony, obviously, and I'd be glad to leave
that for the record. Thank you, sir.
Senator Voinovich. Thank you very much for being here.
Our next witness is someone that's familiar to a lot of
people here in the audience, and that's Dan Neff, who's the
director of the Ohio Mid-Eastern Governments Association. You
bring lots of background to that organization. I'm glad to have
you here, Dan.
STATEMENT OF DAN NEFF, DIRECTOR, OHIO MID-EASTERN GOVERNMENTS
ASSOCIATION
Mr. Neff. Thank you, Senator. It's a pleasure for me to be
here today and be a part of this panel. I think you can see
today from the previous testimony the many positive aspects of
the ARC program.
Senator Voinovich. Let me just say something. It really
tickles me to see some of our people that worked in State
government moving out and going to various places. It's part of
the job of being Governor that you see all these people growing
and taking on new things. I have to tell you it makes me feel
very, very good.
Mr. Neff. I appreciate those comments. I have to tell you,
one of the most difficult decisions I had was to leave your
Administration. I had the pleasure of working with many fine
people, yourself, and Lieutenant Governor Nancy Hollister who I
hold very dear. It means a lot to me personally as well as
professionally. I would not have left if it wasn't for the fact
that I quite frankly really believe in the work of ARC and the
work of the local development districts. I think they have a
very important role to play. I believe they are making a
difference. You do have my testimony for the record. I'll try
to keep my comments brief.
I would like to point out a couple things that have been
touched upon, and I want to just touch upon them a little bit
further. First of all is the flexibility of the program. I
think that is one of the one elements of its success and that
it has really done a lot in the respect that when you think
Federal programs, oftentimes you think bureaucracy, time,
paperwork, all the things that make people cringe. As Larry
Merry cited, different application forms and all the different
things you have to go through.
One thing about ARC, while there are applications and
processes to go through, they're not big on bureaucracy.
They're a phone call away. Staff is looking for ways to help
you approve projects, not to find ways to disapprove projects.
That's at the State level as well as the Federal level.
The other thing is the fact that the commission has really
seen fit to try to be a flexible and balanced program. We've
heard a lot of talk about distressed counties today. I think
that's very critical. The ARC and the dollars that have been
spent on distressed counties has exceeded 50 percent. That has
a lot to say about the program. However, I don't think we can
lose sight of the fact that there are growth centers that still
need to be primed and ready. Larry, again, cited those in
Muskingum County. I think from our standpoint, Muskingum County
is one of our prime growth centers.
It would be remiss for us not to look at--while the fact
that Muskingum County itself is prosperous and growing and
having new plants and expansion, it's also benefiting a region
around that area that includes distressed counties and at-risk
counties, including Perry and Morgan and Guernsey. So there is
really very great benefit for all of those counties, not just
Muskingum County, with the investment that ARC is making.
I'd also like to point out again the value of the
partnership that exists at the local, State, and Federal level.
It's a very unique structure. I do not know of another Federal
agency that has the structure and where, as Commissioner Proud
pointed out, the driving takes place from the bottom up. Most
of the project priorities are taking place in Ohio at the local
level with the local leader being mayors and economic
development professionals. They're saying these projects are
what are important for us to do to make a difference for our
communities and improvement the quality of life in these
communities. So that has made a big difference. One of the
things that I'm most proud of is the fact that we can play an
important role in that process of bringing those people
together as facilitators and helping them be successful at the
local level.
Again, the strong leadership from Dr. White--that I think
it is important to point out that he and the Governors play a
vital role in determining policy and direction and where the
program is headed, and what those priorities are going to be. I
have to point out, too, that the fine executive director
leadership of Tom Hunter has honed the machine to be very lean
and mean, if you will. The money can flow quicker and faster to
those areas that have the needs that they do.
Again, the value of the interchange between the State and
Federal Government, the flexibility and accountability that
exist in the program. The partners that Dr. White mentioned
with the other Federal programs, I think that's been critical
to the success of the Appalachian Regional Commission in these
past several years. And, also, the initiatives that have been
cited--leadership, export, telecommunications, and now
entrepreneurship. One that hasn't been mentioned yet, that I
think needs to be pointed out, is the transportation effort
that has really done a lot to promote growth in the
transportation area, with an intermodal focus of roads, rail,
air and river.
One of the things they're working on right now is river
development with the Ohio River and trying to lead an effort
that will bring together Pennsylvania, West Virginia, Ohio, and
Kentucky to look at the Ohio River and marketing the Ohio River
to the rest of the Nation and the world as to what it can bring
and do to improve transportation of products. So, again, I
thank you. I appreciate the opportunity to come today. I look
forward to the rest of your visit.
Senator Voinovich. Thanks very much, Dan.
Our next witness is Leslie Lilly. She's president and chief
executive officer, Foundation for Appalachia in Ohio. Leslie
and I had a chance to talk a little bit earlier today. I really
don't think that enough Ohioans are aware of the fact of the
tremendous role that the foundation has played in the lifeblood
of our State. We have one of the best statewide organizations
that tie together.
I don't know, Leslie, if you've had a chance to go to any
of their meetings yet, but you've got some real great
colleagues throughout the State. One of the things that I'm
very proud of is that the First Community Foundation was
founded in Cleveland, OH. When we lost our daughter in 1979, we
created a foundation in her memory for the major work program
in Cleveland. The Cleveland foundation is running that for us.
Just to have the foundation there that can kind of be the host
for this whole thing that we're doing in memory of our daughter
is really heart warming.
I also mentioned to Leslie that little controversy about
the estate tax law in the State. I've been pretty clear that
I'm not for reducing any taxes right now. I think what we need
to look at is estate tax, the marriage penalty, a lot of
things. The whole tax reform. The fact that 60 percent of
people in this country have to hire some lawyer or accountant
to figure out their taxes is a mess.
I think that we talked about some other unmet needs that we
have in our country. We also have a big national debt. It's
$5.7 trillion. One of the things that really is of concern to
me and I think should be of concern to everyone at this table
as they're looking at the Appalachian Regional Commission and
looking at some of these other Federal programs is that at this
stage we're spending 13 cents out of every dollar on interest
payments. We spend more money on interest today than we do on
Medicare. We do another couple of pennies on defense more than
that, and then we spend another 4 cents more than we do on
paying interest for what we call non-defense discretionary
domestic spending. Then 53 cents goes for mandated costs.
We call them entitlements. Medicare, Medicaid, Social
Security. In 10 years, 70 percent of the budget is going to be
used for Medicare, Medicaid, and Social Security. That leaves
30 percent to take care of the ARC, pay interest, provide for
our national defense. Anyone that's been in government as long
as I have, knows when you hear that kind of debt and you have a
couple of good years, what you want to do is pay the debt down
and reduce it.
When I got married almost 40 years ago, we paid 6 cents on
every dollar. Now it's 13 cents. And if you can get rid of that
interest cost, then there's more money for the kind of programs
that we're talking about here and also for some legitimate tax
reductions that are more evenly based. But one of them was the
estate tax.
I was pointing out that a lot of people are not aware of
the fact that the person that was one of the biggest proponents
of the estate tax in the United States was a man by the name of
Andrew Carnegie. Andrew Carnegie was an immigrant from Donfern,
Scotland. He came here and he made a whole pile of money. He
left Scotland because he didn't like it. One of the things he
wanted to do was make sure that we didn't end up in the United
States with the kind of system that they have over there. It
still exists. There's a big gulf between the real haves and the
have-nots. So one of the things he did was he thought that the
estate tax would help to eliminate that situation.
I know some people say, ``Well, it's an anti-free
enterprise.'' I think that too many people are included today
and we need to change it. But the point I'm making is, his
attitude was he didn't want to have this whole gigantic
structure like they have over there.
The last thing he said, it's kind of interesting, is that
if he had the estate tax, it would encourage people to be
involved in philanthropy. I'm sure everybody at this table
gives a lot of money to charity. I'm sure I would continue to
do it. It sure helps that it's deductible. I look around at
hospitals and other things that are being done around this
country and foundations that have been created and so on and so
forth. I can't help but believe that one of the incentives for
it is the fact that people would rather give it out to
something that they'd like to have a handle on than wait until
they die and have Uncle Sam take it away from them.
But that's just a little sideline of some of the things
that we're dealing with today in Washington. But I'm so tickled
to hear that we're going to have this Appalachian Foundation
and it's going to benefit, what, all of the----
Ms. Lilly. Twenty-nine counties.
Senator Voinovich. The counties that are involved in Ohio.
Its home is going to be right downstairs; isn't it?
Ms. Lilly. That's right.
Senator Voinovich. That's wonderful. So we're anxious to
hear what you're doing.
STATEMENT OF LESLIE LILLY, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, FOUNDATION FOR APPALACHIAN OHIO
Ms. Lilly. Thank you.
It's a privilege to have you visit this morning. I shared
in a lot of excitement with the community. Six months ago, the
foundation wasn't on the town square. We were still at the
leadership level really beginning to do the work of developing
the organization and building a steering committee of leaders
that came together across the region who were concerned for the
future of Appalachian Ohio, but understood the significance
that philanthropy can mean for communities who are doing the
tough work of community development.
I know that you're here today in a community, too, that is
typical of the region that it was really based on an economy
that came from an area that never envisioned a time or era when
the future economy of the region wouldn't be driven by that.
You're in a community that helped to develop a strong mode of
optimism about the future in Appalachian Ohio. It built this
town square. It helped raise this beautiful opera house. It
gave flower to what turned out to be a relatively short-lived
era of prosperity.
So when folks talk about the whole notion of resilience, of
volunteerism, of love of community and the ability to give,
this community and the leadership that you've heard from today
really exemplifies in my mind some of the best of what can
happen when the talent and skills of our communities come
together to help make a positive change.
The Foundation for Appalachian Ohio is unique. I think
that's a watershed for a variety of reasons. In 1998, the
foundation was the recipient of a 3-year grant from the agency
in the amount of about $400,000. This grant was made by ARC to
the foundation as seed and development money and, in my
knowledge, a type of grant for purposes that are really
unprecedented in the agency's history. Its purpose was to
provide startup funding which also helped to leverage other
money from private sources, both other foundations in the
State, individual donors, and then ultimately a million dollar
challenge grant from the State of Ohio which we also hope to
encourage private funding and funding from other corporate
donors and individuals in the region who have also been a part
of the Appalachian experience, either came to school here,
worked here, born and raised here, who have gone someplace else
who want to find a way to give back.
The reason that the foundation was created was because
Appalachian Ohio has over 12 percent of the State's population
but less than 2 percent of the State's philanthropic assets are
found here. If you've ever been on the grant seeking side of
the table and you begin to look at the kinds of dollars that
are needed to leverage community opportunities, you understand
how important that venture capital from private sources can be.
So philanthropy has been another one of the missing
ingredients that together form the infrastructure for community
development that's needed by Appalachian Ohio. When you compare
this region to the rest of the State and Nation, permanent
philanthropic assets and institutions are largely absent or
undercapitalized here. We are, however, extremely fortunate
that Appalachian Ohio has approximately 20 community
foundations that now exist or that serve various portions of
the State in the 29 counties. But typically the size of their
endowment and the amount of their grants each is able to make
is far less than urban institutions.
As you noted, Ohio invented the community foundation. We
have the largest one in the country in Cleveland. But of the
top 10 independent foundations by assets, the top 10 community
foundations by assets, and the top 10 corporate givers by
giving, none are located in Appalachian Ohio. You know that
location of permanent assets is strongly related to the issue
of where grants are in majority need. So Appalachian Ohio is
not a funding priority of any of the top 10 charitable givers
in the State.
So it's a circumstance of place--this is something that we
can work with the partners external to this region, but in the
end, Appalachian Ohio needs its own infrastructure to promote
charitable giving. The grant made to the foundation by ARC is
all about building home-grown possibility to attract and build
charitable assets.
We spoke earlier about endowment. Endowment is the way to
give back to the community in perpetuity so that the endowment
is held forever and it's the earnings that are created by that
endowment that help to give communities the capital that they
need to undertake creative projects.
So we think that endowment needs to be built two ways in
Appalachian Ohio. One is to create an overarching source of
capital for regional improvement to help communities do the
work of coming together, and another is to provide money that
can be held locally as assets in the form of charitable
foundations or community funds. We have a partner here, the
Muskingum County Community Foundation, an excellent example of
the kind of local institution that every community really needs
the benefit of, in order to have resources to help fuel the
kinds of things that communities think are important to do and
for which is their priority.
So, in summary, I would just say that the grant money by
ARC is important for a couple of reasons. First, it recognizes
that philanthropy is an important ingredient in community
development that the region needs that we haven't had but we've
had the capacity to develop. Second, is that philanthropy is a
big partner in the efforts being taken, partnering with
national foundations, as well as those within the region or
those locally. The conference on entrepreneurship is an
excellent example.
So the work is not yet done. The Foundation for Appalachian
Ohio is just getting started. But our goal is to help
communities do the work and make philanthropy part of the
vehicle to get that done.
Senator Voinovich. Thank you very much.
I just checked with Ellen, and we're supposed to end the
hearing at 11 o'clock and it's 11:30. So we've been having fun.
I just want to say thanks to all the witnesses for being here
today. You have given me some different facets of this diamond
of the ARC and helped me to better understand what's happening
here. Frankly, I'm very impressed with some of the very
positive things that you all had to say.
I look forward to getting out today and seeing some of the
projects firsthand that have benefited from leadership from
people like yourselves and from the money provided by the ARC.
Thank you very, very much.
Again, I want to thank the community for allowing us to use
this wonderful facility. I'd love to come back sometime and see
a performance here. Thank you very much.
[Whereupon, at 11:33 a.m., the subcommittee was adjourned,
to reconvene at the call of the chair.]
[Additional statements submitted for the record follow:]
Statement of Eugene Collins, Portsmouth Ohio Inner City
Development Corporation
To the Chairman and members of the Environment and Public Works,
Transportation and Infrastructure Subcommittee.
My name is Eugene Collins. I am an American citizen and a veteran
of the United States Army and President of Portsmouth Ohio Inner City
Development Corporation, a 501-C3 non profit corporation. We are a
recipient of an Appalachian Regional Commission regional initiative
grant that focuses on developing an interest in entrepreneurship among
youth in a ten county area.
This project has touched the lives of over one hundred youth in
several Appalachian communities within the Ohio Valley Regional
Development District. The reason this program has been so special to us
is because we feel that small business ownership is a way that any
American can be successful if he or she sincerely believes in the
business and works hard to make it a success. We are also very high on
entrepreneurship because it is still the case that small businesses
account for the vast majority of new jobs created by the American
economy.
Participation is open to all young people in the target area who
are between the ages of fourteen to twenty-two. However, the project
places special emphasis on minorities and females. Many of our
participants face enormous barriers to success. They are being raised
in poverty stricken homes and are at risk of dropping out of school
and/or engaging in criminal behavior. We feel that our Youth
Entrepreneurship Initiative gives them a new career option to consider
and fortifies them with the motivation to break the cycle of poverty
that is so common to Appalachia.
The project's work plan consists of structured training seminars
and workshops held in various locations throughout the region.
Participants are given the basic information necessary for starting up
and maintaining a new business. The hands-on instruction is presented
by successful business owners whose background resembles that of the
participants. The project supplements the nuts and bolts information
with motivational speakers and presenters who emphasize the importance
of education as the key to successful business operation and show them
ways in which that education can be obtained. Participants are also
linked with a mentor in their home area who has successfully started
and operated a thriving business. The mentor is available to answer
questions, help develop business plans and offer other follow-up
support. The mentorship component also gives the youngsters the
opportunity to see first hand how entrepreneurs operate their
businesses.
The project will also provides no interest loans for up to twenty-
five young men and women who wish to start their own full or part-time
venture and develop workable business plans.
Ultimately, we wish to instill in the youth of our area the belief
that regardless of race, creed, color or where you may live in America
you can be a successful businessperson.
We believe that the creation of a new group of potential
entrepreneurs within Appalachian Ohio will be a positive force for
economic development of the area. This project and others like it
deserve the continued support of the Appalachian Regional Commission
and other funding sources.
The Motto of our program is: Business First in the Twenty-First
Century.
A synopses of the project's approved work plan is attached to this
statement.
identification and description of the area to be served by the project
The area to be served consists of Scioto, Gallia, Lawrence, Pike,
Ross, Adams, Brown, Highland, Jackson, and Vinton counties of Ohio. The
project's target group will be minority and/or disadvantaged youth aged
fifteen through twenty-one who display an interest in entrepreneurship
as a career choice.
OBJECTIVES OF THE PROJECT AND RELATION TO ARC STRATEGIC GOALS AND
REGIONAL/LOCAL DEVELOPMENT PLANS
The continuation project relates to Federal/State ARC goals of
creating dynamic local economies and support of entrepreneurial
activities in Appalachian counties. It addresses regional goals of
access to capital and financial assistance and technical and managerial
assistance. The major objectives for the project are:
To introduce a minimum of 130 young men and women to the
opportunities available through entrepreneurship and self-employment as
career options.
To identify and utilize no fewer than 20 successful businesspersons
to serve as mentors to participants.
To identify and recruit appropriate providers of financial,
technical and business support services.
To provide opportunities for participants to actually begin their
own businesses through small start-up loans and assistance in
consignment of participant generated goods or services through
appropriate outlets. It is expected that 30 participants will take
advantage of this opportunity.
The youth business loan component will be administered in much the
same way as PIDC manages its existing adult microloan component.
However, some concessions will be made to the particular needs and
circumstances of the target group. For example, requirements for
personal credit histories and collateralization of loans will be
waived.
PIDC's microloan committee will review applications for youth
microloans, which will average $500. That committee consists of PIDC
senior staff and selected members of the Ohio Valley Minority Business
Association. Approval will be based upon the viability of the
individual business plan submitted by the loan applicant. Development
of a successful business plan will be a key element of the workshops
and seminars referred to below in this narrative. In addition, project
staff will provide hands on assistance to participants in developing
their specific plans. Loans will be made at no interest and will
normally be repayable in equal monthly installments with the first
payment due six months from the business start-up date. Repayments will
be deposited in an escrow account and will be used to maintain an
ongoing capacity to make future youth microloans after the termination
of ARC support.
NEED/PURPOSE OF THE PROJECT
Appalachian Ohio has not fully enjoyed the benefit of the longest
peacetime economic boom in the nation's history. Unemployment and
poverty rates remain unacceptably high within the target area. Monthly
unemployment statistics in each of our counties are consistently double
the State and national averages. Youth unemployment shows even higher
percentages than those for the general population. Although some
economic development activities have been successful in obtaining new
jobs in the area, these efforts have not kept pace with the need. The
lack of opportunity is compounded for many minority youths who are
faced with a number of other barriers to successful employment. One
significant barrier we have found is that many minority youngsters are
reluctant to consider self-employment as a career option.
The Youth Entrepreneur Initiative recognizes that the vast majority
of new jobs generated in our national economy are created by either new
or expanding small businesses and we propose to address our local need
by expanding the pool of potential entrepreneurs in the area.
DESCRIPTION OF THE PROJECT
Informational meetings will be held in each of the ten counties to
explain the format and content of the Youth Entrepreneurship training.
These meetings will describe the opportunities and obligations
associated with the formation and management of one's own business.
PIDC's project staff and appropriate program consultants will conduct
the meetings. Transportation will be provided for those require
assistance in attending.
PIDC will publicize the meetings through an extensive media
campaign using both regional radio and newspaper advertisements and
radio and TV public service announcements. Informational material
promoting the program will be distributed to each high school,
vocational school and college within the region. Material will also be
made available to local economic development and social service
agencies for distribution.
The program will culminate in a series of ten workshops in various
regional locations that will provide detailed information to
participants on the basics needed to launch an entrepreneurial
enterprise. Topics will include, but not be limited to: legal
requirements, financial planning, banking, accounting, capital
development, personnel selection and management, taxes, EPA/OSHA
standards and business plan development. The workshops will be
conducted by program staff and specialized consultants/presenters in
each of the fields referenced above. They will be assisted by local
volunteer professionals who have working expertise in each topic.
Transportation will be provided for those without a means to otherwise
attend.
The project will continue to refine the content and curricula for
the workshops. The approved content will be the joint responsibility of
the individual program consultant/presenter and PIDC staff. Content
will vary depending upon the specific areas of expertise each
consultant/presenter brings and the needs and interests of the workshop
participants.
As a part of the program follow-up activities, each workshop
participant will be linked to a local mentor who is engaged in or has
expertise in the young person's field of interest. Each mentor will
commit to a minimum of six instructional visits at the mentor's work
site or other appropriate place. Mentorship visits will consist of
participants engaging in supervised hands-on work, question and answer
sessions and instruction in a variety of business procedures. Mentors
will be selected on the basis of their expertise and ability to
communicate information and their geographic proximity to the assigned
participant.
The program will continue to utilize its linkages to regional
minority business organizations and the larger business community for
identification and recruitment of mentors. These resources include the
Ohio Valley Minority Business Association, businesses participating in
the MCBAP activities, the economic development agencies in Portsmouth,
Ironton, Chillicothe and Hillsboro, Chambers of Commerce, local
financial institutions and post-secondary schools.
BENEFITS/RESULTS OF THE PROJECT
It is expected that up to thirty of the young people participating
in the project will ultimately engage in entrepreneurship as a career
choice. This would result in creation of as many as 100 to 150 new jobs
within the area, thus providing an ongoing benefit to local economies
in the form of payrolls, expanded tax bases and stabilization of
population. A shorter term benefit will be the income generated and
hands on experience gained by those participants involved in the start-
up grant and consignment components of the program.
__________
Statement of Hon. Nancy Hollister, State Representative, Ohio House
of Representatives
Good morning, my name is Nancy Hollister, State Representative of
the 96th District, which includes Morgan County, and parts of Athens,
Muskingum and Washington Counties. I welcome you Chairman Voinovich and
members of the Subcommittee to this great region of the State.
As a former Mayor of Marietta, Director of the Governor's Office of
Appalachia, and Lieutenant Governor it has been my pleasure and
frustration to participate in the ARC process. It has been a pleasure
because ARC truly works from the ``grassroots'' up: local projects with
regional input and State government support. My frustration has been
the constant battle of explaining the benefits and the necessity of ARC
to Congress.
Why? When ARC was initiated, the war on poverty was declared and
statements like ``We will eradicate poverty'' were made. These
statements, while noble, were not realistic. The geography, the
culture, and the changing economic conditions will never create allow
the ``elimination of poverty.'' The true nature of the partnership
between the ARC Federal, State, and local levels is one of opportunity
to make a difference in the quality of citizens' lives.
I can tell you that it is an organization that adapts to the
political, economic and social changes occurring throughout the region
and across the nation. One example of this adaptation is the ability of
the Commission to deal with distressed counties. When the ARC was
created in 1965, Congress mandated a ``growthcenter'' approach to
community and economic development. The areas served were those that
had ``significant potential for future growth where the return on
public dollars invested [would] be the greatest.'' The thought was to
generate development as quickly as possible.
In 1981, that ``growth-center'' model came into question as ARC
faced possible elimination. The Commission identified and sought to
focus on counties that had not shared in the benefits of ARC's initial
investments. ARC proposed to Congress the Distressed Counties Program
and cited the needs of clean water and adequate sewers as the top
priorities.
When the Distressed Counties Program was implemented in Fiscal Year
1983, the program set aside 20 percent of ARC project funds for
distressed counties. In the 1990s, the way counties were designated was
changed from being decided every 10 years to being decided every year
based on rolling three year old numbers. This change allowed the
designations to be more flexible and moreresponsive to changes in the
economy.
In 1994-95, as ARC support strengthened again, many called for a
move toward a ``worst first'' strategy. From these discussions came an
increase of the set-aside for distressed counties from 20 to 30 percent
in Fiscal Year 1996 and the development of a four tier system of
categorizing counties including: distressed and transitional (counties
below national economic averages), competitive (counties near national
averages), and attainment (counties at or above national averages).
Program funding followed these categories as funding was restricted for
competitive counties and virtually eliminated in attainment counties.
When Congress reauthorized ARC in 1998 for the first time since
1980, the ARC's distressed counties policy and classification system
were written into the legislation.
ARC has not been successful at self-promotion. But, I think they
deserve credit for their successes. Prior to ARC's inception in 1965,
there were 219 counties that met the current definition of distress.
Since 1960, more than 100 counties have moved out of economic distress.
This is a clear indicator of the progress that the program has made to
the region's most in need residents.
But, they know they have a long way to go. The number of distressed
counties is on the rise again including in Ohio where Jackson County is
now considered distressed. ARC is working to develop new strategies to
address the problem.
ARC GOAL AREAS
In 1998, Congress recognized the value of the goals and objectives
of the ARC as a viable means to increase economic and human
development. Through the reauthorization of ARC, Congress basically put
into law ARC's strategic plan. Each State has the ability to identify
its objectives and strategies for reaching the ARC goals through its
own strategy statement.
In Ohio, we embrace the five goal areas that ARC proposed to
improve the quality of life for all Appalachians. I would like to take
this opportunity to tell you about what Ohio has done within these goal
areas during the last decade.
Goal 1
The first goal identified by the ARC is that Appalachian residents
will have the skills and knowledge necessary to compete in the world
economy in the 21st Century.
Wayne White, of the Ohio Appalachian Center for Higher
Education will address you in a few minutes on the success of his
project based in part from assistance the ARC has given his
organization.
The ARC funded the Jefferson Community College Engineering
Computer Project in FY 1991. The project's purpose was to expand
computer learning to meet specific industry needs. Industry in
Jefferson County had concluded that Jefferson Community College was an
excellent source for highly motivated and competent employees. Hoping
to hire even more employees, the firms recommended that the college
update its Computer-Aided-Design Laboratory and establish an
Engineering Computation Laboratory. In its first year, the new CAD
facility directly benefited over 220 design students. Over 1,100
students were served by the Engineering Computation Laboratory, through
new courses in computer science as well as significant enhancements to
the College's advanced mathematics, science and engineering curriculum.
ARC put $75,000 into this project leveraging an additional $75,000 in
local and State match.
Goal 2
The second goal identified by ARC is that Appalachian communities
will have the physical infrastructure necessary for self-sustaining
economic development and improved quality of life.
Larry Merry of the Zanesville-Muskingum County Port
Authority will be speaking to you shortly about the gap that ARC
funding was able to fill allowing the Port Authority to construct an
access road to an industrial park.
Rick Platt of the Alliance 2000 will address you regarding
the role of ARC in an industrial park.
ARC funded the Austin Powder Rail Project in FY 1991. CSX
Railroad announced that it would abandon nine miles of track serving
the Austin Powder Company. Local leaders in Vinton County were very
concerned as it served the Austin Powder plant, the county's largest
private business, providing more than 260 jobs. Working closely with
Austin Powder company officials, community leaders decided to try to
save the line and sought support from the city of Jackson, in adjacent
Jackson County, which already had acquired over 50 miles of track from
CSX in an effort to sustain local industry. The city of Jackson secured
funding to acquire the Austin Powder line and arranged for the Indiana
and Ohio Shortline Railroad to operate and maintain the track. Instead
of closing, the Austin Powder Company invested $4 million to expand its
plant and created 50 new jobs. The rail has helped stabilize the local
economy, which had a poverty level close to 50 percent when the project
was originally proposed. The rail acquisition program has maintained
rail service to over ten local companies, currently employing over
1,000 people. The ARC funded $192,495 while State and local sources
contributed $650,000. ARC has shown how its gap funding can make the
difference in whether or not a project gets done.
Goal 3
The third ARC goal is that the people and organizations of
Appalachia will have the vision and capacity to mobilize and work
together for sustained economic progress and improvements of their
communities.
Leslie Lilly, CEO of the Appalachian Foundation, knows the
importance of local capacity and philanthropy and will discuss that in
her testimony as she describes the assistance that the ARC has given
the Foundation.
Institute for Local Government Administration and Rural
Development (ILGARD) at Ohio University, now part of the George V.
Voinovich Center for Leadership and Public Affairs. Since 1981, this
organization has expanded the capacity of government and nonprofit
agencies to serve Appalachia's 29 Ohio counties. Functioning as a
public service educational laboratory, ILGARD has provided small
communities the same access to applied research and technical
assistance as larger, wealthier communities. Staff and students work on
approximately 35 projects per year. One typical project was the Monday
Creek Watershed, a top State environmental restoration project. ILGARD
helped establish a priority list of problems, coordinated volunteer
projects and used its Geographic Information Systems (GIS) capabilities
to create interactive maps of the watershed.
Goal 4
The fourth goal area is that the Appalachian residents will have
access to financial and technical resources to help build dynamic and
self-sustaining local economies.
The Revolving Loan Fund (RLF) program administered by the
Ohio Valley Regional Development Commission (OVRDC). In 1995, OVRDC
agreed to participate in a financing package involving private lending
and owner equity in order to help a small manufacturing business
expand. That business is MACA Plastics, Inc, a female-owned and
operated plastic injection molding manufacturing firm in Adams County.
As a result, 18 new jobs were created and the loan was paid off in two
years. The company now employs 125 people and continues to grow and
thrive as a major employer in the region. The RLF received an initial
capitalization of $500,000 in Fiscal Year 1985 and has been
recapitalized several times since then. Each time the fund has been
recapitalized, the local match has been equal to the amount that ARC
has invested in the fund. The other two LDDs have similar RLFs with
very similar results.
Goal 5
The fifth goal area is that Appalachian residents will have access
to affordable, quality health care.
Although Ohio still has a lot of progress to make in this
final goal area, we do have a big success to tout. The Southeastern
Ohio Dental Clinic is a full-service dental facility that was developed
by a group of citizens and representatives of organizations whose goal
is to provide low-income families access to low cost preventative and
corrective dental services. The Community Action Corporation (CAC) of
Washington and Morgan Counties manages the clinic. The successes of the
program are astounding in the first six months of its second year of
funding, the dentist saw 1,950 patients and the hygienist saw 645. Of
that total number, 44 percent were receiving Medicaid, 51 percent were
self-pay and only 5 percent had dental insurance. The clinic has
expanded its acceptance of dental insurance and has achieved its goal
of self-sufficiency. The clinic received funding in Fiscal Year 1998
and Fiscal Year 1999 totaling $110,000 leveraging $317,500 in local and
State monies.
ARC Funding in Ohio FY 1991-99
--------------------------------------------------------------------------------------------------------------------------------------------------------
No. of Other Fed Total Cost
Goal Projects ARC dollars dollars State dollars Local dollars dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................................... 71 $7,765,842 $79,870 $3,465,892 $4,592,677 $15,904,281
2....................................................... 141 25,136,903 27,683,114 34,140,028 52,423,608 139,383,653
3....................................................... 32 2,127,570 230,053 67,170 2,367,427 4,792,220
4....................................................... 51 4,125,326 319,340 1,261,789 2,374,306 8,080,761
5....................................................... 9 646,211 183,720 448,634 512,883 1,791,448
-----------------------------------------------------------------------------------------------
Total............................................... 304 $39,801,852 $28,496,097 $39,383,513 $62,270,901 $169,952,363
--------------------------------------------------------------------------------------------------------------------------------------------------------
CONCLUSION
ARC is now in a period of its history when they are addressing the
harder-to-serve areas. ARC must be an integral part of any solution
aimed at dealing with these harder-to-serve areas. The strategy should
not be to pull away from ARC as the means to accomplish our goal of
improving the quality of life for all Appalachians. They must be given
continuing opportunities to complete the job that they have so
successfully started.
__________
Statement of Leslie Lilly, President and Chief Executive Officer of The
Foundation for Appalachian Ohio
Several weeks ago I attended a town meeting organized by the
Appalachian Regional Commission on strengths and strategies in
economically distressed communities of the region. Of all the things
said that day, I was most stunned by a remark made in passing by
Governor Paul Patton of Kentucky. He said, simply, that the future of
coal is dead.
You are here today in a community and part of the region where the
future of coal and by its extension, exportation of resources, was
presumed to be forever. Think minerals, timber, clay, oil, gas, and
river networks. Think agriculture, manufacturing, mining, construction,
transportation, and trade. The region is blessed with an abundance of
natural resources around which eternal enterprise and expansion of
industry seemed not to be an unreasoned or unwarranted expectation.
That strong note of optimism built this town square, raised this
beautiful opera house, and gave flower to what turned out to be, on the
lifetime scale of people and places, a short lived era of prosperity.
Times changed. The economy changed. Assets left and were exported
from our region that never came back. It didn't happen all at once. It
didn't occur in the absence of community leaders that recognized that a
sea-change was coming. They struggled to find alternatives. That
challenge has always been formidable in the face of rural. Rural is not
your one-size-fits all kind of place. Singular dependencies are hard to
break precisely because it takes a great deal of ingenuity and
sustained investment to take something in its natural state and to
transform and add to its value, pursue markets, and supply demand when
demand, by definition is so far away and fickle. You get something done
one time and you tend to think you have accomplished your goal in a
rural area and rightly so. Every economic benchmark achieved by this
region has been hard won. So it isn't surprising that this combination
of enterprise and success never mind the durability of it all still
live on in this century. Quick fixes and short-term political memory go
a long way in the face of long-term obstacles to diversified
development.
The remains of development-past linger on in Appalachian Ohio. This
is commerce whose vestige is based in industries that have since been
transformed by globalization and innovations in technology and
communications. The region has the same old problem, but it has an
updated and more modern look. Same dance, new shoes: not enough jobs,
and not enough quality jobs in Appalachian Ohio that ensure a decent
standard of living for those who would make and have made the choice to
live here. But it doesn't stop there: the lack of jobs begat a lack of
many other things that are needed to form the basis of a healthy cycle
of community development:
When the pace of development faltered in Appalachian Ohio or didn't
occur with some cumulative measure or succession of positive effects,
it meant that roads were neglected or never built or never completed;
that transportation systems were not put in place or strategically
positioned to attract and support commerce; that public investments
were not made that ensured better government, better public facilities,
better schools and better schooling; that access to health and medical
services were limited at best, or, at their worse, nonexistent; that
basic infrastructure water, sewer, and phone service, developed like a
patch work quilt. Some communities have it all while in others,
feasibility and construction costs are still an issue; and that the
pattern of this underdevelopment extended itself into present
circumstance and is now manifest in the digital era as the digital
divide. Appalachian Ohio is not ready and not wired for the 21st
Century. If the marketplace solely drives the creation of that
capacity, there is healthy reason to suspect that the region will never
be connected in ways comparable to urban communities unless the public
interest prevails.
Put all these things together and the conditions of economic
context and geographic place together fostered a condition and culture
of poverty for many of Appalachian Ohio's people. It is not just an
attitude or a problematic mindset; or, as some would accuse, having an
absence of resolve to do better or differently. It is a new verse, to
the same song, sung in a present reality, that jobs in Appalachian Ohio
have continued to vanish. While the State's metro areas have been
scrambling to find workers, Appalachian Ohio suffered a series of
devastating job losses in 1999 and more are predicted to follow as the
region's traditional base of manufacturing and mining continue to
shrink.
In a rural market, the magnitude of the loss of 1,200 jobs ripples
out into the region in countless ways, leaving behind a wake of
economic decline and despair that penetrates deep into ancillary
businesses and services. Were he to ask, Governor Patton would only
find agreement in Meigs County that coal is, indeed, dead, at least for
the 800 miners that will be the last to turn out the lights as they
leave their jobs, many after over 20 years of labor in the mines. No
one yet knows where next they may turn to work or even if there will be
work.
You are thus in a region that stands straddled across a threshold,
with one foot deeply rooted in past social and economic history; and
the other extended, tentatively poised, ready to strike out and step
onto new ground and enter into a new era. Because of this, you are in a
place of stunning contradictions: where 40 percent of the children ages
3-4 in Athens County live below the federally-defined poverty level,
and live out this devastation in the shadow of a world class
university; where all the resources of the world can be accessed on the
Internet highway, but if you want to drive somewhere in the region you
mostly can't get there from here (or if you can, you'd better have
plenty of time) because there isn't a modern road system; where young
people and adults will soon have access to the latest and best in
training on e-commerce at Hocking College but if you own a small or
medium size business, you can't get a high speed connection to the
Internet in most communities; and where the rise between 1984 to 1996
in real per capita income based on 1992 dollars isn't enough cash today
for you to go out and pay the book value on a used car made in '92.
Appalachian Ohio is like a house that is being remodeled while you live
in it: you know it is going to be so great when the job is finished
but, in the meantime, there's the devil to pay.
So do we need the Appalachian Regional Commission? Is its job done
so we can all go home and spend these Federal dollars more wisely, or
on something or somewhere else, or perhaps not at all? Based on
unemployment, average per capita income, and poverty rates, Appalachian
Ohio is the fourth poorest among Appalachian States. Federal money, as
in all things characterized as "big government", is declining and
spending by the State in Appalachian Ohio averages $3 per capita.
Kentucky by comparison spent more than $18 per capita last year in its
Appalachian communities. The paucity of both State and Federal
resources being targeted to Ohio's rural areas of greatest need is an
issue of both public and private proportion, but neither sector is
capable or able to alone shoulder the leadership required to transform
the region's shrinking economy. This is the crux of an important issue:
who are and will be the future partners to accomplish what remains to
be finished?
The Foundation for Appalachian Ohio is unique among grantees of the
Appalachian Regional Commission (ARC). In 1998, the Foundation was the
recipient of a three-year grant from the agency in the amount of
approximately $400,000. The grant made by ARC to the Foundation is, to
my knowledge, a type of grant for purposes unprecedented in the
agency's history. The Foundation for Appalachian Ohio is one of the
more recently created foundations among all those that exist that
represent an important network of community funds that are established
in and across Appalachian Ohio. The Foundation for Appalachian Ohio was
created in 1998 by a broad based group of community leaders concerned
for the future of Appalachian Ohio. Appalachian Ohio continues to
suffer from high rates of poverty, unemployment, and under-employment.
In 1995, approximately 1.4 million people or about 12 percent of all
Ohioans resided in the Appalachian region of the State. Yet less than 2
percent of the State's foundations assets were held in the region.
Philanthropy is thus another of the ingredients that is incomplete
or missing that together form an infrastructure for community
development in Appalachian Ohio. When the region is compared to the
rest of the State and nation, permanent philanthropic assets and
institutions are now largely absent or undercapitalized in Appalachian
Ohio. This is an issue and an opportunity: Appalachian Ohio's capacity
for self-help depends in large measure on having the means through
which the region can invest in itself. There has never been a more
promising era within which to grow and promote charitable giving in the
region. The nation is experiencing the greatest expansion in its
economy in modern history; and a vast, inter-generational transfer of
wealth representing trillions of dollars will occur over the next ten
years. Appalachian Ohio deserves to benefit from this abundance. The
region, if it is to successfully tap and leverage this expansion of
charitable wealth, must have home-grown capacity.
In the State of Ohio, of the top ten independent foundations by
assets, of the top ten community foundations by assets, of the top ten
corporate givers by giving, none are located in Appalachian Ohio. The
corollary to where permanent assets are held is ``as to where grants
are made'' and by that measure, Appalachian Ohio is regrettably no
where high on the priorities of the "Big Ten" in Ohio no matter what
the brand or the origin of the philanthropic wealth may be. The
continued growth and expansion of community foundations and other forms
of organized philanthropy in the region is fundamental if the region is
to attract and build the permanent assets that can be used to help
communities in the region do the work of helping themselves.
The philanthropy gap in Appalachian Ohio is an issue that is of
concern to all our communities. It affects the extent to which a strong
nonprofit community can exist and flourish in Appalachian Ohio; it
affects the present and future sustainability of the organizations that
public and private grantmakers seed and grow; and it affects the
capacity of our communities to effectively network, collaborate, and
together work in relationships and with the array of resources needed
to accomplish results that are in the context of deeply rooted and
formidable barriers to change.
As a new form of venture philanthropy, the Foundation for
Appalachian Ohio is a convergence of public, private and community
resources focused on increasing the entire constellation of resources
with which to promote charitable giving toward the development of
communities throughout the region. Clearly, the scale and breadth of
what must be accomplished is the work of many hands and many
institutions in many places if the region is to reverse an historic
pattern of decline.
Implicit in the Foundation's vision is the value of partnerships
and collaborations in helping the region to do better by working
together. And while there are many old deficits with which the region
must reckon, it is the region's opportunities for positive change that
stimulated the Foundation's creation. There has never been, in our
estimation, a climate more favorable or the timing more fortuitous to
help Appalachian Ohio reach higher ground on a litany of old issues
that have troubled the region's economy; and for all time, to help the
region claim its equitable share in the prosperity of the State and the
nation.
There are strengths on which the region can build. Appalachian Ohio
is fortunate to have the committed presence of the approximately twenty
community foundations and the additional private sources of charitable
funds that now exist in and/or serve Appalachian Ohio. Other
communities are working hard to accomplish a similar charitable
presence in their areas. Seldom is there a need to convince community
leaders of the incalculable worth of a strong philanthropic partner in
helping to increase the bottom-line needed to attract and grow a
community's assets. At the Foundation, we believe philanthropic
resources need to be grown at two levels in Appalachian Ohio:
regionally, to help the region do better by working together; and
locally, to help local communities capitalize on their own individual
and unique opportunities. But building up a treasure chest for the sake
of the size of the treasure is a hollow pursuit if, at the end of the
day, that is all there is. At the heart of this enterprise is the love
of the region and the gift of giving. It is the people, the communities
and the relationships that foster improvement in the lives of families
and children in the region that is the embodiment of the spirit of
philanthropy. Philanthropy is, above all else, about creating
partnerships.
Sustainable development in poor and underserved communities
requires at its core a process involving the breadth and commitment of
diverse community partners public, private, and philanthropic. It takes
communities that work like a community together, with each other, for
each other, and for the long haul. The Foundation's presence is witness
to what can happen when the public sector works to leverage for all
time, the assets every community has hidden, waiting like diamonds to
be unearthed if the right people, the right partners, the right ideas,
and come together at the right time to make a difference.
Appalachian Ohio has had its fair share of palliatives that cured
nothing but remedied the symptoms. We believe the investment made in
the Foundation by the Appalachian Regional Commission is its signature
upon a crucial and timely recognition: indigenous, philanthropic
institutions are a crucial and needed partner if communities are to
have the capacity to build on and successfully leverage the
comparatively shorter term investments enabled by the ARC and the
public and private sectors. It is within the power and resources of
every community to invite and promote acts of charitable giving that,
in time, become permanent sources of regional endowment. We think the
region is on the precipice of something new, something exciting, and
something that will work.
For our purposes today, it would be impossible to consider the
likelihood of continued progress in making positive change without the
committed presence of and partnership with the Appalachian Regional
Commission. There are many places where it is making a deeply felt and
genuine difference in the lives of our region's citizens. The Federal
commitment to focus on the unique challenges of Appalachia gives
substance to the idea that Federal citizenship means something.
Appalachia's fortunes are indivisible from the fortunes of the nation.
The State of Ohio's unprecedented public investment of $1 million in
the Foundation signals a broad-based, public recognition that, for the
State of Ohio to truly prosper, prosperity must be broadly shared. It
is a principle and action that sets a new standard of engagement for
those who claim to be serious about the business of building community
no matter where they or the community might be. At its core are a
philosophy of abundance and a commitment of responsibility.
The Foundation supports the mission of the Appalachian Regional
Commission. The agency is a knowledgeable and seasoned practitioner in
the craft of what has and hasn't worked well in Appalachia. The focus
and benefit of that experience is beginning to bear fruit that has been
a long time in the making in Appalachian Ohio. This region and many of
its sister communities may have, for the first time, a genuine
opportunity to get their feet anchored and wholly planted in today's
modern economy. The Appalachian Regional Commission deserves much
credit for the opportunity that now illuminates the region's future
possibilities. It should be allowed to finish the job.
______
Attachments
Resources for the Region: A Model for Building and Sustaining Permanent
Investment Capital in Appalachia
Decades have passed since the original groundswell of interest in
Appalachia, more than a generation in fact. But, what has come about
once usually comes about again. And so it is with the rising tide of
interest in Appalachia these days.
We are experiencing interest and involvement from the private
sector, government, and foundations, and the media, among others. Each
has been urged to take its interest one step further and provide more
resources or provide resources more effectively in other words, to
invest more and invest more wisely in the Appalachian Region.
And yet, behind all the excitement and energy, something is
missing. We expect to invest more, but we have no comprehensive model
for achieving an even greater rising tide of resources and investment.
We expect to invest more wisely, but we have no measure of success that
values self-sustaining momentum and permanent capacity and assets,
objectives that prior efforts failed to realize. Consider three
conditions that may be holding us back, despite the renewal of interest
in and present wave of excitement and energy about Appalachia.
First, those of us who are focused on the Appalachian Region are
doing our work and fulfilling our commitment in isolation--working, if
you will, in our own silos from our turfs, as if each of us alone is
shouldering the entire burden.
Second, and related to the first, we are often looking to one
another with expectations that someone else can help, or what could be
worse, that someone else can provide us the resources to do our work.
Thus, government convenes foundations and hopes they can help. And
foundations look to government for funding philanthropic associations.
And both look to the private sector--financial institutions, utilities,
and other corporations--for investment capital. Seen this way, the
public, philanthropic and private sectors are each working to leverage
resources and investment capital from one another. Seen another way, we
are all fund raisers and we are all donors.
We need to realize that the problem is the size of the pot of
resources we are allocating--and that the pot is quite small. We need a
bigger constellation of resources and a larger universe of donors than
those that currently exist. Per capita giving and endowment levels vary
widely in Appalachian counties, but per capita giving and endowment,
private investment, and government spending are in the aggregate very,
very low. Focusing on philanthropy alone would unleash untapped
resources in the region that could help significantly in creating and
sustaining cycles of place-based community development that is
regionally-managed and ``owned.'' We might also discover that existing
resources and dollars could be more strategically applied.
Third, also related to the first and second, is the absence of
common ground or a civic space, free of the agendas embedded in
government, foundations, and corporations in which we might converse,
plan and work together on building investment and capital; raising
resources; and providing leadership for the Region. While some of us
have and provide more resources than others, and in that sense are not
equal, we are equal in our interest and in our intention.
Windows like this don't happen often. It is a continuum of
resources--private, public and philanthropic--that has the best chance
of succeeding in helping the region to build on its full array of
opportunities. We need to be able to link resources and capacity
together and separately in ways that can help actualize the right idea
at the right time in the right place with the right leadership.
Entrepreneurship and flexibility are key. Sufficient capital and
capable leadership, provided they are nimble, will effectively respond
to opportunities. But sufficient capital and capable leadership are
themselves insufficient because, in order to operate effectively, they
require preconditions like well-oiled working relationships and
established communication networks, heretofore lacking in the Region.
Were we to assume that the first, second, and third are right for
now, what institutional perspectives and cultures, aside from the
media, could be brought together for this conversation? What
``divides'' currently exist, with respect to the Region, might be
bridged in this uncommon yet common conversation?
a geographical divide between those inside and those
outside (the region)
a philanthropic divide between types of foundations and
foundation funds
an institutional divide between foundations, government,
and the private sector
a technological divide between those with technology and
those without technology
a digital divide significantly disadvantaging small to
medium sized businesses, rural communities, and philanthropic nonprofit
organizations (in the region)
a mission divide between private venture capital and
philanthropic venture capital (or between profit and not for profit
venture capital)
an income and wealth divide between those that have and
those that have not
a political divide between parties, partisans, and
political leaders
a cultural divide between developed and less developed
communities and between urban and rural populations
a racial and ethnic divide between persons white and
persons of color
a strategic divide between what can be politically
sustained in the short term and what must be practically accomplished
in the long term in persistently poor communities
Clearly, we could be building better bridges and creating a
conversation space between capital in its three forms--one, financial
capital (market investments, philanthropic grants); two, social and
human capital (leadership development, networking, constituency-
building, relationship development, service, volunteering), and three,
civic capital (leadership, engagement, participation).
We could be finding more ways to convene and create cross-
conversation between those inside and outside the Region who could be
investing in the Region.
We could also be addressing what may be no more than an unfortunate
consequence of language and metaphor--that we are unable to see how the
public sector (local, State, regional and Federal agencies and
political leaders), private sector (individual investors, investment
firms, financial service institutions and utilities), and philanthropic
sector (private foundations, community foundations, corporate giving
programs) are each, in their own way, from within or from without,
investing and providing resources to the Region. Borrowing a phrase
from Paul Newman as ``Cool Hand Luke,'' ``what we (may) have here is a
(not insignificant) failure to communicate.''
Seen broadly, where are the resources, ideas, and contributions for
this conversation?
Federal Agencies (Appalachian Regional Commission;
Departments; Federal Reserve
Congress
Governors and State Legislatures (including Office(s) of
(Appalachia)
Local Governments
Private Sector (Financial Service Institutions, Investment
Firms, Corporations, Individual Investors, especially Private Venture
Capital Firms)
Non-Governmental Organizations [for example, Ohio
Appalachian Development Fund, Corporation for Ohio Appalachian
Development]
Philanthropic Sector:
LGrantmaking Organizations (Corporate Foundations and
Giving Programs, Community Foundations, Private Independent and
Family Foundations)
Local and Regional Community Foundations
National/International Associations of Grantmakers
(Council on Foundations)
LThe Forum of Regional Associations of Grantmakers,
especially New Ventures in Philanthropy
LRegional Associations of Grantmakers (Council of
Southeastern Foundations, Atlanta and the Ohio Grantmakers
Forum, Columbus)
LOthers including the Aspen Institute, Rural
Development and Community Foundations Initiative (RDCFI),
Community Strategies Group
LThe Investment Fund for Foundations, Charlottesville
(TIFF)
Consider three ideas for bringing these caregivers and investors
together for a common conversation.
First is a project to develop a marketing campaign complete with
literature, web sites, speech material and so on focused on Ways to
Give and Invest in Appalachia and, for those within the Region, Ways
Appalachia Gives and Invests in Itself. Some themes, were alliteration
to be important, could be wealth, work and wisdom...or investment,
initiative and interest....or the more traditional, stewardship-
oriented time, treasure and talent. Possibilities for the ways to give
and invest could include:
Government investments
Private investments
Philanthropic grants and program-related investments
Investments from foundation endowments and portfolios
(asset allocations for community re-investing, venture capital)
Region-focused or advised and directed funds in
foundations
Planned gifts (lead and remainder trusts, estate and gift
planners, advisers, including the Planned Giving Design Center and
other information sources)
Newly-organized foundations (community foundations, family
foundations)
Citizenship, civic participation, leadership and
ambassadorship
Volunteer service (board service, advocacy; remaining true
to roots as especially sons and daughters of the region staying home,
coming home)
Second is a pilot project in one sub-region, perhaps Appalachian
Ohio, to develop and implement ways in which those inside and outside
the region and those from the public, philanthropic and private sectors
can better work together for the benefit of and increase their
investment in the region.
Third is a conference convened jointly by the public, philanthropic
and private sectors and community sectors and charged with addressing
these issues, building the relationships we need, and breaking new
common and uncommon ground.
Windows of opportunity like this don't happen often.
Statement of Daniel L. Neff, Executive Director, Ohio Mid-Eastern
Governments Association
Good Morning Mr. Chairman: Thank you for the opportunity to testify
before the Committee on Environment and Public Works Subcommittee on
Transportation and Infrastructure. I feel privileged to be given the
time to talk about a program--the Appalachian Regional Commission
(ARC)--which I believe has and continues to play a significant and
meaningful role in the development and growth of one of our nation's
most isolated and distressed regions.
Having been involved with the ARC in different capacities for over
16 years, I obviously come from a less than unbiased position about the
virtues of the program. Yet I believe that this experience, which
includes 4 years as your Alternate to the Commission, provides me with
some perspective about ARC which few would have. As an aside, it would
be remiss of me not to mention or to thank you Senator for the
opportunity that I had to serve your administration when you were
Governor. I have many fine memories of those years--especially in
working with your Lt. Governor, Nancy Hollister.
Under your leadership, a great deal was accomplished to improve the
economy and quality of life for the citizens of Ohio including the
residents of our 29 county Appalachian region of eastern and southern
Ohio. While much of this region continues to face levels of poverty and
economic and social distress that are above State and national
averages, statistics that were often in double digits are now typically
well below 10 percent . In particular, Jobs Bills I, II and III
continue to positively impact the State's economy and overall fiscal
well being. In Appalachia, the focus on developing rural industrial
parks in Jobs Bill III has had a significant impact on the ability to
attract new industry into the region. This, coupled with the resources
of the First Frontier Program enable our communities to more
successfully market these sites to the rest of the country and the
world.
Of course, it is my fervent belief that the ARC program is at the
core of much of the progress that has been made in Ohio Appalachia. The
``bottom up'' process of ARC funding coupled with the wide array of
eligible activities that can receive assistance truly does make it an
intergovernmental model that has not only proven to be extremely
successful but I believe is worthy of emulation in other geographic
areas of distress in the country. While the program's funding levels
have never been very high (Ohio's non-highway ARC funding has averaged
approximately between $4 to $4.5 million per year during the last
decade), it has, nonetheless, been able to leverage significant amounts
of other Federal, State, local and private sector support. Indeed, ARC
requires some level of matching funds in virtually all of the projects
in which it is involved. (ARC can fund up to 80 percent of a project in
a Distressed County and no more than 50 percent of a project in a
Transitional County. Ohio presently has 9 Distressed Counties and 19
Transitional Counties. Clermont County is defined as a Competitive
County and therefore eligible for no more than 30 percent of ARC
funding for a given project.) This requirement has enabled a little bit
of ARC money to go a long way.
ARC policy provides each of the 13 Appalachian States and their
governor a great deal of discretion in developing priorities and
determining how ARC funding will actually be spent. Ohio, I believe,
has one of the best systems in place to make those decisions. Through
the direction of the Governor's Office of Appalachia (GOA) and its
coordination with Ohio's 3 Local Development Districts (Buckeye Hills-
Hocking Valley Regional Development District in Marietta, the Ohio Mid-
Eastern Governments Association in Cambridge, and the Ohio Valley
Regional Development Commission in Waverly) the spending of the vast
majority of Ohio's ARC allocation is determined in large part through
decision making at the local level. This is accomplished through the
Board of Directors of each of the Local Development Districts (LDDs)
which are primarily made up of elected local officials.. While the
process varies with each LDD, each Board of Directors ultimately
prioritizes its projects and submits them to GOA. At that point, the
LDDs meet with GOA to determine the State's project funding priorities
for a given Federal fiscal year.
This structure helps to ``depoliticize'' the project selection
process and makes it more objective in nature. It supports the logic
that local officials know best as to what their needs and priorities
are . With limited funding from ARC and other Federal and State
sources, the process also takes advantage of LDD staff expertise in
helping to coordinate the overall funding package of any given project.
As a result, those projects which have most of the funding ``pieces''
in place and have been identified as priority projects for ARC
consideration can be moved ahead in a timely fashion.
The flexibility of ARC funding also compliments the locally driven
decision making process of the program. The following 5 goals that were
adopted by ARC provide an overall umbrella that is used to determine
project eligibility:
Goal one: Appalachian residents will have the skills and
knowledge necessary to compete in the world economy in the 215'
century.
Goal two: Appalachian communities will have the physical
infrastructure necessary for self-sustaining economic development and
improved quality of life.
Goal three: The people and organizations of Appalachia
will have the vision and capacity to mobilize and work together for
sustained economic progress and improvement of their communities.
Goal four: Appalachian residents will have access to
financial and technical resources to help build dynamic and self-
sustaining local economies.
Goal five: Appalachian residents will have access to
affordable, quality health care.
As can be seen, many types of activities can be accomplished within
the parameters offered by these goals. Again, it is then up to the
States and the local and regional partners within each State to develop
their strategies and ideas to ultimately determine what their funding
priorities will be.
While the ability to fund many types of projects is critical, it is
also important to note that the administration of the ARC program by
the agency's staff and the Federal Co-Chairman's office is not done in
a manner that many would consider to be ``typical Washington
bureaucracy.'' ARC has shown that it is a program that seeks to
simplify rather than to complicate. It does not try to operate under a
rigid or lengthy review and approval process that in many other
programs tend to frustrate and confuse the applicant. Indeed, perhaps
the most important thing that I can add in this regard is that
ultimately ARC operates with a programmatic mindset that seeks to find
ways to work with the States in order to get their priorities funded.
It does not search for ways to turn applicants away.
The flexibility of ARC can also be seen in the structure of the
LDDs. These organizations were established through the Appalachian
Development Act of 1965 as the ``local partner'' in the ARC
intergovernmental model. At present, there are 71 LDDs covering 406
counties within the 196,000 square miles that make up the 13 State
Appalachian region. With administrative financial support from ARC,
each LDD serve as a ``convener'' of local governments and organizations
within the area that they serve. Each organization seeks to ``assess,
plan, and facilitate action within their locality in efforts aimed
toward achieving the quality of life enhancement goals of the ARC.''
In addition, however, each LDD has its own particular role and
function within the area that it serves. In Ohio our 3 LDDs are
involved in numerous activities that seek to address economic and
social concerns that impact the counties and communities that make up
their district. These activities include the administration of
Revolving Loan Fund programs for small to medium sized business. In
Ohio Appalachia, ARC funds coupled with those from the Economic
Development Administration has resulted in almost 150 loans totaling
over $8 million which has brought about the creation of approximately
1,600 jobs.
Ohio's LDDs are also involved in international trade activities
that seek to encourage business and industry in the region to become
more involved with world markets. This not only involves direct
counseling but also includes participation in various trade events and
activities that help to benefit local companies. Buckeye Hills, OMEGA
and OVRDC (Ohio's 3 LDDs) have each been designated an International
Trade Assistance Center by Ohio's Small Business Development Center
(SBDC) program.
Another important function the LDDs have been involved with is
supporting the development of intermodal transportation plans that
would bring about increased economic development for our region.
Various projects have involved highway and rail enhancements along with
a project that would seek to better utilize the Ohio River for the
shipment of products. This project has received ARC funding of over
$50,000 and seeks to bring together public and private sector parties
from Kentucky, Ohio, Pennsylvania and West Virginia to develop a
regional marketing strategy that would attract industry that would
benefit from using the Ohio River as a transportation corridor.
Other activities that involve one or more of Ohio's 3 LDDs include:
administration of the Ohio Public Works Commission programs,
administration of an Area Agency on Aging program, participation in
SBDC counseling for those interested in starting their own business,
grantsmanship training and counseling for public agencies and non-
profit organizations, serving as a census and demographic affiliate for
the Ohio Department of Development and providing GIS services to member
governments and other interested parties.
As can be seen, the LDDs play a varied but important role in each
of the districts that they serve in Ohio Appalachia. With guidance and
direction from their Board of Directors, each LDD seeks to fill gaps
and voids in support and services that many of our communities in
Appalachia need but simply do not have the financial or human capacity
to accomplish.
In conclusion, it is my hope that this testimony has helped to shed
some light on important role that ARC plays in sustaining a unique but
most needed local, State, and Federal partnership that means so much to
many areas of this nation's Appalachian region. While it is not without
wart or blemish, the program has a proud history of meaningful
accomplishment throughout its 35-year history. It has proven to be an
effective program that has been a worthwhile investment of public
resources. However, while much has been accomplished, there is still
much more that needs to be done to help improve the quality of life for
much of the Appalachian region.
__________
Statement of Joy Padgett, Director, Ohio Governor's Office of
Appalachia
Good morning, my name is Joy Padgett, Director of the Governor's
Office of Appalachia (GOA).
I appreciate the opportunity to testify before you as Governor Bob
Taft's State Alternate. Governor Taft sends his regrets for not being
able to attend personally; however, he had this entire week scheduled
for almost a year.
I would like to welcome you Chairman Voinovich and members of the
Subcommittee to Appalachian Ohio. We appreciate that you chose
Nelsonville to serve as the site for this hearing as it truly
symbolizes the struggling communities in Appalachian Ohio that once
were thriving, bustling centers of transportation, mining,
manufacturing and industry. The resiliency of these communities is
self-evident as local residents are learning that solutions to
meaningful change must be initiated locally.
In my testimony, I would like to focus on an overview of the
Governor's Office of Appalachia, the socioeconomic status of the
Appalachian Region of Ohio, and the cultural uniqueness that exists
here.
OVERVIEW OF GOVERNOR'S OFFICE OF APPALACHIA
The Ohio General Assembly created the Governor's Office of
Appalachia (GOA) in 1988. The mission of GOA as it always has been is
to promote opportunities to achieve an improved quality of life for the
people of the Appalachian Region of Ohio. I am very proud to have
previous directors here who have mentored me throughout this past year.
The GOA manages the Federal ARC dollars and State matching dollars.
It serves as an advocate for the region by developing policy in
conjunction with other State agencies and it promotes specific projects
and proposals that originate from the region's residents.
The State of Ohio can only be as strong as each of its counties.
Realizing the validity of this statement, Governor Taft put forth a
plan in conjunction with the ARC to further development opportunities.
Some actions include:
Encouraging a holistic approach in dealing with the
distressed counties by asking each State department head to work with
the GOA as they re-examine their missions in relation to the special
needs of the distressed counties as well as across the Appalachian
Region.
Matching the Federal ARC dollars with State dollars. Sixty
percent of the Ohio match is targeted to distressed and at-risk
counties to further the ARC goals and to provide planning grants that
are largely focused on distressed communities.
Adding a Community Development Specialist to each of our
Appalachian Regional offices. This will provide more hands on technical
assistance for building community capacity.
Encouraging philanthropic investment in the Appalachian
region by providing a one million dollar challenge grant to the
Appalachian Foundation. This is a dollar for dollar match grant.
Appointing a Rural Revitalization Task Force that has
completed its hearings and is working with the Governor's staff to
develop a prioritized list of recommendations from throughout the
region. This has been an excellent opportunity for folks to come
together to identify regional issues and to offer solutions. A final
report is due in September.
Just as Dr. Jesse White described the unique partnership between
the Federal Government and the 13 States, GOA accomplishes its mission
through communication, cooperation and collaboration with the three
Local Development Districts (LDDs), the three Governor's Regional
Economic Representatives, the Ohio Department of Development and other
State agencies to aid local efforts in the five ARC goal areas
including: (1) Education (2) Physical Infrastructure (3) Community
Capacity (4) Dynamic Local Economies, and (5) Health Care.
Representative Nancy Hollister will describe in her testimony the
history of ARC's involvement in Ohio since 1990 and discuss projects
within each of the goal areas.
I cannot stress enough the strong relationships and partnerships
that have evolved into our T.E.A.M. approach of Together Everyone
Accomplishes More.
OVERVIEW OF APPALACHIAN OHIO
Due to our limited time today, I have attached a few documents
describing Ohio's Appalachian region. The first is from Ohio's Fiscal
Year 2001 State Strategy Statement detailing the socioeconomic status
of the Appalachian region. The second provides a snapshot of the status
of our distressed counties and the final document outlines Ohio's
progress on the Appalachian Development Highway System.
With a population of 1.5 million (based on 1998 population
estimates), Appalachia Ohio represents only 13 percent of Ohio's total
population of 11.3 million. The region, however, makes up one-third of
the State's total geographic area. Of our 29 Appalachian counties
stretching from Columbiana County in Northeastern Ohio to Clermont
County in Southwestern Ohio, ten are considered distressed (Adams,
Athens, Gallia, Jackson, Meigs, Monroe, Morgan, Pike, Scioto, and
Vinton.) Six counties are considered at-risk of becoming distressed
within the next year including Belmont, Guernsey, Harrison, Lawrence,
Noble and Perry counties.
CULTURAL UNIQUENESS
As Director of the GOA, my personal number one goal is to shatter
the misguided perceptions that Appalachia as a region cannot thrive
economically.
A step back into the cultural history of Appalachian Ohio shows
that during the late 1700's until the 1870's, migration through the
Cumberland Gap into Southeastern Ohio occurred in small numbers of
people that did not settle into towns or communities but on mountains
and near streams, therefore there was not an early-on structured
religious tradition or organized school system. This created a lack of
generational knowledge of institutions which is still an influence
particularly in communities where only a generation ago the coal
companies controlled all structured activities including political,
religious, health care, and educational activities. Only recently have
remaining residents come to realize that decision-making requires their
direct participation through visioning, leadership training, and
community capacity building.
Building civic capacity is even more important in those communities
where industries have left and eroded the tax base. From 1999 through
2001, we calculate that 5,667 direct jobs or 22 percent of the total
manufacturing employment in ten of our 29 counties will be lost. Please
refer to the ``Job Loss Chart'' at the back of your packets.
Folks in many of these communities believe it is not even remotely
possible to make life better. Often as I travel and listen, people are
surprised when I respond that we have programs to teach them ``how to
fish''. Recently, I met with five mayors from small communities on the
Ohio River to talk about untapped opportunities. By 9:00 a.m. the next
morning, two of them had called and are now ``rollin' on the river''.
More will follow them.
ARC is about hands-on facilitation. Many communities have
difficulty with the 20 percent or more match. We are working creatively
to make sure that the old adage of ``where there is a will, there is a
way''. ARC provides the gap financing that leverages other resources.
This financing often makes the difference as to whether a project is
first doable, but secondly sustainable. Communities whose citizens have
very high LMI (Low-to-Moderate Income) cannot afford operating and
maintenance fees without significant up-front capitalization costs
covered in the form of grants.
Senator, these people really do understand your slogan of ``doing
more with less''. Appalachian Ohio represents citizens who work hard
and play fair and yet have missed the rewards of a vibrant economy.
This may be the result of the extractive industries for which we
are known . . . coal, oil and gas, and timber.
The ARC is providing opportunities for putting back much of what
has been extracted. It is not about giving away fish, but teaching
citizens of character how to fish.
The ARC five goal area structure assists communities who choose to
do something about their problems. Later testimony will discuss the
role of the Local Development Districts as they identify, assist, and
trouble-shoot selected projects.
Our additional State funds will enable us to fund projects this
coming year that have had difficulty making it to the top due to lack
of dollars. Examples would include Community Health Access Program
(CHAPs) demonstration project targeted at screening of diseases such as
diabetes, high blood pressure, and cholesterol. Another example is a
full-scale Appalachian Community Learning Program (ACLP) for community
capacity building.
These are both high priority projects for me.
CONCLUSION
My major complaint about the ARC and the LDDs is that they refuse
to claim their bragging rights. The good stories haven't been told
nearly enough about the positive differences in so many places. I agree
with Yogi Berra who said, ``If you did it, it ain't braggin'!!! ''The
ARC has done a great amount of good for a great amount of people over a
great amount of time. It is important that the unique relationships and
partnerships that have been created continue.
Thank you, Senator Voinovich and others for the opportunity to tell
the story.
__________
Statement of Richard J. Platt of Alliance 2000, Steubenville, Ohio
First of all. Welcome, Chairman Voinovich and distinguished
committee members, to Appalachian Ohio. I will truly be brief because
the point I wish to make is a simple one. It's been said by others, and
I'll repeat, there is unfinished business in Appalachian Ohio. The
Appalachian Regional Commission has helped us but the work here is not
done.
I was asked to speak about the role of the Appalachian Regional
Commission in developing an industrial park project. I am the director
of a small, private non-profit development firm serving Jefferson
County, Ohio.
In Jefferson County, in 1997, officials of one of our existing
distribution-related businesses came to us seeking sites for a more
than doubling of its existing warehouse space. It employed over 100
people here. When the CEO came to see what we were calling our
Industrial Park, all we could show him was an open field. The water and
sewer was not there. The only road was a narrow county road not ready
for heavy trucks. We had just secured funding commitments for
installing public improvements, but we were still months short of
starting construction. Our industrial park was ``unfinished.''
If he was to build his large warehouse there, he had to take our
word on it.
He didn't. It's understandable. Not too many businesses can be
expected to make multimillion dollar decisions based on an economic
development guy's sales pitch or the county commissioners' promise to
bring water and sewer to its site. Instead, the firm moved to a
competing industrial site in Weirton, West Virginia where two years
earlier funding helped to get that counties' open field "finished" and
truly prepared for development. It was ARC funding that got that West
Virginia Industrial Park ready to go.
This story isn't sour grapes though. It's a story that illustrates
the difference between a community where the ARC funding was involved
and one where it wasn't.
Today, with ARC, funding which helped to leverage other Federal and
State funding, we have an industrial park of our own--93 acres with
water, sewer, three-phase power, and widened roads. The park is 1.5
miles off of four-lane US Route 22 with no stop lights for the 35 miles
east to Pittsburgh International Airport. Our park's infrastructure was
completed late last year, a spec building completed this Spring, and a
flex space building expected to start construction next year. We hope
to accept our first permanent tenant soon.
ARC's $300,000 grant for public infrastructure improvements was
matched by Economic Development Administration (EDA) funding
($926,000), State of Ohio grant money ($500,000) and local funding too
($500,000). That 12 percent funding was the difference between a Park
that was unfinished and one that was finished--truly ready to go. We
are now equipped to retain our existing businesses while seeking to
attract businesses that want to access markets from our location.
Additionally, the Ohio Mid-Eastern Governments Association, the
local development district that supports Jefferson County and others in
Eastern Ohio, was a useful provider of grant support and advice. The
Governor's Office of Appalachia was there to help pull it together too.
Now that it's complete, ARC funding is helping us market the Park too.
The completion of the Park, though, does not mean we are finished.
And I think our story in Eastern Ohio is true in many other parts of
Appalachia too. We have more important work to get done.
Thanks in part to ARC, there are now industrial parks dotting most
of Eastern Ohio's counties between Columbus and Pittsburgh. When you
widen the view from our one county to a twelve-county corridor between
Pittsburgh and Columbus, you see though, that the dots aren't
connected.
There are five key projects that need to be completed. Please see
the exhibit map.
The highways that link Pittsburgh and Columbus, chiefly US Routes
22 and 36, need to be connected. One project is just 12 miles between
Coshocton and Dresden and the other is 28 miles connecting US36 and
US22 between Newcomerstown and Cadiz. These two projects would connect
many of the ARC-funded industrial parks to a viable corridor.
Other modes of transportation remain critical as well. The Ohio-
owned Panhandle railroad line which once ran between Pittsburgh and
Columbus is doing well again. It needs to be ``finished,'' though, by
reconnecting Cambridge and points South to the line at Newcomerstown.
We need to assist in refurbishing the best connection the Panhandle
makes to the Ohio River where the Warrenton River Terminal provides a
way to get Ohio-made goods on to the River and to global ports of
entry.
Five key projects--16 miles at Coshocton, 28 miles at
Newcomerstown, 20 miles of railroad at Cambridge, 15 miles of railroad
at Rayland, and an upgraded Warrenton River Terminal--are central to
finishing some of the unfinished business of Appalachian Ohio.
Of the twelve counties on this three-State, Pittsburgh-Columbus
Corridor, ten are Appalachian counties. Connecting the dots in
Appalachia. That's what its about. And its no different in Appalachia
than elsewhere.
In Columbus, the $127 million Franklinton Floodwall has been a
mostly federally-funded project. It gets Federal funding on the premise
that it will help economic development for the residents of a part of
Columbus. The projects I've mentioned benefit economic development for
a whole region.
In Cleveland, they want $4 billion in mostly Federal funds to
finish their airport and gain access to International flights. We need
considerably less than that to connect Eastern Ohio with daily direct
flights to London, Frankfurt, and Paris out of Pittsburgh International
Airport. The projects I've mentioned will do that.
We don't begrudge Columbus or Cleveland or cities where Federal
funds have helped to make them more competitive. In Appalachia, funding
flows a different way. That's all. We get it through ARC. ARC's work is
not done because their remains unfinished business in Appalachian Ohio.
Thank you.
__________
Statement of Bob Proud, Clermont County Commissioner and Chairman of
the Ohio Valley Regional Development Commission (OVRDC)
Good morning, my name is Bob Proud, Clermont County Commissioner
and Chairman of the Ohio Valley Regional Development Commission,
(OVRDC). As chairman of the OVRDC, I appreciate the opportunity to
address you Senator Voinovich and the members of the Subcommittee on
Transportation and Infrastructure of the Committee on Environment and
Public Works. OVRDC is one of Ohio's three Local Development districts
(LDD's) representing southern Ohio, which includes eleven ARC eligible
and twelve EDA eligible member counties with a total population of
646,000 (1999 estimate). Our district also includes six ARC-designated
distressed counties: Adams, Gallia, Jackson, Pike, Scioto and Vinton,
with a combined population of 216,311 (1999 estimate). The 1995 median
annual household income for the OVRDC region is $27,972 and for some of
our distressed counties this figure is as low as $23,000. This compares
to a 1995 median annual household income for Ohio of $35,022. (For more
detailed socio-economic data on the region, see Attachment I OVRDC
Counties profile).
OVRDC, as a Local Development District, plays a crucial role in
developing successful ARC projects in our region. The planning and
project development process is very much a ``bottoms up'' grass roots
planning process. Annually, each of our counties has a county caucus
meeting, whose membership includes local elected officials,
commissioners, and key non-profit and economic development groups. Each
caucus decides on its priority development needs and projects for the
year. These top county projects are then reviewed and ranked by OVRDC's
Project Review Committee and ratified by the Executive Committee in
order to develop a regional project package to submit to the Ohio
Governors Office of Appalachia (GOA). OVRDC and the other two Ohio
LDD's then meet with the GOA and the Governors regional development
representatives to compile the annual Ohio ARC Project Package. OVRDC
staff then assist local projects listed in the State package in
completing their ARC applications.
ARC's distressed county program and grant investments in OVRDC's
distressed counties have done much to improve the infrastructure and
quality of life for many residents in the region, bringing safe
drinking water and eliminating ground water pollution. ARC investments
in Pike County, for instance, have enabled over fifty miles of water
lines to be extended to many rural residents, who had no reliable
access to safe drinking water. The story is the same in our other
distressed counties, such as Adams and Vinton, where hundreds now
receive reliable public water who didn't previously. ARC grant funds
more recently have enabled many financially strapped villages to
improve or construct new wastewater treatment systems and correct
potentially serious ground water contamination problems. We have
several villages, such as Centerville in Gallia County and Beaver in
Pike County, who with ARC assistance are in the process of building
wastewater projects.
Summarizing the overall figures for ARC distressed county grants
for the OVRDC region for the last four years (1996-1999) will give some
idea of the significant impact that this assistance has had on
improving the quality of life of our region's residents. During this
period, ARC grants to OVRDC distressed counties amounted to $5,476,992
for water and sewer infrastructure improvements. These ARC grants
leveraged over $27,692,000 in other funds to make possible new water
and wastewater services for 2622 residents, who did not previously have
them.
For instance, a Lucasville sewer extension grant in Scioto County
of $200,000 leveraged an additional $375,000 that brought wastewater
service to 90 new households. (For a further breakdown of distressed
county grants and basic information on five recent projects, please see
Table I attached)
The regions economic development problems will be further
exasperated by the recent announcement by the United States Enrichment
Corporation (USEC) that they will close the Piketon uranium enrichment
plant in June 2001. This proposed closure would terminate approximately
1500 highly skilled jobs. Additional Federal assistance will be needed
in the near future to help the region plan and adapt to the potential
severe economic impact, especially in the distressed counties of
Jackson, Pike, and Scioto.
The situation is better in our five other ARC counties, (four
transitional and one competitive) due to continued population and
economic growth over the last ten years, including new plants and
expansions.
Five of OVRDC's fastest growing counties are those counties closest
to the growing metropolitan areas of Cincinnati and Columbus and served
by limited access highways built in part through ARC assistance. These
are Adams, Brown, and Clermont counties served by S.R. 32 from
Cincinnati and Pike and Ross counties served by U.S. 23 from Columbus.
The availability of limited access highways has provided a very
important foundation for their growth. Jackson County, which also has
good highway access, has shown significant growth in population and in
business expansions.
ARC grant assistance has been critical in providing the necessary
infrastructure improvements to support these new industries and
expansions in our non-distressed counties. Key expansion projects
include: the Wards Corner access road, supporting the location of a new
International Paper facility in Clermont County; (600 jobs), the Mount
Orab new water tower in Brown County supporting an expansion of the
Cincinnati Milacron plant; the new water treatment plant in
Chillicothe, supporting the expansion of Kenworth Truck and the Jackson
access road that supported an expansion of Merilatt Industries and a
new McCarty facility. Recent plant closures in Lawrence County have
created a greater need for ARC assistance to develop a major new
industrial park in the coming year to help the community recover.
ARC grant funds have supported infrastructure for industrial
expansion in some of our distressed counties as well. Recent projects
include: the New Boston (Scioto County) rail spur which supported Osco
Industries new plant; (100 new jobs), infrastructure to the new Gallia
County industrial park, which has so far created 58 new jobs and
infrastructure to the Zahns Corner industrial park in Pike County,
which has so far created 100 new jobs. Without this crucial ARC grant
assistance, most of these projects would probably never have developed
because our communities do not have the financial resources to replace
these lost grant funds. A summary of all the region's ARC area
development grants over the last four years shows that they
collectively created over 2,100 new jobs and retained over 1600 jobs,
and that they leveraged from 3 to 7 dollars in other funds for these
projects. (For a summary of recent area development projects and
information on five selected projects, see attached Table II).
Since a well trained labor force is critical for development,
improvement of the region's education and training system has been a
consistent OVRDC, as well as ARC goal. Over the last ten years, several
ARC education/training projects have been approved, which have allowed
our colleges and vocational schools to modernize their equipment to
provide more state-of-the-art training in electronics, computers, auto
mechanics and other areas, such as distance learning.
One of OVRDC's recent significant education projects is the 1996
ARC grant of $146,015 to the U.S. Grant Career Center in Clermont
county. This grant assisted in the development of an audio-video
interactive conference center and a 25-station computer lab in the
school's new wing. The computer lab has been a vital resource for basic
skills remediation for students needing to pass the Ohio 9th grade
proficiency test, allowing them to progress at their own speed with
customized software.
The Keith W. Boys Conference Center has already brought several
videoconference training sessions to students, as well as area
residents. OVRDC has used the school as a site for several video
training conferences sponsored by ARC and the Development District
Association of Appalachia (DDAA). On May 19, 2000, OVRDC used the
Conference Center as one of four United States sites (three Appalachian
Development Districts and ARC Washington) in an international video
conference that connected two sites in Northern Ireland. The conference
included community and economic development professionals in both
countries, who shared background information and insights on
development needs and activities. In addition, Clermont County
businesses such as Cincinnati Milacron, U.S. Precision Lens and Spirit
of America National Bank have used the facility. (For more information
on this grant see the attached ARC Project Profile).
An additional resource provided by OVRDC in order to help address
the need for more accessible equity capital for small business
development in the region is our ARC revolving loan fund. This loan
fund was originally established and has been recapitalized by ARC grant
funds. During the 14 years that our loan fund has operated, OVRDC has
made 24 loans totaling $1,623,089. These loans have enabled local
businesses to expand and create 138 total new jobs and retain 859 jobs.
One example of a recent loan is a $50,000 loan to Greenfield Products,
which enabled them to purchase equipment and expand their operation and
thereby add 23 new jobs. (Please see Table III for summary information
regarding these 24 loans).
OVRDC also offers several other services that assist in the
development of southern Ohio, including: administration of the regions
Ohio Public Works Commission infrastructure assistance program, the
provision of export assistance to the regions businesses, assistance in
developing Economic Development Administration projects, and assistance
in planning and securing financing for other priority projects. (For
more information on OVRDC and the types of assistance offered, see
Attachment II, OVRDC Summary of Services).
KEY NEEDS FOR THE OVRDC REGION
Even though ARC investments over the last couple of decades have
had a significant impact on the region, the region still lags behind in
having the basic infrastructure, developed industrial sites, the
community capacity, and the business assistance capacity to compete
successfully with the rest of the nation.
In closing, I would like to outline some key needs for which
continued Appalachian Regional Commission assistance is needed.
1. ARC assistance and Federal Highway Trust Funds are needed to
complete the limited access Appalachian Highway Corridors B and C
through southern Ohio (limited access from Columbus to the Ironton
area).
2. Funding for industrial park development and infrastructure.
3. Funding for the planning and development of business incubator
facilities and services.
4. Assistance in increasing the region's access to equity and
venture capital for new business start-ups and expansions.
5. Funding is still needed for poor communities to be able to
extend safe and reliable drinking water to many residents.
6. Funds are needed to assist small communities build new
wastewater treatment systems or to upgrade seriously inadequate
systems.
7. Since many communities do not have the financial resources to
even assess their basic infrastructure needs, OVRDC urges that ARC set
aside planning funds for grants to distressed counties and communities
to undertake such feasibility studies.
8. Assistance and funds are needed to improve the basic electronic
infrastructure to the region, as well as improve the region's access to
the Internet and video conferencing and distance learning.
9. It is recommended that the current 30 percent set-aside in ARC's
budget for distressed counties be increased because of the extent of
the need.
OVRDC and I would like to thank you Senator Voinovich and the
members of the Subcommittee on Transportation and Infrastructure for
giving us the opportunity to discuss the importance of recent and
continued ARC assistance to the southern Ohio area.
Table I.--OVRDC Region Overview of ARC Distressed County Projects 1996-99
Combined Statistics for All Projects By Year
----------------------------------------------------------------------------------------------------------------
Estimated
Funds Total No. of New
Fiscal Year ARC Funds Leveraged Project Cost Residents
Served
----------------------------------------------------------------------------------------------------------------
1996........................................................ $1,644,749 $8,273,669 $9,918,418 180
1997........................................................ 1,193,620 5,206,710 6,400,330 410
1998........................................................ 1,164,603 4,610,100 5,774,703 1286
1999........................................................ 1,474,020 9,602,200 11,076,220 846
----------------------------------------------------------------------------------------------------------------
Statistics on Selected Projects
----------------------------------------------------------------------------------------------------------------
Linear Funds Fiscal
Project Name No. Served Feet ARC Funds Leveraged Year
----------------------------------------------------------------------------------------------------------------
Pike Lake Road Waterline............................... 25 households 10,500 $136,000 $34,000 1998
Walls Road Waterline................................... 25 households 10,300 67,200 16,800 1997
Lucasville Phase 4 Sewer............................... 90 households 11,000 200,000 375,000 1997
West Ports. Phase 7 WWT................................ 290 customers 26,000 200,000 1,017,000 1996
County Road 8 Waterline................................ 52 households 25,000 200,000 52,150 1997
----------------------------------------------------------------------------------------------------------------
Table II.--OVRDC Region Overview of ARC Area Development Projects 1996-99
Combined Statistics for All Projects By Year
----------------------------------------------------------------------------------------------------------------
Other $
Fiscal Year Jobs Jobs Leveraged/ Cost/ ARC $/
Created Retained ARC $ Job Job
----------------------------------------------------------------------------------------------------------------
1996............................................................. 1018 904 7 4409 546
1997............................................................. 25 0 3 28000 8000
1998............................................................. 905 0 4 4277 839
1999............................................................. 190 730 3 3645 982
----------------------------------------------------------------------------------------------------------------
Statistics on Selected Projects
----------------------------------------------------------------------------------------------------------------
Jobs Jobs Funds Private Fiscal
Project Name Created Retained ARC Funds Leveraged Investment Year
----------------------------------------------------------------------------------------------------------------
Zahn's Corner Ind. Park................. 100 n/a $400,000 $1,960,694 1998
Gallia County Ind. Park................. 58 n/a 250,000 1,930,000 1996
New Boston Ind. Park Rail............... 100 224 300,000 199,000 $15,000,000 1996
Wards Corner Access Road................ 693 367 250,000 785,000 67,500,000 1996
S. R. 93 Alt. Ind. Park................. 420 n/a 132,200 794,320 975,000 1998
----------------------------------------------------------------------------------------------------------------
Table III.--OVRDC Region Overview of ARC Revolving Loan Fund Projects
1986-2000
OVRDC ARC RLF History, Combined Statistics for All Loans
------------------------------------------------------------------------
------------------------------------------------------------------------
Number of Loans........................................ 24
----------------
Total RLF Dollars Loaned............................. $1,623,089.20
Jobs Created........................................... 138
Jobs Retained.......................................... 859
Private Funds Leveraged................................ $5,143,545.00
RLF Dollars Per Job.................................... $1,627.97
------------------------------------------------------------------------
Projects Receiving ARC Loans by Business Status
------------------------------------------------------------------------
Types Number Percent
------------------------------------------------------------------------
Startups........................................ 8 24%
Retention....................................... 2 10
Expansions...................................... 14 66
-----------------------
Total....................................... 24 100%
------------------------------------------------------------------------
Businesses Receiving ARC Loans by Business Type
------------------------------------------------------------------------
Types Number Percent
------------------------------------------------------------------------
Industrial...................................... 7 41%
Commercial...................................... 8 28
Service......................................... 9 31
-----------------------
Total....................................... 24 100%
------------------------------------------------------------------------
ARC PROJECT PROFILE
Grantee: U.S. Grant Career Center, Clermont County
Use of funds: Video Conference Equipment and Computers
ARC Funds = $146,015 (FY 1996)
State of Ohio = $106,491
Applicant = $102,464
Total = $354,970
Grant Career Center's Keith W. Boys Business and Industry
Conference Center serves Clermont County as well as Brown and Adams
Counties. The purpose of the facility is to bring educational
instruction for both high school and adult students and business,
industry, and government in the following areas: management, human
resources, customer service and sales training, communications, small
business and financial planning, entrepreneurship, and employability.
This system enables full access to the information highway through an
interactive audio, video, and data network in Clermont County and
surrounding Western Ohio Appalachian counties.
The Grant Career Center satellite down-linked audio-video
conference center and 25 station computer resource lab help in
remediation for students needing to pass the 9th grade proficiency test
with customized software training. The conference center and computer
lab are linked to share information. Educational access opportunities
have been maximized with great success for students and business.
Listed below are users/uses (not inclusive) of the video conference
center.
Ohio School Net--Video Conference
Bethel-Tate High School Employees--Computer Training
United Way--System Use
HUD Meeting, Congressman Rob Portman
OVRDC Interactive Video Conference with Congressman Rob Portman and
ARC Co-chairman Jesse White in Washington D.C. and vocational students
from the region
Clermont County Sheriff's Department--Staff Computer Training
Clermont County Educational Service Center--System Use
U.S. Precision Lens--Video Conferences
Ohio Supreme Court Justice Evelyn Stratton--Video Conference and
Grant Social Studies Students
Interactive Video Conference with Fernald Plant, Grant, and
Anderson High School Students as experiments were done and discussed.
Interactive Video Conference with Newport Aquarium and approx. 75
other schools in Ohio regarding the ``Jason Project''.
OVRDC Video Conference with Northern Ireland.
Introducing the OVRDC
The Ohio Valley Regional Development Commission is a public
regional planning and economic development agency that coordinates
Federal, State and local resources to encourage development in twelve
southern Ohio counties: Adams, Brown, Clermont, Fayette, Gallia,
Highland, Jackson, Lawrence, Pike, Ross, Scioto and Vinton.
Established in 1967 as a not-for-profit corporation, the OVRDC was
designated by the State of Ohio in 1977 as a Regional Planning and
Development Organization. The OVRDC also serves as a Local Development
District for the Appalachian Regional Commission and as an Economic
Development District for the U.S. Department of Commerce, Economic
Development Administration.
The OVRDC is governed by a Full Commission of more than 150
officials who meet semi-annually. Members include representatives of
county and local governments, social service and educational
organizations, minorities and the private sector. Membership in each
county is referred to as a County Caucus. This Caucus serves as the
forum for local project planning.
Routine oversight of the OVRDC is provided by an Executive
Committee with representation from all twelve OVRDC counties;
Portsmouth and Chillicothe; and the business/education/minority
community. The Executive Committee's monthly meetings are open to the
public.
The OVRDC receives financial support from a combination of Federal
and State grants and local service contracts. Member counties also pay
annual contributions to the OVRDC, with contributions based on each
county's population.
This attachment briefly summarizes the services offered by the
OVRDC.
______
Development Planning Assistance
The OVRDC helps localities plan and secure funding for development-
related projects such as construction, repair or upgrade of roads,
bridges and water and sewer lines, industrial park development, as well
as projects related to community services, education and workforce
development. Staff offer expertise in dealing with the following
funding sources:
Appalachian Regional Commission.--The ARC is a multi-state
commission, which fosters development in Appalachia. Eleven of the
OVRDC's twelve counties (all but Fayette) lie within the Appalachian
region. ARC funding can assist with a wide variety of project
activities in the areas of education, infrastructure, civic leadership,
local economies and health. As a Local Development District, the OVRDC
provides guidance in the application process, assistance in project
packaging and in securing funding and participates in assembling the
State of Ohio's ARC investment package.
Economic Development Administration.--A part of the U.S.
Department of Commerce, the EDA provides funding for job-creation
projects in distressed areas around the nation. Assistance can also be
provided to communities with plant closures and to industries affected
negatively by international trade. The OVRDC is a designated Economic
Development District, serving as a liaison between the EDA and eligible
applicants in the district, and assists with EDA projects.
The OVRDC submits a Comprehensive Economic Development Strategy
(CEDS) annually to the EDA. This CEDS assesses the district's strengths
and weaknesses and identifies short- and long-term development
priorities. Any potential project seeking EDA assistance must be
identified as a priority in the CEDS in order to receive funding
consideration.
Ohio Public Works Commission.--The OVRDC coordinates this
state-level grant/loan program, (also known as the State Issue 2
program), for the District 15 Public Works Integrating Committee (all
OVRDC counties except Clermont). Eligible projects include the
construction, repair or replacement of roads, bridges and water and
wastewater infrastructure. The OVRDC also coordinates the Local
Transportation Improvement Program, which funds eligible road
improvement projects using proceeds from the State gasoline tax.
Community Development Block Grant Program.--OVRDC staff
can provide financial packaging assistance with projects involving
Community Development Block Grant funding. Examples of eligible
projects include, but are not limited to, the development or upgrade of
local parks and community centers; sewer, water and road projects that
protect public health and safety or create jobs; downtown
revitalization; or the acquisition of fire and rescue facilities and
equipment. For an administrative fee, OVRDC staff can help subdivisions
develop and administer CDBG program applications.
USDA Rural Development.--OVRDC signed a Partnership
Agreement with the State Rural Development office in 1998. OVRDC staff
can assist local communities and organizations in better utilizing the
Rural Development grant and loan programs, including community
facility, water and sewer and business assistance programs.
Other Infrastructure Planning Assistance.--OVRDC staff can
also advise subdivisions that wish to apply to other infrastructure
funding sources such as the Ohio Water Development Authority and the
Ohio Department of Development. Assistance with other funding sources
may also be available; contact the OVRDC office for more information.
SMALL BUSINESS ASSISTANCE
Low Interest Financing.--The OVRDC offers two low-interest
Revolving Loan Fund programs to provide gap financing for small
businesses seeking to start up or expand in the district. The two RLFs,
capitalized by the ARC and EDA, support private businesses that create
or retain jobs. The OVRDC also helps small businesses find other
sources of capital for their start-up or expansion needs.
Marketing Assistance.--The OVRDC provides marketing
assistance to small and mid-sized businesses in the district, helping
them grow in both domestic and international markets. Participating
companies receive regular trade opportunity notices and assistance in
developing export markets for their products. OVRDC staff can also help
companies analyze their export-readiness and marketing strategies.
Other Entrepreneurial Assistance.--Thanks to an ARC
Entrepreneurial grant, OVRDC staff will offer mini grants and business
counseling and other critical assistance for new or expanding
businesses. Such assistance for new businesses includes legal,
financial, marketing and engineering related assistance.
DATA AND MAPPING
As a regional data center affiliated with the Ohio Department of
Development's Office of Strategic Research, the OVRDC maintains a
comprehensive data base of national and State economic and demographic
statistics, including U.S. Census information. Frequently requested
data are compiled in easy-to-use profiles for each member county and
for the entire district. In addition, the OVRDC maintains a data base
on available industrial and commercial sites and buildings in the
district.
These data resources and the agency's geographic computer mapping
services are available to communities, businesses and the general
public upon request. A reasonable processing fee may be charged.
STRATEGIC PLANNING
The OVRDC offers its strategic planning expertise to member
counties and communities. Staff can meet with local leaders to explain
the strategic planning process and how to adapt it to a community's
needs.
The OVRDC released its revised Strategic Plan in 1997 to guide the
district's development efforts over the next 5 years. The agency
routinely incorporates plan elements into its work programs and seeks
to make the plan a responsive document that reflects the district's
ever-changing opportunities and challenges.
INTERGOVERNMENTAL REVIEW
The OVRDC is a designated Areawide Clearinghouse in Ohio's
Intergovernmental Review Process. The OVRDC coordinates a preliminary
review of most applications requesting Federal funds. The review is
intended to ensure that projects will not duplicate existing services
or facilities and that those who might be affected have the opportunity
to offer their input on a proposal. The OVRDC's Executive Committee
serves as the review committee.
TRANSPORTATION PLANNING
The OVRDC began the process of major highway corridor
transportation planning in 1998. The agency participated in the U.S. 23
corridor study and has assisted in the U.S. 35 corridor study. Various
corridor maps, plans and data are available for a fee upon request.
OVRDC will continue to offer planning and implementation support to the
corridor committee and other priority projects.
DEVELOPMENT LAND USE ANALYSIS
Using the resources available in the agency's Geographic
Information System and local knowledge, staff will perform an analysis
of the land's physical suitability to support various types of
development. The end product of such an analysis is a development
potential map: areas are classified into several categories of
suitability for different types of development based primarily on
physical characteristics of the land. The suitability analysis and
greenway planning services are offered on a contractual basis.
HOW DO PROJECTS BECOME PRIORITIES?
OVRDC staff are ready to assist you with questions regarding
potential local projects. All local projects are presented to the local
county caucus annually in order to be prioritized by the county caucus.
OVRDC's Regional Project Review Committee then meets annually to review
the priority county projects and to approve a regional project package.
These projects are ranked objectively based on their urgency of need,
readiness, economic impact and other factors.
__________
Statement of Jesse L. White, Jr., Federal Co-Chairman, Appalachian
Regional Commission
Mr. Chairman. Thank you for the opportunity to appear before the
Subcommittee to discuss the work of the Appalachian Regional Commission
and to share with you our story of having worked with the Congress to
turn around and revitalize this agency. I'm particularly pleased that
you have chosen to hold this hearing in the heart of Appalachia.
Southeast Ohio shows both the tremendous payoffs of prior ARC
investments and the continuing need for the Commission's assistance--
assistance that can help create self-sustaining local economies among a
proud and resilient people who are struggling to accommodate the
sweeping changes spawned by technological innovation and globalization.
This hearing affords us a chance to review how ARC's programs
respond to the economic development challenges facing rural communities
and small towns in Ohio and across Appalachia. We hope it will also lay
the groundwork for ARC's reauthorization early in the next Congress.
ARC OVERVIEW
Congress established the ARC in 1965 to bring roughly 400 counties
in the 13-State Appalachian Region into the mainstream of the American
economy, to make these 22 million people and their hundreds of
communities contributors to, rather than drains on, the national
resources. Through its flexible programs, ARC helps equip communities
with the basic building blocks of economic development: a trained and
educated workforce, basic infrastructure, local leadership and civic
capacity, entrepreneurial local economies, and access to health care.
The Commission represents a unique partnership between the Federal
Government and the 13 States we serve. The Federal Co-Chairman of ARC--
appointed by the President and confirmed by the Senate--has one half of
the votes on the commission and the 13 governors have the other half.
No policy can be set or any money spent unless the Federal
representative and the governors reach agreement. The ARC model
represents neither the dictation of policy from Washington nor the
abdication of policy to the States; rather, it is a joint policymaking
model that yields true collaboration.
The ARC story is one of substantial progress in giving Appalachia a
full seat at the table of America prosperity. When we were created in
the 1960s, 219 of our counties were economically distressed. Today that
number has been cut roughly in half. Other indicators also show marked
improvement: the infant mortality rate has been cut by two-thirds; the
regional poverty rate has been cut in half; the per capita income gap
between Appalachia and the U.S. has been narrowed; the percentage of
adults with a high school education has doubled; and the percentage of
Appalachian students completing high school now is slightly above the
national average.
In more concrete terms, more than 840,000 Appalachians now have
access to clean water and sanitation facilities through ARC grants; a
network of more than 400 ARC-funded primary care health facilities has
been completed; and ARC grants to revolving loan funds have assisted
1,234 small businesses in creating over 24,000 new jobs and saving
28,000 existing jobs. From any perspective, then, ARC's impact in
Appalachia has been substantial.
REVITALIZATION OF THE AGENCY
I am pleased to represent a President whose commitment to
Appalachia and to ARC has been unwavering. The Clinton-Gore
Administration has requested unprecedented levels of funding for the
Commission's highway and non-highway programs. And the Congress, on a
bipartisan basis, has responded by providing record funding for our
highway system and strong support for our non-highway work. This same
bipartisanship marked the 1998 reauthorization of ARC, the first in
almost 20 years.
I am proud to say that we the ARC family of Federal, State, and
local partners, with great support from the Congress have reformed and
revitalized the Commission. For example, in 1994 we made the decision,
with your support as one of our Governors, to mark our 30th
anniversary, not by having a celebration, but by taking a long, hard
look at the region and at ourselves.
We spent a full year engaged in a strategic planning process for
the Commission because we knew that the region and the world itself had
changed profoundly in the past thirty years. We did not hire a
consulting firm to do this plan; we did it ourselves, convening four
interstate town meetings, listening to focus groups, commissioning
research, holding consultations with experts, and hammering out a
shared vision among the Federal, State, and local partners.
The result of this planning effort was a new vision and mission for
the ARC. We agreed that we must invest in five essential building
blocks of economic development for Appalachia, and they are set forth
in our five goals statements. All ARC projects must clearly advance at
least one of these goals:
Goal 1. Appalachian residents will have the skills and knowledge
necessary to compete in the world economy in the 21st
century.
Goal 2. Appalachian communities will have the physical
infrastructure necessary for self-sustaining economic development and
improved quality of life.
GoaL 3. The people and organizations of Appalachia will have the
vision and capacity to mobilize and work together for sustained
economic progress and improvement of their communities.
Goal 4. Appalachian residents will have access to financial and
technical resources to help build dynamic and self-sustaining local
economies.
Goal 5. Appalachian residents will have access to affordable,
quality health care.
In addition, the Commission launched special regional initiatives
with dedicated multi-year funding. These initiatives address challenges
which span the region and which can benefit from interstate approaches
to solving problems and capitalizing on opportunities. These
initiatives have emphasized telecommunications, export promotion,
leadership development, and entrepreneurship. All have yielded
impressive results.
In our 1998 reauthorization, Congress recognized the effectiveness
of these revitalization efforts, incorporating a number of our internal
reforms into our statute and, under the leadership of this Committee,
giving us our first full-fledged reauthorization in almost 20 years.
Taken together our own reforms and those reflected in our
reauthorization have enabled the agency to renew its commitment to the
Region and better seek to complete its job.
DISTRESSED COUNTIES
Just as impressive as these reforms have been to our program,
however, has been the commitment of the Commission to target our
resources to the areas of greatest need . . . to our distressed
counties. The Commission targets its resources in two fundamental ways:
first, it sets aside funds for use exclusively in economically
distressed counties; second, it restricts funding in counties that are
performing at or near national economic norms.
Currently the Commission reserves 30 percent of its project dollars
for use solely in the counties that are classified as economically
distressed. In effect, States with no or few distressed counties
voluntarily agree to allocate more resources to the distressed counties
in other Appalachian States. While these funds can be used only in
distressed counties, States may also use other ARC funds in the
distressed counties. And they are doing so. During the past three
fiscal years, States have consistently exceeded the 30 percent set-
aside, spending about half of their total project funds on programs
that benefit distressed counties. This means that about 50 percent of
ARC project funds are being spent on programs to benefit the 11 percent
of Appalachia's population living in distressed counties.
It should be noted, as well, that our definition of distress is a
rigorous one. To qualify as distressed, a county must have unemployment
and poverty rates that are at least 150 percent of the national
averages and a per capita market income that is no more than two-thirds
of the national average. These are clearly counties struggling with
long-term, systemic economic difficulties.
Mr. Chairman, I think it also important to point out that many of
Appalachia's counties, while not formally classified as distressed, are
only a plant-closing away from becoming distressed. Their economies
remain fragile, often lacking diversification. We informally refer to
them as ``at risk.'' Our States spend a significant portion of their
funds on these counties as well.
At the other end of the economic spectrum are our counties that are
performing at national averages on key economic indicators. Generally,
those counties are precluded from receiving ARC project funds. They
have no need for ARC's special assistance. In addition, counties that
are approaching national economic norms are limited in the amount of
project funding that they may get from ARC.
Taken together, the set aside for distressed counties and the
limitations on funding projects in economically strong counties ensure
that ARC's limited dollars go where the needs are greatest. We at the
ARC have worked very hard on this targeting policy; and I am proud to
say that there has never been a negative vote on these policies from a
Federal Co-Chairman or from any of the States, some of whom are net
``losers'' in this allocation procedure. All have been willing to help
the neediest of our counties.
Earlier this year the Appalachian Governors and I launched a
regional outreach effort to craft an enhanced program for our
distressed counties. This initiative follows an extensive review of
ARC's existing policies and programs in distressed counties. To date we
have had focus groups or town meetings in five of our States--including
a tri-state town meeting in Ironton last month--and two other States
plan to hold listening sessions later this month.
These meetings are designed to identify new strategies to help
Appalachia's poorest communities become more competitive. While money
is of course one of the issues, this process attempts to discover ways
to achieve greater results within distressed counties with existing ARC
dollars. At its October meeting in West Virginia, the Commission is
expected to review a proposed strategic plan for distressed counties
and make recommendations on how to implement the plan. We will keep
your Committee informed as we create this enhanced program for
distressed counties.
ECONOMIC CONDITIONS IN APPALACHIA
As our focus on distressed counties suggests, despite robust
economic growth nationally, some communities have yet to share fully in
the nation's unprecedented prosperity. Too many rural areas--many of
them here in Southeast Ohio--still remain cut off by terrain and by
history from the broad economic currents that are raising American
standards of living.
Almost a fourth of the region's counties can be classified as
economically distressed, suffering the debilitating effects of
persistently high unemployment, low per capita income, and widespread
poverty.
Structural changes in declining sectors such as coal mining,
manufacturing, textiles, and agriculture--exacerbated by globalization
and technological change--have hit Appalachia disproportionately hard,
threatening to reverse the modest economic gains that many communities
have made. A culture of economic dependency continues to impede the
drive toward entrepreneurial innovation and risk-taking that is
reshaping so much of the national economy, while a widening digital
divide threatens to leave Appalachia's residents disconnected from the
educational and e-commerce opportunities created by the technology
revolution.
These trends are particularly evident in Southeastern Ohio, where 9
of the State's 29 counties are classified as economically distressed.
Indeed, while much of the rest of the region has been moving forward, a
combination of plant and mine closings and depressed agriculture prices
has hit Appalachian Ohio hard. For example, six counties entered
distressed status during the mid-1990s, as Ohio's counties have fallen
further behind on national indicators.
HIGHWAYS
From ARC's inception, highways have been central to the economic
development of Appalachia. A region unconnected to the transportation
grid of the nation cannot possibly participate fully in its economy.
Because the interstate system had bypassed much of Appalachia, Congress
authorized the Appalachian Development Highway System (ADHS), the only
major highway system created primarily to foster economic development.
The ADHS consists of 3,025 miles, reaching across all 13 of our
States. At the end of FY 1999, 81.2 percent of these miles were open to
traffic or under construction. In Ohio, there are 201 miles authorized
for ADHS construction, of which 161 are open to traffic. Changes
adopted by the Commission in 1999, in response to the request of the
State of Ohio, shifted mileage along Corridor C, creating a new
Corridor C1. This will enable the ADHS to better meet the traffic needs
of this part of Ohio. At the same time, the Commission's action
reaffirmed that the planned Portsmouth Bypass remains a part of the
system, linking central Ohio with Kentucky, Virginia, and North
Carolina.
TEA-21 for the first time authorized funding for the ADHS out of
the Highway Trust Fund, authorizing $450 million per year for work on
the System. With this increased funding our States are making major
progress toward completing the System. But we are also encountering
some of the most difficult terrain, which results in higher
construction costs. When it comes time for your Committee to write the
next multi-year highway bill, we hope you will continue to provide
substantial funding from the Highway Trust Fund, accelerating the day
that the entire system will be completed. At current funding levels
based on our last cost to complete estimate--the entire system could be
completed in a little less than two decades.
Two years ago we commissioned a study of the economic impact of the
ADHS--the first full-scale, rigorous assessment of the effectiveness of
the system in contributing to economic growth. Conducted by Wilbur
Smith Associates, a leading transportation consulting firm, the study
examined 12 of our 26 corridors, focusing on those corridors that are
largely complete and therefore should be contributing to job creation
in the region.
The results are both dramatic and reassuring:
Creating jobs.--The report estimated that the 12 corridors
had produced a net increase of 16,000 jobs by 1995 and projected a net
increase of 42,000 new jobs by 2015. These jobs would not have been
created without the ADHS. Only a portion of these were construction
jobs attributable to the actual building of the corridors.
Generating economic benefits.--The report estimated that
the total economic impact of the completed work on the 12 ADHS
corridors at $5.48 billion from 1965-2005, without considering direct
construction benefits. When construction benefits are included, the
total impact rises to $6.9 billion over the same period. Each $1 of
Federal investment will yield $1.32 in economic impact benefits.
Making travel easier, safer, and more cost-effective.--The
ADHS highway corridors are expected to produce travel efficiencies
nationwide valued at $4.89 billion over the 1965-2025 period.
AREA DEVELOPMENT
While a network of modern highways is essential to Appalachia's
economic growth, highways by themselves are not sufficient to enable
many of the region's communities to prosper. Through a flexible
approach that embraces basic infrastructure, jobs skills training,
local leadership development, small business assistance, and improved
health care, ARC offers Appalachia's communities the tools to create
self-sustaining local economies. Through the years, including your
tenure as Governor, Ohio has tapped the full range of these options.
Ohio has been one of a handful of States to emphasize the use of ARC
funds for jobs skills training and education.
ARC spends about two-thirds of its annual nonhighway budget on
infrastructure and public works projects in the region. These typically
include water and sewer systems, industrial parks, access roads, and
business incubators.
We recently released the results of an outside evaluation of ARC's
infrastructure projects. Examining a representative sample of projects,
the study shows that these projects are creating more jobs than
anticipated and are spurring significant economic activity across the
region. Roughly three-fourths of the sampled projects with specific
business or job-related goals either met or exceeded their projections.
The local impact of these ARC projects is dramatic: in 45 of the 65
counties for which measures could be developed, the report found that
ARC infrastructure investments created jobs equaling at least 10
percent of all net employment growth in the counties between 1990 and
1996.
Other findings include the following:
Private investment.--The ARC projects have leveraged a
total private sector investment of $3.075 billion, in a ratio of almost
$107 to every dollar invested by ARC. When an unusually large project
in the study is excluded from the analysis, the private sector
investment is $1.675 billion, with a ratio of $58 to $1.
Wages.--The total $32.4 million in ARC support has led to
$576.9 million of new wages annually for the jobs created by the
projects. This has led to a net expansion of $950.3 million of personal
income.
Tax revenue.--Each year the ARC projects are yielding
$14.3 million of State income tax revenue, $13.9 million of State and
local sales tax revenue, and $29.2 million in local property tax
revenue. The annual property tax revenue alone almost equals the entire
amount of the ARC investment.
``BOTTOMS UP'' APPROACH
The secret to much of the success that this study documents can be
found in the effectiveness of the region's 71 local development
districts (LDDs), multi-county economic development planning agencies
that work with local governments, non-profit organizations and the
private sector to determine local economic development needs and
priorities. For many communities, these LDDs are the principal source
of professional guidance in crafting and implementing local economic
development strategies. They are literally the first stop on a
community's path to economic self-sufficiency.
Appalachian Ohio is served by three excellent LDDs--the Ohio Valley
Regional Development Commission, the Buckeye Hills Regional Development
District, and the Ohio Mid-East Governments Association. These local
groups, whose boards contain local elected officials and private sector
representatives, are responsible for developing most of the projects
that are submitted to ARC. This local orientation creates a genuine
``bottoms up'' approach that is the hallmark of ARC.
NEW MARKETS AND ENTREPRENEURSHIP
Appalachia's future economic vitality depends in large measure upon
nurturing homegrown firms--businesses that create jobs, increase local
wealth, and ultimately reduce the region's need for outside subsidies.
Unfortunately, due to Appalachia's longstanding dependence on
extractive industries and branch plant manufacturing, the culture of
entrepreneurship in the region is neither broad nor deep, and research
findings suggest that there are many gaps in the infrastructure needed
to support entrepreneurship.
Responding to these conditions, in 1998 the Commission launched a
multi-year, $15 million initiative to build entrepreneurial economies
across Appalachia. The initiative has focused on four essential
components in building sustainable entrepreneurial economies:
Entrepreneurial education and training
Technical and managerial assistance to new and expanding
businesses
Developing entrepreneurial networks and sectors
Improving access to debt and equity capital
To guide its investments, ARC has relied upon working groups
composed of regional practitioners, State partners, private sector
investors, Federal agencies, and foundations.
Some of the most exciting entrepreneurship work is taking place
right here in Southeastern Ohio. The Appalachian Ohio Development Fund,
a venture capital fund targeted to the needs of small businesses in
this part of Ohio, is a creative response to the call for equity
financing options. ACENet, led by June Holley, has earned a national
reputation for its specialty foods incubator, benefitting both small
businesses and agricultural producers in the Athens County area. And
Junior Achievement, which has an active presence in Ohio, offers one of
the premier programs for entrepreneurial education in our high schools.
So far our Entrepreneurship Initiative has funded 133 projects. The
25 projects that have been completed reported the creation of 198 new
businesses and creation or retention of 539 jobs. The 108 on-going
programs are projected to create 342 new businesses and create or
retain 2,951 jobs.
ARC's entrepreneurship work complements the President's New Markets
Initiative, which passed the House with a strong bipartisan majority
late last month, and which we hope the Senate will consider in
September. The first stop on the President's New Markets tour last
summer was Appalachian Kentucky. Taken together, the New Markets
Initiative and our Entrepreneurship Initiative can provide scores of
Appalachian communities and businesses with new opportunities for
private investment and locally based growth.
ADVOCACY AND COLLABORATION
From its creation, ARC's unique Federal-State partnership has had a
mandate to be an advocate for the region. It has offered a platform for
galvanizing other Federal, State, and private sector efforts to move
the region into the nation's economic mainstream. ARC works closely
with other Federal agencies to avoid duplication while helping ensure
that these other Federal programs respond effectively to the particular
challenges that Appalachian communities face. It also seeks to leverage
investment in the region by non-profit organizations and the private
sector. Some recent activities suggest the scope of this work.
Transportation Summit.--Building on their traditional
highway partnership, ARC and the Department of Transportation last year
jointly sponsored a regional summit on intermodal transportation and
laid the groundwork for 10 ARC intermodal grants, including a joint
Ohio-West Virginia-Kentucky project to capitalize on the potential of
the Ohio River.
EPA Brownfields.--In July ARC and EPA entered into a
memorandum of agreement designed to give Appalachia's communities a
greater role in EPA's brownfields program. We are hoping this
collaboration, which includes technical assistance workshops for local
officials, will result in more brownfields cleanup funds flowing into
our region.
Kellogg Foundation.--ARC and the W.K. Kellogg Foundation
have teamed up for an unprecedented collaboration to harness technology
in promoting community and economic development. Focused on Northwest
Pennsylvania and Southeastern Ohio, in June this partnership resulted
in Kellogg grants of $200,000 each to two community teams from those
States. This money likely would not have gone to Appalachia if ARC had
not taken the lead in promoting the region.
First Union Bank.--First Union Bank has been a key private
sector participant in our entrepreneurship work. As a result of this
involvement, last year First Union committed $5 million for small
business lending and investment in Appalachia, and this year they will
commit additional dollars for venture capital funds serving Appalachia.
Diabetes Outreach.--To help lower the risk of diabetes in
Appalachia, which suffers from a disproportionately high incidence of
diabetes, and reduce the likelihood of long-term complications of those
already afflicted by this disease, the ARC and the Centers for Disease
Control will collaborate on an educational outreach initiative. This
pilot project will help local health educators conduct a range of
diabetes prevention and control outreach programs.
Mr. Chairman, these activities suggest the broad mandate that ARC
has to address the needs of Appalachia. The economic challenges facing
Appalachia are difficult; they require a multi-faceted, comprehensive
approach. With its renewed commitment to the region's most distressed
areas, augmented by a special focus on entrepreneurship and private
sector investment, ARC is positioned to help Appalachia's communities
participate fully in the American economy of the 21st
century. We look forward to working with you and the Committee in
accomplishing this task.
______
Statement of Wayne F. White, Ohio Appalachian Center for
Higher Education
Good Morning!
I'm Wayne White with the Ohio Appalachian Center for Higher
Education, often referred to as OACHE. OACHE is a consortium of ten
public colleges and universities serving the Ohio Appalachian region
with a mission to increase the college-going rate.
This mission closely correlates with the first listed goal of ARC's
Strategic Plan--``Appalachian residents will have the skills and
knowledge necessary to compete in the world economy in the 21st
Century.'' The catalyst for the formation of OACHE was a comment from
famous restaurateur and then-member of the Ohio Board of Regents Bob
Evans. In 1990 he commented to Dr. Clive Veri, President of Shawnee
State University that the college presidents in the 29 county Ohio
Appalachian region needed to do something about our children not
participating in college.
Acting on that comment, the college presidents, Ohio legislators,
the Chancellor of the Board of Regents and Bob Evans met to discuss the
problem. From these discussions came funding for a study that would
accurately determine the college-going rate and, importantly, identify
the barriers to participation in post secondary education. The results
of that research have become known as the Access and Success study.
As we all know, Appalachians are proud, patriotic, hardworking,
honest individuals. However, these attributes are not sufficient for
Appalachians to fully participate in the current economic growth our
country is experiencing. In today's fast-paced and technology-driven
economy, advanced skills and a lifelong commitment to training are
essential to secure and keep a meaningful, living-wage job. As Bob
Evans so eloquently puts it, ``The days are gone when hard work alone
will get you there.'' To help our citizens free themselves from the
vicious cycle of poverty, unemployment and underemployment, we must
address the issue of educational attainment. To that end, the Access
and Success study forces us to reflect on some disturbing facts:
The college-going rate in Ohio Appalachia was estimated at 30
percent compared to the State average of 41 percent and the national
average of 62 percent . Barriers delineated in the study include:
1. Poverty
2. Lack of role models (only 8.8 percent of Ohio Appalachian adults
over age 25 have a 4-year college degree compared to nearly 23 percent
nationally).
3. Lack of knowledge about college, including cost. (When asked to
estimate the cost of college the subjects responded with figures twice
as high as the actual cost.)
4. Availability of living-wage blue-collar jobs in the past that
did not require high educational attainment.
5. But the primary barrier to college participation by Appalachians
and probably others living in impoverished areas in our country is low
self-esteem. Our students have academic ability--they just don't know
it! Only 29 percent of seniors rate themselves above average compared
to 58 percent nationally. (These figures correspond closely to the
college going rate of 30 percent for the region and 60 percent for the
nation.)
The low levels of educational attainment in Ohio Appalachia are
linked to the region's chronic and severe economic distress. The trend
in living-wage employment over the last several decades has turned away
from blue-collar jobs and toward higher-skill jobs, especially those
involving technology. Unfortunately, a high percentage of those Ohio
Appalachian students who are not college-bound lack the advanced skills
required by today's increasingly technology-oriented employers.
Not surprisingly, unemployment in Ohio Appalachia is higher than
for the State as a whole. Virtually the entire area suffers from
unemployment rates well above the State (4.1 percent) and national
averages (4.0 percent for both, as of June 2000). All nine Ohio
counties with the highest unemployment in June 2000 were Appalachian
counties, and four reported unemployment rates at or over 10 percent.
Unemployment figures along under-represent the extent of economic
hardship truly experienced in the region. Virtually all the region's
net job growth over the last two decades has occurred in the services
and retail-trade sectors of the economy; these jobs typically pay low
wages and/or are part-time positions offering few or no benefits.
Therefore, major declines in unemployment during economic recovery
periods of the 1980s and 1990s have not led to comparable reductions in
economic distress. Instead they have merely increased the number of
working poor. According to 1995 poverty estimates, Ohio Appalachia is
now poorer than it was two decades ago.
For Ohio Appalachia, which lags behind the rest of the State in all
economic and educational indices, it is clear that increased access to
affordable higher education is a critical precondition to breaking the
cycle of poverty, unemployment and underemployment that plagues the
region.
The socioeconomic picture is no better in other parts of the 13-
State Appalachian region. A recent New York Times article run on July
27, 2000 noted that, ``with the national economy bubbling along,
soaking up workers and spreading wealth, . . . much of Appalachia live
not only with poverty and unemployment but also with the humiliation of
being taken for ignorant.'' This article notes that low educational
attainment not only impacts the individual but also represents a huge
reservoir of potential workforce talent that is tragically going to
waste.
The article also points out that social programs born in the 1960s
focused on supporting the needy at subsistence levels, making laudable
efforts to feed, clothe, nurse and shelter the destitute and
disenfranchised in what is otherwise the richest nation on earth. But
critics say these programs have also, in many cases, institutionalized
illiteracy, dependency on welfare and a low standard of living.
Bob Evans would be quick to tell you that in his 82 years he has
seen many different development and social initiatives come and go. Yet
the fact is, few have ever really worked. When things don't work, Bob
would say, you pull out the directions. And the directions say we need
to provide people with education, and to help them take advantage of
that education we need to help them overcome the barriers they face in
getting that education.
In an effort to address such challenges the OACHE was established
by the Ohio General Assembly in 1993 with just that approach in mind.
The OACHE immediately began addressing the Access and Success barriers
through programs in member institutions and, on a competitive basis, in
partner public schools. The results have been better than perhaps
anyone envisioned.
Using the Access and Success study as the guide, schools were
invited to submit to the OACHE Board of Directors a proposal of how
they could best address the barriers with a $10,000 project. To date,
79 projects have been sponsored and they have averaged increasing the
rate 20 percent the first year and 34 percent the first two years
combined. Let me mention the impact of a few partner school projects,
all of which are administered by unpaid coordinators at the local level
(an ``*'' indicates a funded year).
Newcomerstown High School was one of the first partner school
projects funded by the OACHE. Before the grant Newcomerstown's college-
going rate was 28 percent .
Newcomerstown 28% -45%* -56%* -72%* -56%* -58% -80%
Vocational schools have historically had an even lower college
participation rate. Swiss Hills, in distressed Monroe County, has
proven such does not need to be case.
Swiss Hills Vocational 21% -17% -31% -28% -51%* -57%*
And Southern Local along the Ohio River in distressed Meigs County
is now exceeding the State and national average.
Southern (Meigs) 61% -59% -58% -73% -84%* -82%*-89%*
Portsmouth East is a good example of a partner school achieving
immediate results.
Portsmouth East 35% -39% -33% -29% -55%* -70%*
Perhaps Bob Evans, in an article published by ARC in its Appalachia
magazine, best summed up the results of these projects. Bob said, ``I
can't believe all this has happened. I never thought that just a few
years we could encourage so many Ohio Appalachians to go to college.''
In addition to sponsoring very successful partner school projects,
OACHE has parlayed its State funds into additional dollars to address
low educational attainment in the region. The ARC has been one of many
public, private and not-for-profit partners in the OACHE's efforts:
1. With two ARC grants totaling $126,400, the OACHE leveraged
additional grant funds from Ameritech, the Honeywell Foundation, GTE
and the Ohio Board of Regents to plan and pursue implementation of a
compressed-video network linking OACHE member institutions across the
29-county region. These additional grants total nearly $582,000, more
than 4.5 times the original ARC investment. I am pleased to report
that, with ARC as the catalyst and with the efforts of the presidents
of the member institutions and OACHE staff, this project has come to
fruition; this unique multi-institutional network will be operational
in the fall 2000 academic year to increase access to higher education
across the region.
2. In 1994 OACHE successfully competed for an Educational
Opportunity Center. (A U.S. Department of Education TRIO program) This
program provides assistance to low-income first generation adults in
their desire to enter or reenter college.
3. With support from the Thomas L. Conlan Educational Foundation,
Ameritech, and other partners, OACHE recently won a five-year,
$2,060,000 Federal GEAR UP grant.
4. Something that is very exciting is the decision of the Community
Colleges of Appalachia to promote OACHE-like centers. The first such
center, the North Central Appalachian Center for Higher Education
(NCACHE) at Bluefield State College, opened in fall 1998. And yes, the
ARC financially supports these projects.
5. Following the success of the NCACHE, the ARC again stepped up to
create more OACHE-like centers throughout the rest of the 13-State
region. In February 2000, the governors of the 13 States, led by
Governors Taft and Underwood, voted to replicate the OACHE model with
the use of challenge grants. The OACHE and NCACHE have worked closely
with the ARC to establish the new program and choose the first
grantees, which will open their doors in fall 2000.
The ARC has demonstrated its commitment to Ohio Appalachia in other
ways besides its two grants to the OACHE. ARC Federal Co-Chairman Jesse
White addressed the OACHE's Second Annual Conference in 1995, and
subsequently informed us that the OACHE had inspired him to stress the
importance of education in the ARC Strategic Plan; as you may know,
education is the #1-listed goal in the plan.
Since that time we've also been honored to have Cari Morningstar
and Jack Russell address our OACHE Conferences. And the Governor's
Office of Appalachia, Ohio's liaison between the ARC and the Governor
of Ohio, has been an integral partner with the OACHE in conferences and
other initiatives for many years.
I would like to add that the highest-ranking educator in the free
world, U.S. Secretary of Education Richard Riley, traveled to
Portsmouth to address the fifth annual conference. His personal
participation was so uplifting to educators, and more importantly, to
students of the region. It brought a loud and clear message, that
children who happen to live in property poor areas are important too!
In closing, the OACHE strongly supports the ARC as a vital player
in the socioeconomic development of Ohio Appalachia. Like the OACHE,
the ARC's efforts go beyond providing for subsistence needs to building
capacity that will enable our citizens to help themselves. As you have
seen from my testimony and that of my fine colleagues who are here
before you today, the needs in Ohio Appalachia are numerous and
daunting. As a region and State, we certainly could not have
accomplished what we have without the resources that the ARC has
invested in our people and infrastructure. But much more remains to be
done. As the ARC Federal Co-Chairman himself has said, we look forward
to the day when the ARC will no longer be needed, but that day is not
yet in sight. Until then, we have a challenging and important job ahead
of us. The continued partnership of the ARC will be instrumental in
helping us reach that point.
Senator Voinovich, I would like to thank you, your staff, and your
colleagues for conducting this hearing and for providing me an
opportunity to inform you of the OACHE, on behalf of the presidents of
the ten colleges that comprise the OACHE consortium, the many educators
who work so diligently to assist students along a path that will lead
them from poverty, but I want to thank you especially for the children
of the region.
__________
Hidden Valley Ranch, Inc.,
Bidwell, Ohio, May 6, 2000.
Mr. Wayne F. White, Executive Director,
Ohio Appalachian Center for Higher Education,
c/o Shawnee State University,
Portsmouth, Ohio.
Dear Mr. White: The continued success of the Ohio Appalachian
Center for Higher Education (OACHE) and programs like it is the only
hope I see to help Appalachians and other poor rural areas out of
poverty. During my lifetime, I have observed many attempts to initiate
economic development and thus a better quality of life for our
residents but few have proven successful! The fact is that we now need
to address the extremely low level of educational attainment before we
can find a path that leads to economic development for impoverished
areas.
I have followed the tremendous success of OACHE and Ohio
Appalachian partner schools increasing the college-going rate an
average of 20 percent the first year and 34 percent during the first
two years. In addition, I was pleased to learn that a pilot project in
West Virginia, sponsored by the North Central Appalachian Center for
Higher Education (NCACHE), increased the college-going rate over 50
percent in one year. Now this is the way to fight poverty!
I'll always have a warm spot in may heart for West Virginia. My
grandfather died young and left a large family. My father, who had only
been able to attend public school four years, enrolled in Rio Grande
College at age 17 for six weeks then passed the examination to qualify
as a teacher. He could not get a teaching job in Ohio; however, he was
employed to teach in Bud, WV, where he was able to provide much-needed
money for his widowed mother. That's the kind of people who live in
West Virginia! One just doesn't forget good deeds like this.
Based on the success of the OACHE and NCACHE partner schools, I
have decided that I want to help place the West Virginia project on
solid funding. Although I have not been solicited, please accept this
donation and place it in a foundation at Bluefield State College for
NCACHE to sponsor $10,000 OACHE-model partner school projects. As part
of this contribution I would like the following:
(1) Have these OACHE Model programs administered by Ms. Sarita
Gattuso with oversight by Mr. Wayne White. I have seen the way these
two individuals provide guidance and motivate educators to assist
students in overcoming barriers to college. Having talented,
experienced individuals who are dedicated and understand the challenges
of disadvantaged students is critical to the success of the program.
(2) I suggest the Board of Directors include the President of
Bluefield State College, the Governor of West Virginia or his/her
representative, a school teacher, a guidance counselor and a school
administrator.
Once I receive verification that sufficient funding has been
secured to operate and administer the West Virginia center for a
minimum of three years, NCACHE is free to award these dollars to
partner schools in West Virginia using the normal OACHE/NCACHE
competitive process. If such verification is not confirmed my
expectation would be to have the donation returned to me in full.
It is my hope that a National Center also be established at
Bluefield State College so students in other areas of this country can
have an opportunity to reach their potential. I am confident funders
from foundations, business, industry, individuals and government will
also be interested in giving students in high-poverty areas an
opportunity to succeed.
Unfortunately, children from these areas have been told for too
long that they are somewhat less intelligent and a lot less motivated.
Although these children do face additional barriers which result in
low-educational attainment, OACHE has clearly demonstrated these
barriers can be overcome.
I am so please to see our kids have a chance to succeed. They are
proud, hard-working, honest individuals and they too deserve a chance
to participate in the economic growth our country is experiencing.
Sincerely,
Bob Evans.
ARC's mission is to be an advocate for and partner with the people
of Appalachia to create opportunities for self-sustaining economic
development and improved quality of life.
Goal 1.--Appalachian residents will have the skills and knowledge
necessary to compete in the world economy in the 21st
century.
Goal 2.--Appalachian communities will have the physical
infrastructure necessary for self-sustaining economic development and
improved quality of life.
Goal 3.--The people and organizations of Appalachia will have the
vision and capacity to mobilize and work together for sustained
economic progress and improvement of their communities.
Goal 4.--Appalachian residents will have access to financial and
technical resources to help build dynamic and self-sustaining local
economies.
Goal 5.--Appalachian residents will have access to affordable,
quality health care.
Table 1.--Ratio of Total Results per Public Dollar for Non-Residential Economic Development Projects
----------------------------------------------------------------------------------------------------------------
Project impact Ratio per ARC dollar Ratio per public dollar
----------------------------------------------------------------------------------------------------------------
Total Private Investment............. $3.075 billion......... 107:1.................. 29:1
Jobs:
New Jobs: Direct................... 23,377................. $1,222/job............. $4,574/job
New Jobs: Total.................... 44,331................. $ 645/job.............. $2,412/job
--------------------------------------------------------------------------
Total New and Retained Jobs...... 60,178................. $ 470/job.............. $1,761/job
Income:
From New Jobs: Direct.............. $ 577 million.......... 20:1................... 5.4:1
From New Jobs: Total............... $ 950 million.......... 33:1................... 8.9:1
----------------------------------------------------------------------------------------------------------------
Note: All ratios are based on non-residential project funding: ARC $28.6 million, total public $106.9 million;
see text for important limitations on interpretations of these ratios
__________
Statement of Roger W. McCauley, Executive Director, Corporation for
Ohio Appalachian Development (COAD)
Dear Chairman Voinovich and Members of the Committee: I am pleased
to submit this written testimony to your Committee on the Appalachian
Regional Commission. The Corporation for Ohio Appalachian Development
(COAD) is private, non-profit community-based organization serving
rural, mostly Appalachian, counties in eastern and southern Ohio. It is
comprised of seventeen Community Action Agencies that serve a 30-county
service area. COAD's mission is to provide a unified voice and
representation for its member agencies and the constituencies that they
serve, primarily low-income families, children and the elderly.
Throughout its 29-year history, COAD and its member agencies and
the communities they serve, have benefited from the resources and
assistance provided by the Appalachian Regional Commission. Let me site
you two recent examples:
PROJECT GOOD START
The Appalachian Regional Commission supported Project Good START
(Small Town Assessment and Readiness Techniques), from December 1996
through January 1998, with a modest $52,800 grant under the ARC
Regional Initiatives Program. Project Good Start set into motion events
that are still reaping rewards today. As Congress had intended, ARC
funds acted as a catalyst for Federal agency programming and financial
support that continues to this day.
Project Good START, as part of the Ohio Rural Enterprise Project,
is currently funded by the U.S. Department of Agriculture's Rural
Development. After five years of operation, the program has provided
community strategic planning and economic development support in forty
communities throughout rural Ohio, with twenty of those communities in
Appalachian Ohio. (See attached map of Project Good START communities
in Appalachia Ohio.)
During the eighteen months of ARC funding, Project Good START
worked in eight communities. For example, in nearby Glouster and
Albany, both in Athens County, each community is benefiting from the
activities (community-wide surveys, goal setting, and small business
support groups) that were undertaken nearly three years ago. Both of
these villages now have community festivals that grew out of food or
crop industries that have enjoyed success in these supportive community
environments. The festivals literally grew from the need of new
entrepreneurs to bring focus and recognition to their products. In
Glouster the community supported the newly relocated, but local, Frog
Ranch Salsa Company, and the Good START Committee helped to form a
community festival committee with the support and encouragement of Frog
Ranch Salsa. The result is the first Ohio Chili Pepper Festival.
In Albany, on the other side of Athens County, a similar
circumstance has supported the development of an unusual crop, the
native pawpaw fruit. Local entrepreneur Chris Chmiel has developed a
thriving pawpaw business that is not only a nursery to propagate the
distribution of the fruit tree, but also develops and sells numerous
products from the fruit. Chris became a member of the Good START
Committee in Albany, now known as the Albany Business and Community
Development Committee, and encouraged the community support of a Pawpaw
Festival. The first year was a great success, even attracting outside
interest from Beffer Homes and Gardens Magazine, and the Washington
Post. The Good START process in Albany also sparked the development of
a local Chamber of Commerce.
The communities that have participated in the Good START process
constantly refer to the effort as a catalyst'' for renewal, as an
``organizing'' influence, and as a ``road map'' for community-based
improvement activities.
APPALACHIAN LEADERSHIP ACADEMY
The Appalachian Leadership Academy (ALA) is a hands-on training
program to help prepare middle management employees for leadership
positions within their agencies and communities. ALA's curriculum
provides leadership and skill building opportunities to professionals
in local governments and non-profit organizations throughout Ohio's
Appalachian region. The Academy's goals are:
Build leadership skills and organizational capacity within
institutions that serve the region,
Equip the region's future leaders with the skills
necessary to guide Ohio Appalachia through change and into the future,
Motivate future leaders to think strategically about the
region,
Deepen the knowledge and understanding of the history,
opportunities, resources, strengths, and challenges of the Appalachian
Ohio region.
The Academy received initial funding from the Appalachian Regional
Commission during its research and design phase. Working in
collaboration with the Institute for Local Government Administration
and Rural Development at Ohio University, the Academy's curriculum and
program content were developed based on surveys and information from
agency directors and local government officials. The curriculum is
based on five core competencies including self-knowledge, visioning,
human resource management, effective communication and effective
management. The curriculum is delivered through interactive II learning
sessions, small group work, individual class work and
homeworkassignments, site visits, teambuilding exercises, lectures,
mentoring and individual or group projects during the 12-month program.
The Appalachian Regional Commission also provided second year
funding to support the implementation of the Academy's program to the
charter class of 36 mid-level managers of community action agencies.
This first class is scheduled to graduate later this month.
As a result of the initial 2-year funding from the Appalachian
Regional Commission which ends this fall, COAD has been able to
leverage other Federal and State funds for on-going support. The
current State budget includes an appropriation of $75,000 per year for
the program. The Academy's second class, which begins this September,
includes representatives of local governments, local school districts,
colleges and universities, health care organizations, economic
development organizations and other non-profit organizations.
SUMMARY
Both of these projects are examples of the Commission's commitment
to civic capacity and leadership----
``The people and organizations of Appalachia will have the
vision and capacity to mobilize and work together for sustained
economic progress and improvement of their communities''
Although the Commission's financial commitment to the two projects
was relatively small in comparison to the costs of other projects such
as infrastructure and highways, the long-term impact will be just as
important to the region's future growth and development. Leadership
development and civic capacity are critical to a community's economic
viability and stability. The Appalachian Regional Commission should be
commended for its investment in these types of activities.
Thank you, again, for allowing me to submit this written testimony.
If further information or clarification is needed, please contact me
directly.
Overview of Ohio Distressed Countries
This brief report presents an overview of the basic socioeconomic
and demographic conditions of Ohio's counties, with details provided in
the attached tables. Table summarizes the data used for the FY 2000
county-level economic designations. In FY 2000 there are 9 distressed
counties, and 19 transitional counties, and one competitive county in
Ohio.
Demographic features: a few key points emerge about Ohio's
distressed counties.
Only on distressed county (Monroe) experienced a
population decline since 1990, but this was relatively small (-140); in
contrast two transitional counties experienced larger declines (Belmont
with -1,899, and Jefferson with -5,700).
In 1998, four distressed counties had populations between
10,000 and 25,000, including Meigs (24,006), Monroe (15,357), Morgan
(14,536), Vinton (12,158) and five counties with populations greater
than 25,000, including Adams (28,587), Athens (61,490), Gallia
(33,422), Pike (27,775), and Scioto (80,355).
Only two counties have been persistently distressed since
1988, as shown in Table 2 which presents a history of distress status
since 1988 (Adams and Pike).
Six counties entered distressed status during the mid-
1990's (Athens, Meigs, Monroe, Morgan, Scioto, and Vinton), and Gallia
County has entered distressed status after a decade of being classed
transitional.
Urban-Rural Characteristics:
LTwo counties have urban populations of 20,000 or more
and are adjacent to a metro area (code 4, Table 1);
LFour counties are adjacent to a metro area with urban
populations of 2,500 to 19,999 (code 6);
LOne county is not adjacent to a metro area with urban
populations of 2,500 to 19,999 (code 7);
LOne county is completely rural with an urban
populations of less than 2,500, but is adjacent to a metro
county (code 8);
LOne county is completely rural with an urban
populations of less than 2,500, but is not adjacent to a metro
county (code 9);
GOAL 1.--EDUCATIONAL ATTAINMENT
Educational attainment rates within Ohio's Appalachian counties are
shown in Table 3 of the attachments.
Two of the distressed counties have relatively high
educational achievement rates, with double-digit college completion
percentages, and high school completion percentages above 64 percent
(Athens and Gallia). Athens has the highest college completion rate (23
percent), but his is largely due to the presence of Ohio University.
None of the distressed counties had high school completion
rates below 50 percent.
The other seven counties registered high school completion
rates between 58 percent and 72 percent--all below the national average
of 75 percent.
GOAL 2.--INFRASTRUCTURE
Measures of Infrastructure needs are based on the 1999 LDD survey
which provides some detail on water and sewer service, public access
telecommunications facilities, and the extent of industrial parks and
business incubators within each county.
Public Water System
The percent of households served by public water systems in
distressed counties broke into three groups:
6 distressed counties had 75 percent or more of their
households served by a public system;
2 distressed counties had between 51 percent and 74
percent of households served by a public water system;
1 distressed county had 50 percent or less of their
households served by a public system.
Public Waste Water System
The percent of households served by public water systems in
distressed counties broke into three groups:
None of the distressed counties had 75 percent or more of
the households served by a public wastewater system;
1 had between 51 percent and 74 percent of households
served by a public wastewater system;
8 other distressed counties had 50 percent or less of
their households served by a public wastewater system.
These data indicate a high reliance on private septic
systems in over half the counties, and probably a high incidence of
poorly treated or untreated residential waste water.
Industrial park development is found in seven of the distressed
counties, but business incubators are located in only one of the
distressed counties (Athens).
Public access telecommunications facilities: Seven of Appalachian
Ohio's distressed counties have public access telecommunications
facilities, while public access facilities are not found in Meigs and
Monroe counties.
GOAL 3.--COMMUNITY LEADERSHIP
The 1998 LDD survey indicates the presence of a leadership program
in 5 of the 9 distressed counties (those without are Adams, Athens,
Meigs, and Monore).
GOAL 4.--DYNAMIC LOCAL ECONOMIES
An economic profile of the local economies of each of the
distressed counties is provided in Table 4 which shows the major
employment sectors by county and industry based on 1996 data. The Table
also details how a county's employment share in a particular industry
compares to national employment share in the industry in question (as
measured by the ``location quotient'' or LQ). Generally Table 4
identifies those industries with high employment shares and LQs that
are greater than 1.5.
Several findings are evident from the county-level employment data.
Manufacturing sectors are important for 3 of the 9 distress
counties, accounting for over 20 percent of private, non-farm,
employment in Monroe, Morgan, Pike, and Vinton. Monroe is the most
manufacturing dependent with primary metals being the dominant
industry. Pike is dominated by chemicals, Morgan has a fairly diverse
manufacturing base, while Vinton has a large presence of chemicals, and
lumber and wood products.
Coal mining employment is a major employer in only Meigs, and has a
smaller presence in Monroe and Vinton.
Lumber and Wood Products The lumber and wood products industry has
a presence in 7 of the distressed counties, and 5 counties have over
250 jobs in these industries (Adams, Morgan, Pike, Scioto and Vinton),
with Pike (1946), and Adams (456) being the largest employers.
Apparel and Textiles The apparel and textiles industries has a
small presence in Adams and Athens.
Health services is very important in Ohio's distressed counties, as
seven of the nine distressed counties (Adams, Athens, Gallia, Meigs,
Morgan, Scioto and Vinton) have 10 percent or more of their private
non-farm employment in health-related activities. Health services is
the largest private employment sector in Adams, Gallia, and Scioto
(which has the largest workforce by far with 4,000 health service
workers, inclusive of doctors).
Retail is very important in Adams, Athens and Scioto, suggesting
that these counties may supply surrounding counties with much of the
diversity of retail goods and services
Farming (not shown in Table 4), is only significant in Adams
county. The high dependency on farming raises a questions about what
strategies have been adopted by local development efforts to cultivate
``value-added'' business related to these counties farming specialties.
Diversified Economies. A couple of these distressed counties have
fairly diversified economies, with a good mix of manufacturing sectors,
service sectors, finance, and retail employment, particularly in Adams,
and Scioto.
Table 1.--Appalachian Counties' Economic and Demographic Status
--------------------------------------------------------------------------------------------------------------------------------------------------------
Per
Capita Poverty Pop
Econ Unemployment Market Rate 1990 Population change Urban-
County State Status Rate 1995-97 Income 1998 since Metro99 Ruarl
FY2000 (percent) 1996 (percent) 1990 Code 0-9
(dollar)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Adams.......................... Ohio.............. 1 12.0 8,881 28.5 28,587 3,216 non-metro 6
Athens......................... Ohio.............. 1 5.4 11,082 28.7 61,490 1,941 non-metro 4
Belmont........................ Ohio.............. 2 7.1 12,472 17.4 69,175 -1,899 metro 3
Brown.......................... Ohio.............. 2 5.8 13,755 14.2 40,795 5,829 metro 1
Carroll........................ Ohio.............. 2 5.1 13,906 11.7 29,095 2,574 metro 2
Clermont....................... Ohio.............. 3 4.3 18,135 8.7 175,960 25,793 metro 0
Columbiana..................... Ohio.............. 2 5.8 13,780 15.9 111,521 3,245 metro 2
Coshocton...................... Ohio.............. 2 6.0 14,157 13.2 36,115 688 non-metro 6
Gallia......................... Ohio.............. 1 8.6 11,455 22.5 33,422 2,468 non-metro 6
Guernsey....................... Ohio.............. 2 8.0 11,181 17.5 40,994 1,970 non-metro 7
Harrison....................... Ohio.............. 2 7.8 10,330 19.7 16,097 12 non-metro 6
Highland....................... Ohio.............. 2 6.2 12,134 16.5 40,364 4,636 non-metro 6
Hocking........................ Ohio.............. 2 6.8 12,666 15.7 29,004 3,471 non-metro 6
Holmes......................... Ohio.............. 2 3.4 13,263 17.2 37,841 4,992 non-metro 7
Jackson........................ Ohio.............. 2 7.7 11,268 24.2 32,563 2,333 non-metro 7
Jefferson...................... Ohio.............. 2 10.0 13,211 17.1 74,558 -5,740 metro 3
Lawrence....................... Ohio.............. 2 6.5 10,690 23.5 64,427 2,593 metro 2
Meigs.......................... Ohio.............. 1 10.8 9,568 26.0 24,006 1,019 non-metro 6
Monroe......................... Ohio.............. 1 10.2 11,726 21.5 15,357 -140 non-metro 6
Morgan......................... Ohio.............. 1 13.4 10,992 21.2 14,536 342 non-metro 8
Muskingum...................... Ohio.............. 2 7.5 14,781 14.7 84,470 2,402 non-metro 4
Noble.......................... Ohio.............. 2 7.5 11,302 16.4 12,343 1,007 non-metro 8
Perry.......................... Ohio.............. 2 8.3 10,202 19.1 34,290 2,733 non-metro 7
Pike........................... Ohio.............. 1 9.0 10,997 26.6 27,775 3,526 non-metro 6
Ross........................... Ohio.............. 2 5.9 13,807 17.7 75,473 6,143 non-metro 4
Scioto......................... Ohio.............. 1 9.8 10,942 25.8 80,355 28 non-metro 4
Tuscarawas..................... Ohio.............. 2 5.4 15,319 11.1 88,608 4,518 non-metro 4
Vinton......................... Ohio.............. 1 11.2 10,159 23.6 12,158 1,060 non-metro 9
Washington..................... Ohio.............. 2 6.2 15,212 13.7 63,413 1,159 metro 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 2.--Designation of County Economic Status in the Appalachian Region, FY1988-FY2000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
County State FY1988 FY1989 FY1990 FY1991 FY1992 FY1993 FY1994 FY1995 FY1996 FY1997 FY1998 FY1999 FY2000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Adams................ OH........................ 1 1 1 1 1 1 1 1 1 1 1 1 1
Athens............... OH........................ 2 2 2 2 2 2 1 1 1 1 1 1 1
Belmont.............. OH........................ 2 2 2 2 2 2 2 2 2 2 2 2 2
Brown................ OH........................ 2 2 2 2 2 2 2 2 2 2 2 2 2
Carroll.............. OH........................ 2 2 2 2 2 2 2 2 2 2 2 2 2
Clermont............. OH........................ 2 2 2 2 2 3 3 3 3 3 3 3 3
Columbiana........... OH........................ 2 2 2 2 2 2 2 2 2 2 2 2 2
Coshocton............ OH........................ 2 2 2 2 2 2 2 2 2 2 2 2 2
Gallia............... OH........................ 2 2 2 2 2 2 2 2 2 2 2 1 1
Guernsey............. OH........................ 2 2 2 2 2 2 2 2 2 2 2 2 2
Harrison............. OH........................ 2 2 2 2 2 1 1 1 1 2 2 2 2
Highland............. OH........................ 2 2 2 2 2 2 2 2 2 2 2 2 2
Hocking.............. OH........................ 2 2 2 2 2 2 2 2 2 2 2 2 2
Holmes............... OH........................ 2 2 2 2 2 2 2 2 2 2 2 2 2
Jackson.............. OH........................ 2 2 2 2 2 2 2 2 2 2 2 2 2
Jefferson............ OH........................ 2 2 2 2 2 2 2 2 2 2 2 2 2
Lawrence............. OH........................ 2 2 2 2 2 2 2 2 2 2 2 2 2
Meigs................ OH........................ 2 2 2 2 2 2 1 1 1 1 1 1 1
Monroe............... OH........................ 2 2 2 2 2 1 1 1 1 1 1 1 1
Morgan............... OH........................ 2 2 2 2 2 2 1 1 1 1 1 1 1
Muskingum............ OH........................ 2 2 2 2 2 2 2 2 2 2 2 2 2
Noble................ OH........................ 2 2 2 2 2 2 2 2 2 2 2 2 2
Perry................ OH........................ 2 2 2 2 2 2 1 1 1 2 2 2 2
Pike................. OH........................ 1 1 1 1 1 1 1 1 1 1 1 1 1
Ross................. OH........................ 2 2 2 2 2 2 2 2 2 2 2 2 2
Scioto............... OH........................ 2 2 2 2 2 1 1 1 1 1 1 1 1
Tuscarawas........... OH........................ 2 2 2 2 2 2 2 2 2 2 2 2 2
Vinton............... OH........................ 2 2 2 2 2 1 1 1 1 1 1 1 1
Washington........... OH........................ 2 2 2 2 2 2 2 2 2 2 2 2 2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Tabel 3.--Educational Attainment in Appalachian Counties based on the 1990 Census
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Completed Total
FY2000 Population 8th Grade Total High Associate Number Completed Dropouts
State County EC Level 25 Yrs + Completed Number HS School Degree College College HS Dropouts (percent)
Grads (percent) Grads (percent)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
OH.................................... Adams.................... 1 15,569 3,226 9,090 58.4% 549 812 5.2% 6,479.................... 41.6%
OH.................................... Athens................... 1 30,179 2,455 22,517 74.6 1,732 7,065 23.4 7,662.................... 25.4
OH.................................... Belmont.................. 2 48,645 5,637 35,191 72.3 2,496 4,391 9.0 13,454................... 27.7
OH.................................... Brown.................... 2 21,769 3,076 14,130 64.9 875 1,614 7.4 7,639.................... 35.1
OH.................................... Carroll.................. 2 17,124 1,627 12,248 71.5 591 1,348 7.9 4,876.................... 28.5
OH.................................... Clermont................. 3 91,613 8,826 66,679 72.8 4,772 13,266 14.5 24,934................... 27.2
OH.................................... Columbiana............... 2 70,249 6,847 50,439 71.8 3,198 5,998 8.5 19,810................... 28.2
OH.................................... Coshocton................ 2 22,878 2,450 16,319 71.3 809 1,863 8.1 6,559.................... 28.7
OH.................................... Gallia................... 1 19,586 3,235 12,570 64.2 795 2,130 10.9 7,016.................... 35.8
OH.................................... Guernsey................. 2 25,188 2,462 17,974 71.4 1,082 2,322 9.2 7,214.................... 28.6
OH.................................... Harrison................. 2 10,726 1,182 7,482 69.8 382 750 7.0 3,244.................... 30.2
OH.................................... Highland................. 2 22,784 3,018 15,147 66.5 929 1,876 8.2 7,637.................... 33.5
OH.................................... Hocking.................. 2 16,368 1,659 11,105 67.8 771 1,333 8.1 5,263.................... 32.2
OH.................................... Holmes................... 2 17,780 5,863 8,341 46.9 489 1,170 6.6 9,439.................... 53.1
OH.................................... Jackson.................. 2 19,136 3,042 11,650 60.9 598 1,504 7.9 7,486.................... 39.1
OH.................................... Jefferson................ 2 54,294 5,766 39,026 71.9 2,713 4,803 8.8 15,268................... 28.1
OH.................................... Lawrence................. 2 39,219 5,180 25,837 65.9 1,553 3,235 8.2 13,382................... 34.1
OH.................................... Meigs.................... 1 14,772 2,258 9,458 64.0 651 1,074 7.3 5,314.................... 36.0
OH.................................... Monroe................... 1 10,196 1,453 7,081 69.4 383 689 6.8 3,115.................... 30.6
OH.................................... Morgan................... 1 8,980 963 6,428 71.6 360 662 7.4 2,552.................... 28.4
OH.................................... Muskingum................ 2 51,692 4,977 36,774 71.1 2,722 5,199 10.1 14,918................... 28.9
OH.................................... Noble.................... 2 7,235 673 5,054 69.9 237 403 5.6 2,181.................... 30.1
OH.................................... Perry.................... 2 19,411 2,028 13,307 68.6 832 1,130 5.8 6,104.................... 31.4
OH.................................... Pike..................... 1 15,099 2,719 9,176 60.8 678 1,201 8.0 5,923.................... 39.2
OH.................................... Ross..................... 2 45,531 4,821 30,770 67.6 2,220 4,207 9.2 14,761................... 32.4
OH.................................... Scioto................... 1 51,585 8,456 32,889 63.8 2,727 4,380 8.5 18,696................... 36.2
OH.................................... Tuscarawas............... 2 55,192 5,563 39,693 71.9 2,235 4,986 9.0 15,499................... 28.1
OH.................................... Vinton................... 1 6,963 1,147 4,087 58.7 215 336 4.8 2,876.................... 41.3
OH.................................... Washington............... 2 40,411 3,214 31,321 77.5 2,336 5,346 13.2 9,090.................... 22.5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Table 4.--Economic Base Analysis
----------------------------------------------------------------------------------------------------------------
Percent
SIC Industry Sector Jobs(96) of Emp LQ
----------------------------------------------------------------------------------------------------------------
Adams, Ohio, FIPS Code: 39001, Distressed Status: 1
8000.................... Health services............ SER 598 14.9% 1.38
5800.................... Eating and drinking places. RET 463 11.5 1.59
2400.................... Lumber and wood products... MFG 456 11.3 15.83
5400.................... Food stores................ RET 306 7.6 2.36
5500.................... Automotive dealers & RET 224 5.6 2.51
Service Stations.
5300.................... General merchandise stores. RET 164 4.1 1.84
5900.................... Miscellaneous retail....... RET 157 3.9 1.51
3700.................... Transportation equipment... MFG 154 3.8 2.57
3500.................... Industrial machinery and MFG 146 3.6 1.93
equipment.
8300.................... Social services............ SER 143 3.6 1.58
0700.................... Agricultural services...... AFF 87 2.2 3.52
1400.................... Nonmetallic minerals, MIN 76 1.9 19.16
except fuels.
2300.................... Apparel and other textile MFG 68 1.7 2.05
products.
5200.................... Building materials & garden RET 64 1.6 2.12
supplies.
4900.................... Electric, gas, and sanitary TPU 55 1.4 1.59
services.
4970.................... Administrative and TPU 14 0.3 1.95
auxiliary.
Athens, Ohio, FIPS Code: 39009, Distressed Status: 1
5800.................... Eating and drinking places. RET 1867 15.8 2.17
8000.................... Health services............ SER 1735 14.6 1.36
5400.................... Food stores................ RET 750 6.3 1.96
5900.................... Miscellaneous retail....... RET 646 5.5 2.11
8300.................... Social services............ SER 543 4.6 2.03
6500.................... Real estate................ FIR 467 3.9 2.83
3100.................... Leather and leather MFG 333 2.8 33.21
products.
2300.................... Apparel and other textile MFG 333 2.8 3.41
products.
2700.................... Printing and publishing.... MFG 296 2.5 1.71
4900.................... Electric, gas, and sanitary TPU 192 1.6 1.88
services.
5200.................... Building materials & garden TPU 153 1.3 1.72
supplies.
3900.................... Miscellaneous manufacturing MFG 149 1.3 3.28
industries.
0800.................... Forestry................... AFF 7 0.1 2.82
Belmont, Ohio, FIPS Code: 39013, Distressed Status: 2
8000.................... Health services............ SER 3288 18.5 1.72
5800.................... Eating and drinking places. RET 1905 10.7 1.48
5400.................... Food stores................ RET 1241 7.0 2.16
5300.................... General merchandise stores. RET 1083 6.1 2.76
5500.................... Automotive dealers & RET 640 3.6 1.62
service stations.
3400.................... Fabricated metal products.. MFG 600 3.4 2.36
1200.................... Coal mining................ MIN 545 3.1 33.20
5600.................... Apparel and accessory RET 349 2.0 1.90
stores.
2300.................... Apparel and other textile MFG 317 1.8 2.16
products.
5700.................... Furniture and home RET 287 1.6 1.88
furnishings stores.
4900.................... Electric, gas, and sanitary TPU 247 1.4 1.62
services.
Gallia, Ohio, FIPS Code: 39053, Distressed Status: 1
8000.................... Health services............ SER 1911 21.4 1.99
4900.................... Electric, gas, and sanitary TPU 1014 11.4 13.21
services.
3600.................... Electronic & other electric MFG 467 5.2 3.46
equipment.
8200.................... Educational services....... SER 405 4.5 2.20
5500.................... Automotive dealers & RET 362 4.1 1.83
Service stations.
3700.................... Transportation equipment... MFG 255 2.9 1.92
5200.................... Building materials & garden RET 122 1.4 1.82
supplies.
1200.................... Coal mining................ MIN 60 0.7 7.27
2900.................... Petroleum and coal products MFG 31 0.3 3.27
Guernsey, Ohio, FIPS Code: 39059, Distressed Status: 2
8000.................... Health services............ SER 1835 15.2 1.41
3000.................... Rubber and misc. plastics MFG 987 8.2 8.37
products.
3500.................... Industrial machinery and MFG 454 3.8 2.00
equipment.
3600.................... Electronic & other electric MFG 438 3.6 2.40
equipment.
5500.................... Automotive dealers & RET 426 3.5 1.59
service stations.
3400.................... Fabricated metal products.. MFG 386 3.2 2.23
3200.................... Stone, Clay, and glass MFG 305 2.5 5.21
products.
2800.................... Chemicals and allied MFG 268 2.2 2.72
products.
4900.................... Electric, gas, and sanitary TPU 236 2.0 2.27
services.
1200.................... Coal mining................ MIN 223 1.8 19.97
1600.................... Heavy construction, ex. CON 169 1.4 2.01
building.
2600.................... Paper and allied products.. MFG 127 1.1 1.72
1300.................... Oil and gas extraction..... MIN 80 0.7 2.63
6700.................... Holding and other FIR 68 0.6 1.90
investment offices.
Harrison, Ohio, FIPS Code: 39067, Distressed Status: 2
8000.................... Health services............ SER 427 15.1 1.41
2400.................... Lumber and wood products... MFG 386 13.7 19.09
1200.................... Coal mining................ MIN 272 9.6 04.3
5000.................... Wholesale trade-durable WHL 189 6.7 1.83
goods.
5400.................... Food stores................ RET 151 5.4 1.66
2700.................... Printing and publishing.... MFG 131 4.6 3.18
3500.................... Industrial machinery and MFG 96 3.4 1.81
equipment.
6500.................... Real estate................ FIR 91 3.2 2.32
3200.................... Stone, clay, and glass MFG 50 1.8 3.66
products.
4400.................... Water transportation....... TPU 14 0.5 3.02
0800.................... Forestry................... AFF 2 0.1 3.39
Jackson, Ohio, FIPS Code: 39079, Distressed Status: 2
2000.................... Food and kindred products.. MFG 1841 18.3 12.16
6100.................... Nondepository institutions. FIR 846 8.4 15.96
3000.................... Rubber and misc. plastics MFG 531 5.3 5.42
products.
6000.................... Depository institutions.... FIR 497 5.0 2.46
2400.................... Lumber and wood products... MFG 474 4.7 6.59
5500.................... Automotive dealers & RET 383 3.8 1.72
service stations.
3300.................... Primary metal industries... MFG 211 2.1 3.14
3200.................... Stone, clay, and glass MFG 178 1.8 3.66
products.
2300.................... Apparel and other textile MFG 158 1.6 1.91
products.
1200.................... Coal mining................ MIN 147 1.5 15.85
1400.................... Nonmetallic minerals, MIN 29 0.3 2.93
except fuels.
Jefferson, Ohio, FIPS Code: 39081, Distressed Status: 2
8000.................... Health services............ SER 3363 15.3 1.42
3300.................... Primary metal industries... MFG 3331 15.1 22.65
8200.................... Educational services....... SER 1290 5.9 2.85
5400.................... Food stores................ RET 1232 5.6 1.73
4900.................... Electric, gas, and sanitary TPU 1111 5.1 5.88
services.
5300.................... General merchandise stores. RET 737 3.4 1.51
8600.................... Membership organizations... SER 735 3.3 1.54
7200.................... Personal services.......... SER 503 2.3 1.81
1200.................... Coal mining................ MIN 73 0.3 3.59
0800.................... Forestry................... AFF 8 0.0 1.74
Meigs, Ohio, FIPS Code: 39105, Distressed Status: 1
1200.................... Coal mining................ MIN 772 24.2 61.5
8000.................... Health services............ SER 451 14.1 1.31
5400.................... Food stores................ RET 229 7.2 2.22
5500.................... Automotive dealers & RET 120 3.8 1.69
service stations.
1500.................... General contractors and CON 72 2.3 1.84
operative builder.
1300.................... Oil and gas extraction..... MIN 55 1.7 6.85
5200.................... Building materials & garden RET 42 1.3 1.75
supplies.
2400.................... Lumber and wood products... MFG 36 1.1 1.57
1400.................... Nonmetallic minerals, MIN 34 1.1 10.79
except fuels.
4400.................... Water transportation....... TPU 8 0.3 1.52
Monroe, Ohio, FIPS Code: 39111, Distressed Status: 1
3300.................... Primary metal industries... MFG 2340 54.9 82.12
1200.................... Coal mining................ MIN 335 7.9 85.06
3990.................... Administrative and MFG 100 2.3 1.77
auxiliary.
2400.................... Lumber and wood products... MFG 67 1.6 2.19
1400.................... Nonmetallic minerals, MIN 9 0.2 2.14
except fuels.
Morgan, Ohio, FIPS Code: 39115, Distressed Status: 1
2400.................... Lumber and wood products... MFG 352 16.1 22.40
8000.................... Health services............ SER 327 14.9 1.39
3500.................... Industrial machinery and MFG 324 14.8 7.86
equipment.
3400.................... Fabricated metal products.. MFG 142 6.5 4.53
5400.................... Food stores................ RET 131 6.0 1.85
5500.................... Automotive dealers & RET 91 4.1 1.87
service stations.
6000.................... Depository institutions.... FIR 76 3.5 1.72
1600.................... Heavy construction, ex. CON 40 1.8 2.63
building.
2500.................... Furniture and fixtures..... MFG 20 0.9 1.87
1400.................... Nonmetallic minerals, MIN 17 0.8 7.86
except fuels.
Perry, Ohio, FIPS Code: 39127, Distressed Status: 1
3300.................... Primary metal industries... MFG 665 14.8 22.1
8000.................... Health services............ SER 581 12.9 1.20
3200.................... Stone, clay, and glass MFG 474 10.5 21.74
products.
5400.................... Food stores................ RET 251 5.6 1.73
3500.................... Industrial machinery and MFG 233 5.2 2.76
equipment.
8300.................... Social services............ SER 187 4.2 1.84
8600.................... Membership organizations... SER 156 3.5 1.60
5500.................... Automotive dealers & RET 155 3.4 1.55
service stations.
1300.................... Oil and gas extraction..... MIN 116 2.6 10.26
5200.................... Building materials & garden RET 55 1.2 1.63
supplies.
1400.................... Nonmetallic minerals, MIN 46 1.0 10.36
except fuels.
1200.................... Coal mining................ MIN 37 0.8 8.90
2900.................... Petroleum and coal products MFG 16 0.4 3.35
Pike, Ohio, FIPS Code: 39131, Distressed Status: 1
2800.................... Chemicals and allied MFG 2500 30.0 36.78
products.
2400.................... Lumber and wood products... MFG 1946 23.3 32.57
8300.................... Social services............ SER 331 4.0 1.76
Scioto, Ohio, FIPS Code: 39145, Distressed Status: 1
8000.................... Health services............ SER 4180 23.4 2.18
5800.................... Eating and drinking places. RET 2264 12.7 1.75
5400.................... Food stores................ RET 1037 5.8 1.80
5500.................... Automotive dealers & RET 719 4.0 1.81
service stations.
5300.................... General merchandise stores. RET 678 3.8 1.71
8300.................... Social services............ SER 653 3.7 1.62
3300.................... Primary metal industries... MFG 621 3.5 5.20
7200.................... Personal services.......... SER 355 2.0 1.57
2200.................... Textile mill products...... MFG 325 1.8 3.19
3200.................... Stone, clay, and glass MFG 282 1.6 3.25
products.
2400.................... Lumber and wood products... MFG 250 1.4 1.95
4100.................... Local and interurban TPU 152 0.9 2.07
passenger transit.
Vinton, Ohio, FIPS Code: 39163, Distressed Status: 1
2400.................... Lumber and wood products... MFG 387 23.5 32.75
2800.................... Chemicals and allied MFG 289 17.5 21.50
products.
8000.................... Health services............ SER 173 10.5 0.98
5400.................... Food stores................ RET 117 7.1 2.20
4200.................... Trucking and warehousing... TPU 112 6.8 3.75
1200.................... Coal mining................ MIN 110 6.7 72.17
6000.................... Depository institutions.... FIR 70 4.2 2.10
4100.................... Local and interurban TPU 26 1.6 3.84
passenger transit.
5200.................... Building materials & garden RET 26 1.6 2.10
supplies.
6700.................... Holding and other FIR 11 0.7 2.25
investment offices.
----------------------------------------------------------------------------------------------------------------
Status of Corridors in Ohio
Appalachian Development Highway System (ADHS) Ohio Corridors as of
September 30, 1999
Summary
------------------------------------------------------------------------
------------------------------------------------------------------------
Total Number of ADHS Miles................ 303.6 miles
Number of ADHS Miles Eligible for Funding. 201.7 miles
Number of ADHS Miles Open to Traffic...... 161.6 miles
Miles Remaining to be Completed........... 40.1 miles
-----------------------------
Total ADHS-Funded Obligations (Federal $274.4 million
and State).
Estimated Cost to Complete, Federal and $391.8 million
State Funds (as of September 30, 1996).
Corridor B.............................. $204.8 million
Corridor B1............................. complete
Corridor C.............................. $58.0 million
Corridor C1............................. added since the 1997 Cost
Estimate
Corridor D.............................. $129.0 million
------------------------------------------------------------------------
FEDERAL FUNDING FOR OHIO CORRIDORS IN FISCAL YEAR 1999
In fiscal year 1999 Ohio was apportioned $22,008,205 from TEA-21
for use on their ADHS Corridors. In addition, Ohio received $1,125,000
in Demonstration Funds from Section 1602 of TEA-21, ($562,500 for
Corridor B and $562,500 for Corridor C1).
FISCAL YEAR 1999 OBLIGATIONS
During fiscal year 1999 Ohio obligated $19.4 million in TEA-21
funds on the ADHS.
FEDERAL FUNDING FOR FISCAL YEAR 2000
Ohio's TEA-21 apportionment for FY 2000 was $22,008,205. Ohio also
received $1,350,000 in Demonstration Funds from Section 1602 of TEA-21
($675,000 for Corridor B and $675,000 for Corridor C1).
status of corridors
Corridor B (State Route 253, U.S. 52, U.S. 23)
Corridor B runs from the Kentucky State line at Greenup Dam along
the Ohio River around Portsmouth and northwest to Corridor C near
Lucasville. The total length of the corridor is 33.6 miles.
------------------------------------------------------------------------
------------------------------------------------------------------------
Authorized for Funding.................... 26.0 miles
Open to Traffic........................... 10.1 miles
Design & ROW Under Way.................... 15.9 miles
------------------------------------------------------------------------
Corridor B1 (U.S. 23)
Corridor B1 runs from the Kentucky State line at Portsmouth north
to Corridor B. The total length of the corridor is 4.7 miles.
------------------------------------------------------------------------
------------------------------------------------------------------------
Authorized for Funding.................... 0.5 miles
Open to Traffic........................... 0.5 miles
------------------------------------------------------------------------
Corridor C (U.S. 23)
Corridor C runs from its junction with Corridor B north of
Portsmouth to I-270 at Columbus. The total length of the corridor is
71.7 miles.
------------------------------------------------------------------------
------------------------------------------------------------------------
Authorized for Funding.................... 13.4 miles
Open to Traffic........................... 6.0 miles
Location Studies Under Way................ 7.4 miles
------------------------------------------------------------------------
Projects currently under way on Corridor C in Ohio include:
Location studies of two sections, bypasses of Waverly and
Ashville, on U.S. 23.
Corridor C1 (U.S. 35)
Corridor C1 runs from its junction with Corridor C at Chillicothe
to its junction with Corridor D at Jackson. The total length of
Corridor C1 is 24.0 miles.
------------------------------------------------------------------------
------------------------------------------------------------------------
Authorized for Funding.................... 9.4 miles
Location Studies Under Way................ 9.4 miles
------------------------------------------------------------------------
Corridor D (State Route 32, State Route 124. U.S. 50)
Corridor D runs from 1-275 east of Cincinnati to the West Virginia
State line at Belpre and Parkersburg. The total length of the corridor
is 169.6 miles.
------------------------------------------------------------------------
------------------------------------------------------------------------
Authorized for Funding.................... 152.3 miles
Open to Traffic........................... 144.9 miles
Construction Under Way.................... 6.9 miles
Location Studies Under Way................ 0.5 miles
------------------------------------------------------------------------
Projects currently under way on Corridor D in Ohio include:
Construction of 6.9 miles on U.S. 50/State Route 32 east of
Athens.
Statement of Hocking College Appalachian Regional Commission,
Nelsonville, Ohio
Hocking College began as Tri-County Technical Institute in 1968.
The Appalachian Regional Commission (A.R.C.) provided partial funding
for the construction for the first college building. As the college
outgrew the Tri-County facility, A.R.C. provided construction funding
for the first, second and third phases of construction on the 250 acre
site of the present campus. The funding in all of these instances was
primarily for bricks and mortar with some targeted instructional
laboratory equipment. This investment by A.R.C. launched Hocking
College during the late 1960's and 1970's. Without the A.R.C.
investment, Tri-County Technical Institute would not have had the
capability to grow to meet the region's needs.
Hocking College is the largest technical college in Ohio with
nearly 5000 students at the Nelsonville campus and over 1500 students
at other locations throughout the region. Students attend from every
county in Ohio, 30 different States and over 50 different foreign
counties. The Athens, Hocking and Perry County service district is the
smallest population base of any Ohio college district.
An early and continuing A.R.C. initiative is health care. The
shortage of trained personnel in such basic health careers as nursing
was critical. Hocking College began all of its early health education
technologies with assistance from A.R.C. Today, the Hocking College
nursing program has received numerous excellence awards, has the top
average among schools of nursing in Ohio on passage of the State board
exam and graduates more nurses than any other college in Ohio
(including Ohio State University.) The Schools of Nursing and Allied
Health enroll nearly 1000 students annually.
A.R.C. assisted in funding the Hocking Valley Motor Lodge in 1973.
During the last week in July 2000, the student chef team of the Hocking
College Culinary Institute placed second in the nation in the American
Culinary Association annual competition in Nashville, Tennessee.
Hocking College probably would not have had a culinary program, if
A.R.C. had not built what is now the Ramada Inn. In addition to serving
as the laboratory for hospitality technologies, the Inn has hosted
countless events that brought people to Nelsonville and expanded the
service capabilities of the college to its community.
The uniqueness of Hocking College programs has allowed it to
develop as a full time residential college. Over 2000 students move to
the area for residence during their school years. The economic impact
of the resident and commuter (2500) students is very significant.
Program uniqueness has also encouraged the college to host many annual
events. The Paul Bunyan Show, hosted by the forestry technology, is the
largest annual event in southeastern Ohio with an annual economic
impact estimate of over $2 million.
One of the more recent A.R.C./Hocking College projects was the
water and sewer lines for the Perry Campus in New Lexington. A.R.C.
also provided the initial laboratory equipment for the startup of the
Perry Campus. The Ohio Board of Regents does not set aside funds for
new program startup. Consequently, A.R.C. assistance is critical to new
program development that requires extensive laboratory investment. Once
the program has enrollment, Ohio Board of Regents funding is adequate
to sustain most programs. But, without A.R.C., startup costs are often
a major impediment. It is important to remember that Ohio is in the
bottom \1/3\ of States, in terms of support for higher education.
Participation rates also lag other States. Participation rates in
Appalachia remains lower than the statewide average.
A.R.C. and specifically the Buckeye Hills Hocking Valley Regional
Development District has provided excellent planning and economic
development assistance. The goals and strategies which are constantly
updated have assisted Hocking College and all agencies in the region
with garnering additional private and public funds. The response and
often the willing partnering of Buckeye Hills Hocking Valley Regional
Development has provided the strength that individual agencies, even a
State-assisted college, can't muster by themselves.
In spite of the good works, and outstanding cooperation on regional
issues, A.R.C. has not led the region into uniform economic prosperity.
While the evolution of economic prosperity is somewhat mystic, the
tangible contributions of A.R.C. are perhaps most recognizable at
places like Hocking College. Not only have thousands of Appalachian
youth and adults received the very best career education, but thousands
more have come to the region, contributed to it and move on because of
the attraction of the programs of Hocking College. At least, part of
the mystery of positive regional economics is about creating
attractions i.e. attractions for commercial investment or attractions
for individual investments. Individuals invest two years of their time
in Nelsonville when they attend attractive programs at Hocking College.
The Hocking Valley Scenic Railroad and Robbins Crossing on the
Hocking College campus attract over 30,000 visitors annually. Any
enhancement that A.R.C. can provide to existing attractions will have
continued long range positive economic impact. Perhaps the greatest
current attraction is an available labor pool. Appalachians are known
for their outstanding work ethic. The current problem is lack of
technology skills. High school completion rates are low. Higher
education participation is low. Investment in technical education for
18 to 30 years of age is a no brainer. This investment would be an
outstanding commercial attraction. An attraction that would bring jobs
and long term careers
In looking to the future of the region and reflecting on
investments of the past, stewardship remains a critical force. Every
investment will not pay huge economic dividends. There will be
disappointments. In the long run, the investments made with eye to the
permanence of their steward will have lasting value. A.R.C. for the
most part has provided resources to permanent institutions of the
region. This practice should continue to build the region's economy.
Overall, ARC has become a keystone in the regional economy. An economy
that desperately needs to expand. Changing the keystones configuration
will have a significant regional economic effect.
__________
Social and Economic Status of Appalachia
POPULATION
With a population of 1.5 million (based on 1998 population
estimates), Appalachia Ohio represents only 13 percent of Ohio's total
population of 11.3 million. The region, however, makes up one-third of
the State's total geographic area.
While the State has seen a net migration of -157,655 from 1987 to
1998, many Appalachian counties have seen positive net migration.
The following depicts counties with positive net migrations over
1,000 persons from 1987 to 1998.
------------------------------------------------------------------------
------------------------------------------------------------------------
Columbiana................................................. 1197
Meigs...................................................... 1200
Perry...................................................... 1292
Lawrence................................................... 1295
Jackson.................................................... 1387
Tuscarawas................................................. 1912
Adams...................................................... 2058
Hocking.................................................... 2266
Carroll.................................................... 2621
Pike....................................................... 3598
Ross....................................................... 4109
Highland................................................... 4119
Brown...................................................... 4843
Clermont................................................... 16181
------------------------------------------------------------------------
The following depicts counties with negative net migrations from
1987 to 1999:
------------------------------------------------------------------------
------------------------------------------------------------------------
Jefferson.................................................. -5411
Belmont.................................................... -1925
Holmes..................................................... -1170
Washington................................................. -921
Scioto..................................................... -914
Muskingum.................................................. -784
Harrison................................................... -547
Monroe..................................................... -515
Athens..................................................... -322
------------------------------------------------------------------------
The remaining five counties: Coshocton, Gallia, Guernsey, Morgan,
Noble and Vinton.
EDUCATION
From 1980 to 1990, the percent of high school graduates increased
from 59.8 percent to 69.2 percent in Appalachia Ohio. The greatest
percent increase of 12 percent occurred in both Clermont and Brown
Counties. The lowest increase, 4 percent, occurred in Holmes County. To
what extent the large Amish population (who traditionally does not
attain education beyond the 8th grade) influenced the numbers in Holmes
County is unknown. Current statistics regarding Ohio's graduation rates
will not be made available until 2003, when the Census data for 1990-
2000 will be distributed. In addition to the Census data, Ohio will be
examining student achievement through its mandatory proficiency testing
systems for 4th, 6th, 9th, and 12th grade students.
Schools within Appalachia are increasing their percentages of
students attending college. Beaver Local High School in Columbiana
County has increased its percentage from 48 percent in FY 1996 to 58.1
percent in FY 1999. Buckeye Local High School in Jefferson County has
increased its rate from 53 percent in FY 1994 to 64 percent in FY 1999.
There are several other examples of this successful increase in
college-going rate. These schools have participated in an ARC-sponsored
program known as the Ohio Appalachian Center for Higher Education
(OACHE). Statistics are not available for the entire area at this time.
ECONOMIC
Per capita income (PCI), as an average for Ohio in 1998, totaled
$26,073 and a corollary to this PCI dollar amount, the percent change
from 1993 to 1998 for Ohio was nearly 20 percent. The Appalachian
region had a Per capita income of $18,538 in 1998, thirty percent lower
than the State's average. In 1998, the highest Appalachian PCI was in
Clermont County with $24,828; the lowest was $13,564 in Noble County.
The State of Ohio's average unemployment was 4.4 percent in 1999.
Such is not the case in Appalachia Ohio where only two Appalachia
counties (Holmes and Clermont) fell below the State's rate in 1998.
Double-digit unemployment rates were observed in Adams (10.9 percent),
Meigs (10.5 percent), Morgan (13.1 percent), and Vinton (10.9 percent)
counties. All four of these counties ranked in the top four in the
State for their high rates.
HEALTH CARE
The three leading causes of death in both the Appalachian region
and the nation are chronic heart disease, malignant neoplasm and other
cardiovascular diseases. They account for 2/3 of all deaths in the
region. ``Of the 398 Counties (In 1994, there were only 398 counties)
of the Appalachian region, 67 have an age adjusted cancer mortality
rate that is lower than the U.S. mean, and 37 counties have an age
adjusted rate higher than the U.S. mean. . . . Cancer is a problem of
about the same magnitude in Appalachia as in the rest of the United
States. The exception to this generalization is the string of counties
beginning in Alabama and extending along the Cumberland Mountains from
Tennessee through Kentucky and West Virginia and into Ohio and western
Pennsylvania where cancer mortality rates are significantly higher than
the rest of the nation''. (National Institutes of Health. Sowing Seeds
in the Mountains. Pg. 54. September 1994)
According to the Robert C. Byrd Health Sciences Center at West
Virginia University in their report ``Heart Disease in Appalachia,''
they found that for chronic heart disease mortality from 1983-1993 was
consistently higher in Appalachia than the entire United States for
white adults. For African American adults, there was little difference
between Appalachia and the entire nation. They also reported that high
rates of chronic heart disease mortality were concentrated mainly in
central Appalachia counties including southern Ohio.
Many health programs are not equipped to identify mental health
issues and Alcoholism, however practitioners in the region do recognize
that serious problems exist in Southeastern Ohio.
According to the National Institute of Health's Appalachian
Initiative on Cancer, programs designed to promote health at the
community level need to be based on the recognition that the state of
people's health is deeply rooted in the daily conditions of their
lives.
By measuring the infant mortality rates, Ohio is able to assess one
aspect of health care in its Appalachian counties. To reduce dramatic
swings in rates, the data were compiled in 3-year cycles. The most
recent data measuring Infant mortality rates indicate that Appalachia
Ohio is fairly consistent with the region and the nation. In the three-
year cycle from 1992-1994, Ohio Appalachia's rate was 8.3 percent,
which was the same as the region and one-tenth of a percent above the
national average. This figure, however, is deceptive in that the range
of infant mortality rates among Ohio Appalachian counties vary
considerably. The highest rate of 16.4 percent is found in Meigs County
compared to 2.3 percent in Noble County.
Another indicator of health care in Appalachia is the number of
Health Professional Shortage Areas (HPSAs). The U.S. Department of
Health and Human Services designate HPSAs. The designation is
indicative of a shortage of primary care physicians in a rational
service area. Shortage areas are identified through analysis of
physician/population ratios. Twenty-four of the 29 Appalachian counties
have areas that are considered HPSAs.
TRAVEL AND TOURISM
According to a Travel Tourism Economic Impacts report by
MarketVision Research, the following data was recorded for Appalachia
Ohio for 1998:
------------------------------------------------------------------------
------------------------------------------------------------------------
Direct Employment (Jobs)....................... $20,580
Direct Output (Sales Receipts)................. 563,236,000
Direct Payroll................................. 194,325,000
Consumer Sales Tax Receipts.................... 26,572,000
Motor Fuel Tax................................. 8,035,000
Personal Income Tax Receipts................... 6,704,000
Corporate Net Income Tax Receipts.............. 1,152,000
------------------------------------------------------------------------
Note: The 1999 report should be available in late August 2000 and
will provide a clearer picture of county variations in tourism
activity.
PHYSICAL INFRASTRUCTURE
The overall needs in terms of infrastructure development in
Appalachia Ohio can be summarized in two broad categories: new/
expansion and repair/replacement infrastructure. In terms of new/
expansion infrastructure, many of Ohio Appalachia's small communities
lack potable water and sanitary sewer service. This situation is more
pronounced in distressed counties. Typically, these are residential
needs that have a community development orientation. Often these
communities face Environmental Protection Agency (EPA) findings and
orders and need to make improvements for the sake of public health and
safety. The job creating economic development projects typically happen
in or on the fringe of municipalities. In these cases, infrastructure
expansion which may include extending water, sewer, rail lines, and
other inter-modal transportation systems, or water and wastewater
treatment plant upgrades are needed to support the increased usage. New
and/or expanded access roads are also needed to support industrial/
business/commercial parks.
APPALACHIAN DEVELOPMENT HIGHWAY SYSTEM (ADHS)
In 1964, the President's Appalachian Regional Commission (PARC)
reported to Congress that economic growth in Appalachia would not be
possible until the Region's isolation had been overcome. Because the
cost of building roads through Appalachia's mountainous terrain was
high, the Region had never been served by adequate roads. Its network
of narrow, winding, two-lane roads, snaking through narrow stream
valleys or over mountaintops, was slow to drive, unsafe, and in many
places worn out. When the Interstate system was built, large areas of
Appalachia were simply bypassed, compounding the problems of the
Region's troubled economy.
The PARC Report and the Appalachian governors placed top priority
on a modern highway system as the key to economic development. Today
the resulting Appalachian Development Highway System (ADHS') is the
backbone of ARC's cooperative regional approach to problem solving and
of all its other development efforts.
By mid-1965, the 13 States, working together, had mapped out most
of the system; ground was broken for the first highway corridor in July
1965. Between 1965 and 1980, Congress authorized a plan for a 3,025-
mile highway system combining new construction with improved existing
roads.
The ADHS in Ohio as of September 30, 1999:
------------------------------------------------------------------------
------------------------------------------------------------------------
Total Number of ADHS Miles................ 303.6 miles
Number of ADHS Miles Eligible for Funding. 201.7 miles
Number of ADHS Miles Open to Traffic...... 161.6 miles
Miles Remaining to Be Completed........... 40.1 miles
Estimated Cost to Complete (Federal and $391.8 Million
State Funds as of September 30, 1996).
------------------------------------------------------------------------
Ohio was apportioned $22,008,205 from TEA-21 for use on the ADHS
corridors for both Federal fiscal year 1999 and FY 2000. Ohio obligated
$ 19.4 Million in TEA-21 funds for FY 1999. In addition, Ohio received
$1,125,000 in Demonstration Funds from Section 1602 of TEA-21,
($562,500 for Corridor B and $562,500 for Corridor C1) in FY 1999 and
$1,350,000 in Demonstration Funds from Section 1602 of TEA-21 ($675,000
for Corridor B and $675,000 for Corridor C).
__________
From 1998 to mid-1999, over 3,000 jobs had been lost or were in the
process of being lost in Regions 7 and 11. Below is an updated list
from 1999 through 2001.
----------------------------------------------------------------------------------------------------------------
Company County Jobs Lost Status
----------------------------------------------------------------------------------------------------------------
Trinity Industries................... Brown.................. 200.................... Closing July 2000
Goodyear............................. Hocking................ 600.................... Closed October 1999
Internet............................. Lawrence............... 619.................... Closed March 2000
Cabletron............................ Lawrence............... 300.................... Closed March 1999
Allied Signal........................ Lawrence............... 48..................... Layoffs in May 1999
Southern Ohio Coal................... Meigs.................. 830.................... Tentative closure in
2001
Consol Coal.......................... Monroe................. 300.................... Layoffs 1998; closed
mid-1999
Ormet Corp........................... Monroe................. 270.................... Layoffs in June 2000
(hopefully temporary)
Central Ohio Coal.................... Noble/Morgan........... 230.................... Layoffs in 1999 closure
planned for 2000
USEC................................. Pike................... 1,900.................. Closure by June 2001
Kenworth/Paccar...................... Ross................... 300+................... Layoffs in July or
August 2000
Eramet............................... Washington............. 70..................... Layoffs by end of 2000
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Total............................ ...................... 5,667 Jobs.............
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We calculate 5,667 direct jobs are being lost, which is over 22 percent of Total Manufacturing Employment in the
10 affected Counties. The jobs being lost are high paying (mostly union) jobs. Given that these jobs are some
of the few value-added jobs in the region, they support many retail, service and government jobs (a multiplier
as high as 5-to-1 for mining jobs). The effect of the loss of these jobs will be devastating to the region.
Very, very few high-wage jobs are being created in the region to replace these jobs. We cannot state
emphatically enough just how critical the situation is becoming in southern Ohio. We fear that when the
economy turns down, the situation will deteriorate further.