Sunday, January 12, 2003

Life remains bleak for some counties in Appalachia

Upgraded status may affect funding

By Lara Jakes Jordan
The Associated Press

FAYETTE CITY, Pa. - From where he sits, Mike Wokaly can't see that things have gotten any better over the last year in this tiny Appalachian town.

Few, if any, new jobs are coming into this corner of southwest Pennsylvania, where poverty and unemployment rates remain high above the national average. People sometimes pay for groceries with pocket change and $2 bills - whatever money they can scrounge up to feed their families.

  Thirty-two Appalachian counties will be upgraded Oct. 1 from an economically distressed status to a county in transition. They are:
• Alabama: Fayette, Winston
• Kentucky: Edmonson, Green, Hart, Lincoln, Pike, Rockcastle, Rowan
• Mississippi: Benton, Monroe, Tishomingo
• North Carolina: Cherokee, Swain
• Ohio: Adams, Gallia, Jackson, Monroe, Morgan
• Pennsylvania: Fayette, Greene
• Tennessee: Jackson, Meigs, Morgan
• Virginia: Lee, Russell
• West Virginia: Jackson, Pocahontas, Raleigh, Randolph, Taylor, Upshur
  Two Appalachian counties will be downgraded from transitional to distressed status:
• Mississippi: Webster
• Tennessee: Grundy
  Source: Appalachian Regional Commission
But federal funding to Fayette City - as well as to hundreds of rural communities along the spine of the Appalachian Mountains - could be cut this year because Washington no longer classifies the local economy as distressed.

"This area has not had any growth in five years. None," said Mr. Wokaly, a 70-year-old retired teacher, truck driver and veteran who lives off his Social Security. "It's bad. Here, we have no economy. How they can cut subsidies to this valley is beyond me. Way beyond me."

Thirty-two counties in the Appalachian region - including Pennsylvania's two poorest, Fayette and Greene - will be upgraded from distressed status to transitional in the 2004 fiscal year, which begins Oct. 1. The decision to do so was made last fall by the Appalachian Regional Commission, a joint federal-state panel based in Washington, which sets what even it describes as extremely tough economic standards for counties to meet in order to qualify as a top funding priority.

Only two Appalachian counties - Webster County, Miss., and Grundy County, Tenn. - will be downgraded from transitional to distressed status.

The ARC provides "glue money" - supplemental funding to help local communities meet state matching dollars for projects such as job training, health clinics, building roads and water and sewer lines, and providing high-speed Internet access in rural areas.

By law, half of all ARC funding must go to distressed counties and areas. This year, ARC meted out $66 million to the 410 counties that make up the swath of Appalachia that stretches from New York to Mississippi. But at least half - $33 million - went directly to the 118 counties currently classified as distressed.

The remaining 292 counties had to fight it out for the leftovers, handed out at the discretion of the 14 members who sit on the ARC - the governors of the 13 Appalachian states and one representative of the federal government.

ARC spokesman Duane DeBruyne said the upgrading of the 32 counties to come off the distressed list reflects a bright shift, even if slight, in their economic forecasts.

"This is good news for the region," Mr. DeBruyne said. "The job clearly is not done; these counties are clearly still significantly distressed. There are still challenges. But we are making progress."

But local economic officials in Appalachia were shocked to hear their counties were no longer considered distressed - or eligible for the exclusive funding.

In Cherokee County, N.C., two blue jeans companies and a furniture factory shuttered their plants within the last several years, eliminating 2,000 jobs just as the 2001 recession hit. A third of those jobs have since been regained, said Cherokee County economic development director Bill Forsyth, but mostly in retail employment that offers neither health benefits nor enough pay to support a family.

The county previously has put ARC funding into its community centers, Mr. Forsyth said.

"We are among the most distressed counties in North Carolina, as far as the state's concerned," Mr. Forsyth said. "Things have definitely gotten worse. Our situation started going downhill in 1999 but has continued to slide."

To qualify as distressed, counties must exceed national poverty and unemployment rates by 150 percent, and fall short of the national per capita income by 66 percent or less.

Fayette County, Pa., for example, met two of the three prongs for 2004.

Its estimated unemployment rate is projected at 6.7 percent, or 157.2 percent of the national average. The national unemployment rate is 4.3 percent. Meanwhile, the county's per capita income is $15,919 - 62 percent of the national $25,676 average.

But Fayette County's poverty rate failed, if barely, to meet the required threshold. Its poverty rate is projected at 18 percent for 2004 - or 145.5 percent of the national average. The national poverty rate is estimated at 12.4 percent.

Tim Marema, programs director for the Center for Rural Strategies in Whitesburg, Ky., questions whether the numbers reflect - or dictate - the accurate story of Appalachia's economy.

"It's very true that counties can move off distressed rolls due to factors that are not about improvement, but actually about decline," Mr. Marema said. "Per capita income can go up when people finally get up and leave. People can get off unemployment when what they're really doing is concluding that there's no chance of getting work, and giving up."

Few doubt that the face of Appalachia as a whole has improved since the ARC was created in 1965 by President Lyndon B. Johnson, who declared his War on Poverty from the porch of a Kentucky shanty. Seven-eighths of Pennsylvania - the entire state except Philadelphia and its most upscale suburbs - was then designated as Appalachia by the federal government. Today, Fayette and Greene counties are the last two considered to be severely distressed.

Greene County officials hope their economic upgrade will convince businesses it is safe to relocate there - even as they worry about losing earmarked aid. "Things are starting to happen. It's just a long process," said county Commissioner Dave Coder. "In certain ways, it's going to make it a little more difficult to get some of these loans, and participate in some of these programs. We're just going to have to work harder."

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