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 "growth-center" 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 more responsive 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 1999
Goal # of Projects
ARC $
Other Fed $
State $
Local $
Total Cost $
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.