When I arrived in the Senate last year, one of the greatest honors and privileges that I received was to be appointed Chairman of the Subcommittee on Transportation and Infrastructure. One of the reasons I am pleased to be Chairman is the fact that this subcommittee has oversight jurisdiction over the Appalachian Regional Commission (ARC). As a Senator who represents one of the thirteen states within the ARC, my chairmanship gives me a great opportunity to focus on issues of direct importance to this region of our nation.
As you may know, the current authorization of the ARC is set to expire in 2001, and as such, my Senate colleagues and I will be working to reauthorize the ARC during the remainder of this year and into the next. What we hope to accomplish today is obtain an overview of the importance of ARC programs to Appalachia, and to closely examine the progress that has 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.
To help us meet this objective, we have assembled an impressive array of witnesses who will testify about the ARC and the variety of ways ARC funds can be used to foster local economic and social development. I would like to welcome them and thank them for coming here today. I am certain that their input will prove valuable.
In 1965, Congress established the ARC to bring the Appalachian region of our nation into the mainstream of the American economy. This region includes 406 counties in 13 states - including Ohio - and has a population of about 22 million people. The ARC is composed of the governors of the 13 Appalachian states and a federal representative who is appointed by the President. The federal representative serves as the Federal Co-Chairman with the governors electing one of their number to serve as the States' Co-Chairman.
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, education and training, health care, housing, enterprise development, export promotion, telecommunications, and water and sewer infrastructure. All of these activities help achieve the goal of a viable and self-sustaining regional economy and address the five goals identified by ARC in its strategic plan: (1) developing a knowledgeable and skilled population; (2) strengthening the regions's physical infrastructure; (3) building a local and regional capacity; (4) creating a dynamic economic base; and (5) fostering a healthy people.
ARC's programs fall into two broad categories. The first is a 3,025 mile corridor highway system to break the regional isolation created by the mountainous terrain, thereby linking the Appalachian communities to national and international markets. Roughly 80 percent of the Appalachian Development Highway System is either completed or under construction.
The second is an area development program to create a basis for sustained local economic growth. Ranging from water to sewer infrastructure to worker training to business financing and community leadership development, these projects provide Appalachian 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 that are covered by the ARC, according to four categories: distressed, transitional, competitive, and attainment. These categories determine the extent for potential ARC support for specific projects. They also help ensure that support goes to the areas with the greatest need. Distressed counties are the poorest of the poor, with unemployment at least 150 percent of the national average, a poverty rate of at least 150 percent of the national average, and per capita market income of no more than two-thirds of the national average. This means that a distressed county has an unemployment rate of greater than 8 percent, a poverty rate of at least 19.7 percent, and per capita market income of less than $ 13,674. In fiscal year 2000, 111 counties, or roughly one-fourth of the counties in the ARC, are classified as distressed. Nine of these counties are in Ohio.
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. In rough figures, every ARC dollar Ohio received in fiscal year 1999 leveraged approximately $2.25 in additional federal, state and local funds. In Ohio, ARC funds support projects in five goal areas: skills and knowledge, physical infrastructure, community capacity, dynamic local economies, and health care. In fiscal year 1999, ARC provided approximately $6 million to fund projects in Ohio. Roughly 40 percent of this funding was spent exclusively on projects in Ohio's nine distressed counties. Moreover, ARC announced last year that the agency had spent about half of its project funding on programs that included the region's poorest counties. This successful partnership enables communities in Ohio and throughout Appalachia to have tailored programs which help them to respond to a variety of grassroots needs.
Since 1965, the ARC has had a dramatic effect in improving the lives of Appalachian citizens -- helping to cut the region's poverty rate in half, lowering the infant mortality rate by two-thirds, doubling the percentage of high school graduates, slowing the region's out-migration, and reducing unemployment rates.
Despite its successes to date, the ARC has not completed its mission in Southeastern Ohio and throughout Appalachia. The ARC is the type of federal initiative that the federal government should be encouraging. I know there is a vast reserve of potential in Appalachia that is just waiting to be tapped. I wholeheartedly agree with one of ARC's guiding principles that the most valuable investment that can be made in a region is in its people.
Today's hearing is the first step towards the reauthorization of the ARC. I am anxious to hear the testimony of our witnesses and hear their views as to their experience with the ARC. I am especially interested in hearing from the witnesses, especially what they believe the ARC should be doing in cooperation with other federal and non-federal entities to do the most good for the region's people with limited resources.
Thank you.