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An economy in transition

New Economic Data Show Appalachia’s Struggles Amid Coal’s Decline



Coal cars fill a rail yard in Williamson , W.Va., Friday, Nov. 11, 2016. The hard-eyed view along the Tug Fork River in coal country during the 2016 election, when this photo was taken, was that Donald Trump has to prove he'll help Appalachian mining like he promised, but recent economic data shows the industry is still struggling. Photo: Steve Helber/AP Photo

This article was originally published by Ohio Valley ReSource.

An annual report from the Appalachian Regional Commission shows that while Appalachia is seeing some economic improvement, the heart of the region and its coal-producing communities are still struggling. Several counties in the Ohio Valley are moving in a negative direction in this year’s report. 

The ARC report evaluates the Appalachian region using county-level data on unemployment, per capita market income, and poverty. Counties are rated on a scale with five tiers. At the low end are those “economically distressed,” or those ranking among the worst 10 percent of county economies in the country. At the high end is “attainment,” for those with thriving economies on par with the nation’s top performing places. In between are counties labeled “at risk,” “transitional” or “competitive.”

Ten counties in Kentucky, Ohio and West Virginia are moving in a negative direction. Those are: Rowan Co., Kentucky; Ashtabula, Athens, Coshocton, and Guernsey Counties, Ohio: and Nicholas, Pleasants, and Wirt Counties in West Virginia. 

Just four counties in the Ohio Valley are moving in a positive direction: Cumberland and Garrard Counties, Kentucky; and Hardy and Summers Counties in West Virginia. 

ARC data on economic status of Appalachian counties. Source: ARC

The ARC authors point out that many of the places moving in a negative direction or stuck in the lowest categories are those affected by the downturn in the coal industry. 

“Parts of the Appalachian region face significant economic challenges compared to the rest of the country,” ARC Federal Co-Chair Tim Thomas said in a statement. “ARC is seeking to ensure awareness of these challenges, and to inform policymakers at all levels.” 

Athens County, Ohio, is among those counties that had a negative change and is now in “distressed” status. Jack Frech is an advocate on poverty in the area who worked more than three decades in Athens County’s welfare office.  

He said that wage stagnation, coupled with the “evisceration” of social safety nets, is creating a larger class of working poor. In a “gig” economy with job growth driven by the lower-paying service sector, the nation’s low unemployment rate can be deceptive. 

“People will take any job they can get,” he said. “Which gives us the impression we are doing well, when in fact most of these new jobs do not provide a living wage. Many of them are not even lifting people above the poverty level.” 

ARC spokesperson Wendy Wasserman said the data add context on how the region is doing, and help to determine where investment is needed. 

“The reason we continue to do this is for our investments,” she said. “We do it to help us map out strategic investments in the region.” 

Wasserman said the color-coded map showing different levels of economic status looks like a bullseye of distress over central Appalachia. But it’s slowly been shrinking over time.   

The coming fiscal year will have 80 designated “distressed” counties in Appalachia, the lowest such number since 2008.

An economy in transition

Feds Cite Environmental Challenges, Stall East Kentucky Prison Project



Activists protested the prison project at a 2016 event. Photo: Benny Becker/Ohio Valley ReSource

This article was originally published by the Ohio Valley ReSource.

A federal agency has confirmed plans to withdraw its commitment to build a new prison in eastern Kentucky.

“Given new information received, additional analysis should be undertaken to determine if there are significant new circumstances or information relevant to environmental concerns on the proposed action,” the BOP said an the email to the Ohio Valley ReSource last week.

The Bureau said President Trump’s 2020 budget, which proposed cutting funds for the project, led it to reconsider the development. That budget proposal listed four concerns: trends in the federal prison population reducing the need for a new prison, the cost-effectiveness of construction, the prison’s economic impact, and unspecified project complications.

The proposed prison has received intense backlash from local activists, who cite research showing many rural communities experience little or no economic growth as a result of new prisons.

“It’s not only a great victory for everybody that’s inside these places, their families, people that have worked against this both here and our allies out of state, but also just a good symbolic victory, too,” said Tom Sexton, a local activist who has opposed the prison.

A group of federal inmates sued the bureau last year, claiming that the prison site, a former surface coal mine, is polluted, and that the facility would further disrupt a fragile ecosystem.

“We hope the BOP’s action ends this prison project permanently, and that it also signifies a turning point nationally, away from investing money in prison construction, and toward increased investment in communities devastated by mass incarceration,” said Dustin McDaniel, Executive Director of the Abolitionist Law Center.

The lawsuit is still pending.

Congressman Hal Rogers, whose district includes Letcher County and who sits on the powerful House appropriations committee, has long championed the project and has promised to preserve the roughly $510 million that has been allocated for the site.

Rogers has long argued without evidence that prisons would bring jobs to a district that has been hit hard by the decline in the coal industry. The congressman said in a statement that he shares the frustrations of those in Letcher County who supported the project, and remains committed to its completion.

“BOP leadership has assured me that the Bureau will continue to defend the ongoing litigation and that internal processes related to the Letcher prison construction project continue to move forward,” Rogers said in the statement.

The Letcher County Water District had been slated to receive $4.5 million from the Abandoned Mine Lands Pilot program to deliver water and sewer service to the prison site. Water district manager Mark Lewis said he was “devastated” by the decision, and said his team may no longer be able to bring water to nearby homes that would have been serviced by the new line.

Kentucky Energy and Environment Cabinet spokesperson John Mura said there was one previous instance with the AML Pilot program in which money that had been allocated to one project was directed to another when the first project became unfeasible. “It was very quick,” Mura said.

According to federal regulations, the BOP may reissue its Record of Decision upon the completion of its new analysis.

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An economy in transition

Fact-check: Is West Virginia Poverty 5 Percent Higher than the U.S. as a Whole?



A coal truck drives through an railroad tressel near downtown Welch, W.Va., Wednesday, Feb. 9, 2011. Coal brought a large population to the McDowell County in the 1940's. Now the population is shrinking and the county suffers from unemployment and poverty. Photo: Jon C. Hancock/AP Photo

Kendra Fershee, a Democrat who is challenged U.S. Rep. David McKinley, R-W.Va., took aim at the poverty rate in a Sept. 19 Facebook post.

“Poverty in WV is more than 5% higher than the national average,” Fershee wrote in the post. “The poor are getting (much) poorer and if you look at what my opponent is posting (stories about how great the economy is, using national statistics) he doesn’t even seem to know that there’s a problem in WV.”

She added, “Are you ok with our state diving deeper into despair while our elected officials: vote for policy that drives wages lower, push to strip healthcare from poor people and people with pre-existing conditions, and then pat themselves on the back for a job well done? I’m not. This is unacceptable. But WE can fix it on Nov. 6.”

We wondered whether poverty in West Virginia is more than 5 percent higher than the national average. So we took a closer look.

The post links to a Sept. 18 article in the Parkersburg News and Sentinel headlined, “Poverty increases in W.Va.” According to the article, “About 336,000 West Virginians lived in poverty in 2017, 5.7 percent higher than the national average. West Virginia was among the top four states with poverty rates of 18 percent – Louisiana, Mississippi, New Mexico and West Virginia.”

To confirm the newspaper’s data, we turned to the original figures from the U.S. Census Bureau. The numbers check out: The U.S poverty rate was 13.4 percent, but the West Virginia poverty rate was 19.1. The difference: 5.7 percentage points.

To be precise, however, Fershee should have said that the poverty rate in West Virginia is more than 5 percentage points higher than the United States as a whole — not 5 percent higher. If it were 5 percent higher, the poverty rate in West Virginia would be about 14.1 percent, not 19.1 percent.

So the poverty rate in West Virginia is actually higher than Fershee’s literal words suggested.

In an interview, Fershee said that it’s important to note that “the rest of the country is doing better, and West Virginia’s poverty rate has actually worsened,” said Fershee.

The historical data bears that out. Here’s a chart of the U.S. and West Virginia poverty rates going back to 2005.

In 2012, the gap between the U.S. and West Virginia poverty rates was 1.9 percentage points. Five years later, the gap was 5.7 points.

Our ruling

Fershee said, “Poverty in WV is more than 5% higher than the national average.”

Only a slip-up in her mathematical terminology keeps this from being fully accurate. The poverty rate in West Virginia was 5.7 percentage points higher than the national rate, not more than 5 percent higher.

We rate the statement Mostly True.

This story was originally published by PolitiFact.

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An economy in transition

The Coal Industry is Fighting a Bipartisan Effort to Create Jobs from Abandoned Mine Land



With bipartisan support and a focus on economic development in coal country, the Revitalizing the Economy of Coal Communities by Leveraging Local Activities and Investing More (RECLAIM) Act was supposed to fly through Congress. Instead — mostly due to heavy lobbying by the coal industry — it has been stalled for nearly two years, leaving abandoned mine land in ruin and communities wondering how to move forward with post-coal economies.

So last week, when the bill passed through the U.S. House’s Natural Resources Committee, environmental groups and bill sponsors throughout Appalachia were relieved. The legislation, which would allow $1 billion in available funding to be fast-tracked to the Abandoned Mine Land Reclamation Fund over five years, has an amendment requiring developers to have an economic development plan included in the reclamation proposal.

“Not only would this reclaim land and put out of work miners back to work reclaiming land with the skills they have, the economic development [aspect] would provide sustainable employment, boost to local economies, tax dollars, as well as current and future jobs,” said Sarah Bowling, a Kentuckians for the Commonwealth member from Pike County who has lobbied Congress in support of the RECLAIM Act.

The Surface Mining Control and Reclamation Act of 1977, which grew out of concerns over environmental degradation and pollution from strip mining, established the federal Office of Surface Mining Reclamation and Enforcement and created regulations for regulating surface mines and reclaiming closed or abandoned mines. The Abandoned Mine Land fund uses fees paid by coal companies to reclaim mine land abandoned before 1977, set standards for future closed coal mines and to post bonds if companies don’t reclaim land.

According to the Department of Interior, to date, coal companies have paid $9.2 billion in fees to the AML fund to reclaim land, and it has accrued $1.5 billion in interest which is used to pay for miner’s union healthcare. About $2.5 billion of that fund is left. It will take upwards of $9.6 billion to reclaim the more than 6 million acres of lands and waters, according to 2015 data from the Appalachian Citizens Law Center. But without reauthorization, the AML program will expire in 2021.

In 2015, the Obama administration proposed the POWER+ Plan, a $10 billion initiative to help struggling coal communities diversify their economies. It allocated $90 million for mine reclamation pilot projects in Pennsylvania, West Virginia and Kentucky and set goals for carbon capture and storage, healthcare for retired and out-of-work coal miners and workforce development. In February 2016, a bipartisan group of legislators, led by Kentucky Republican U.S. Representative Hal Rogers, introduced the RECLAIM Act. It was introduced in the Senate in December 2016 by a group of senators led by U.S. Senator Joe Manchin of West Virginia.

The RECLAIM bill from last year’s session had the economic development aspect, but it drew opposition from western states who don’t see a need to focus on economic development as much as Appalachian coal communities do. It also was heavily lobbied by the National Mining Association, an industry group that wants to overhaul federal mine cleanup efforts. Environmental groups like Kentuckians for the Commonwealth said this year’s watered down version was not substantial.

Without the amendment, Bowling said, the bill isn’t as effective. “It doesn’t do as much good to reclaim land and leave it,” she added. “It’s safer for humans and property, it removes hazardous material — and that’s great — but that only provides employment in very short term capacity.”

Representative Don Beyer of Virginia reintroduced that economic development amendment before it was passed by the House Natural Resources Committee. The bill will move onto the House. It’s a step, but “now the real fight begins,” Bowling said.

The National Mining Association is still lobbying hard to get rid of the RECLAIM Act, and the Abandoned Mine Land fund along with it.

In late July, the group sent a letter to lawmakers arguing against it. “We oppose the Reclaim Act because it perpetuates a misuse of funds for purposes that, while worthy, have nothing to do with reclaiming high priority abandoned coal mines – yet all with little accounting,” said Luke Popovich, vice president for external communications for NMA said in an email. “Only a fraction of the almost $11 billion that mining has paid into the AML fund has been [used to] fit the fund’s intended purpose.”

There is some truth to the claim that AML funds have not been used properly: Earlier this year, a Department of Interior Office of Inspector General report revealed that the OSMRE has been giving too much leeway to states in how they use federal money to reclaim those millions of acres, resulting in the misuse of funds.

That’s partially why the economic development amendment in the RECLAIM Act is important, advocates say. Rogers, who is still leading the bill, has said he’s “disheartened” by the NMA’s opposition. “A vote in favor of the RECLAIM Act is a vote to rescue coal country – and it’s the right thing to do,” he said in a statement.

Many powerful lawmakers in the House and Senate support the bill, including Senate Majority Leader Mitch McConnell. In Appalachia, most people support it, too. Last year, the Sierra Club and the West Virginia Center on Budget and Policy surveyed over 1,000 respondents and found that 87 percent of voters in Indiana, Kentucky, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia supported the RECLAIM Act.

However, the Trump administration’s standing is less clear. Trump has repeatedly claimed he will put miners back to work and EPA administrator Scott Pruitt has loosened regulations on coal companies to be more industry-friendly.

In his 2018 budget proposal, Trump proposed eliminating the Appalachian Regional Commission (ARC), providing it with only $27 million to support the “orderly closure” of it. The commission is a primary engine for economic development initiatives and workforce training throughout Appalachia, including programs that involve the AML fund. A recently introduced bill in the House would only cut the agency’s $152 million budget by 14 percent, to $130 million.

Without the extra funds, communities across Appalachia have been trying to spur economic growth using abandoned mine land. In Southwest Virginia, reclaimed mine land was used to start a winery in the early 2000s. In eastern Kentucky, a renewable energy company and a coal company are partnering to build a solar farm on an old strip mine. Developers in Mingo County, West Virginia are working on creating an aquaponics farm to grow vegetables and raise fish on former mine land. And in Pennsylvania, an abandoned coal mine was used to create a commerce and trade park that employs 4,500 people.

Right now, these types of projects are still in the early stages, so the fast-tracked federal funding for economic development could help spur growth, advocates say. “I don’t think [the RECLAIM Act] will solve all the economic problems with Appalachia, but it is a fantastic first step in that direction for that transition,” Bowling said. “It shows Appalachia that yes, the government is doing something to try to help you out.”

Lyndsey Gilpin (@lyndseygilpin) is a contributing editor of 100 Days in Appalachia based in Louisville, Kentucky. She is also the editor of Southerly, a newsletter covering the American South.

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