Leaders see positives, negatives in counties’ removal from federal list
Fayette and Greene counties have done so well to improve economically that a federal organization has decided to move the counties out of its distressed status category. And while the counties stand to lose out on some economic development money, officials view the change in designation from the Appalachian Regional Commission (ARC) as a validation of their efforts to spur growth.
The neighboring counties are the last two in Pennsylvania that ARC has considered distressed. They join 30 other counties along the Appalachian Mountains that will be upgraded to transitional status in the 2004 fiscal year, which begins Oct. 1.
“I believe that’s a positive development. It shows we’re making progress towards economic recovery and we’re moving in the right direction as a county,” Fayette County Commission Chairman Vincent A. Vicites said.
Vicites said the county leaders need to work hard and stay focused on doing what needs to be done to continue making Fayette County “a better place to live.”
“I think any time, whether it is a county or an individual, where you enhance your position in life, it’s a good thing,” Commissioner Sean M. Cavanagh said. “It shows the positive progress that’s been occurring in Fayette County.”
“It’s good news/bad news,” Commissioner Ronald M. Nehls said.
Nehls said the good news is the pending upgrade in the county’s status with ARC, and he commended the “tons and tons and tons” of people responsible for the change, including those involved with the county government, economic development and service organizations.
He said the obvious bad news is the loss of the ARC funding stream, which Mike Krajovic, Fay-Penn Economic Development Council president, estimated brought about $1 million into the county in the past decade.
However, Nehls said he spoke Thursday in Pittsburgh with an ARC representative and learned that the county can now receive different types of funding from the agency, including money for education programs. He said he would like to tap the new funding opportunities for the DARE2XL after-school effort being used in a couple Fayette County school districts.
“The challenge is laid down for us in Fayette County,” Nehls said, noting that this change can mean to those elsewhere that the county pulled itself “up by the bootstraps.”
Vicites and Cavanagh had similar comments about the county’s potential to bring money in from other sources. Vicites said he does not believe the ARC funding will be missed, as long as the county leaders can accomplish their funding goals in a different way, bring private money into the county and continue to grow the tax base.
Cavanagh noted that the county recently applied for two ARC grants totaling about $440,000 to help build an access road in the county’s business park in South Union Township. He said he is optimistic that with the help of U.S. Rep. John Murtha (D-Johnstown), the money will still come through.
“I think getting funding is the ability of the local elected officials to effectively lobby their legislators in Harrisburg and Washington, D.C. This (change from ARC’s distressed status) shows we’re not always in line for a handout. We’re getting a hand up, not a handout,” Cavanagh said. “In this life, you want to improve. That’s what America is about. You can rise up. Fayette County has been down and out for years.”
Created by President Lyndon B. Johnson in 1965, ARC is a joint federal-state panel based in Washington, D.C., that provides federal money for a variety of projects. In 2002, ARC allocated $66 million to the 410 counties that make up the Appalachian communities from New York to Mississippi, while the organization gave about half the funding directly to the 118 counties classified as distressed. Those counties that are not considered as distressed receive their funds competitively at the discretion of the 14 members that sit on the ARC board: the governors of the 13 Appalachian states and one representative of the federal government.
Distressed counties, according to ARC, are those that exceed national poverty and unemployment rates by 150 percent and fall short of the national per capita income by 66 percent or less.
In Fayette County, the estimated unemployment rate projected for 2004 is 6.7 percent, or 157.2 percent of the national average. The national unemployment rate is 4.3 percent. The county’s per capita income is $15,919, or 62 percent of the national $25,676 average.
However, Fayette County’s poverty rate did not meet the required threshold for distressed status. The poverty rate is projected at 18 percent for 2004, or 145.5 percent of the estimated 12.4 percent national average.
ARC first announced this decision last fall, to the surprise of some economic development officials. Tim Marema, programs director for the Center for Rural Strategies in Whitesburg, Ky., questioned 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,” 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.”
On the Fayette County economic development frontlines, Krajovic is disappointed in ARC’s decision and said the agency should review the criteria it uses in making its decisions.
“The ARC program has been very helpful in financing various economic development projects in Fayette County over the past 10 years. This determination will result in reduced funding for us to be able to work on revitalization efforts,” he said. “Our understanding is that Fayette County was eliminated by the drop in its unemployment rate; however, one plant layoff can change that. The distressed criteria should more heavily emphasize long-term distress indications such as poverty rates and per capita income. Fayette County is still ranked as the most distressed in Pennsylvania.”
While acknowledging the progress that local officials have made, Krajovic they still need help from agencies like ARC in order to advance the county’s economy.
“That money has helped to fund infrastructure improvements, road improvements, utility extensions; it helped us set up the small-business-assistance program at Fay-Penn, and it’s been supporting the Route 40 development as well as helping to do work force and education studies,” he said. “It has been a very important funding stream for the county.”
Krajovic explained that distressed-status counties receive a special allocation, but without the distressed designation, Fayette County will have to compete with all the counties in Pennsylvania to which ARC allocates funding.
“This would greatly reduce the possibility of receiving funding,” he said.
Krajovic said Fay-Penn has “no idea where we might be able to make up the shortfall.
“We want to work with our elected officials at the federal level to see if the criteria should be adjusted at the federal level and less emphasis be put on the fluctuating unemployment rate,” he said. “Eventually, people fall out of the unemployment system. Just because our rate is low it does not mean we don’t have people who are not employed or underemployed.”
On the Net:
Appalachian Regional Commission: http://www.arc.gov/
Editor’s note: Herald-Standard Business Editor James Pletcher, as well as the Associated Press, contributed to this story.