Inside Information: January–April 1998 Issue

ARC Governors Meet in Washington

New York Governor George E. Pataki, 1998 states' co-chairman, joined Federal Co-Chairman Jesse L. White Jr. in presiding over a meeting of the Appalachian Regional Commission (ARC) on February 22 in Washington, D.C. The governors of nine Appalachian states were in attendance, including newly elected Governor James Gilmore of Virginia.

"ARC is very important to New York State—we have 14 counties in the Region—and it is a tremendous honor to serve as states' co-chairman," Governor Pataki said, calling ARC a "model of efficiency that benefits all of our states."

Added Federal Co-Chairman White, "We do not have a lot of resources to work with, but we work hard to leverage our investment. ARC funds leveraged $147 million in matching state and local funds last year, and $359 million in private investments."

The Commission approved two resolutions, dealing with state planning requirements and the allocation of ARC funds, and heard a report on the status of the 3,025-mile Appalachian Development Highway System, which is slightly less than 79 percent open to traffic or under construction.

The governors also heard a report on ARC's achievements in the Region last year, including the following:

39,000 jobs were created or retained;
26,000 households were served by improved water and sewer service;
37,000 people benefited from health care projects;
74,000 students experienced the benefit of ARC-funded education programs; and
5,000 people participated in leadership development activities.

Other Appalachian governors attending the meeting were Zell Miller of Georgia, Paul Patton of Kentucky, D. Kirk Fordice of Mississippi, James Hunt of North Carolina, Thomas Ridge of Pennsylvania, Don Sundquist of Tennessee, and Cecil Underwood of West Virginia.

President Seeks $357 Million for ARC in FY 1999

President Clinton has asked Congress to provide a total of $357 million for the Appalachian Regional Commission in fiscal year 1999. The total includes $67 million for ARC's nonhighway programs, and $290 million from the federal Highway Trust Fund for the Appalachian Development Highway System.

The 1999 budget, submitted to Congress in February, marks the first time that the president has called for funding ARC's highway program solely from the Highway Trust Fund. "This budget signals the administration's strong and continuing support for ARC's economic development programs, both highway and nonhighway," ARC Federal Co-Chairman Jesse L. White Jr. said.

"Of special significance, the president has reaffirmed the federal government's commitment to finishing the Appalachian highway system by proposing to fund it out of the Highway Trust Fund. This will provide a steady and reliable source of funding," White said.

The president's budget proposes total funding of $2.19 billion for the highway system over a six-year period. The funding level proposed for ARC's nonhighway programs is on par with recent appropriations and will go toward ARC's other economic development efforts, including education, business development and entrepreneurship, water and sewer systems, workforce training, health services, and related activities in the 13-state Appalachian Region.

The president's budget also requests $26 million from Congress to create a Delta Regional Commission based on the ARC federal-state partnership model. The commission would serve as a stimulus to economic development in a seven-state region of the lower Mississippi Delta, encompassing parts of Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri, and Tennessee.

LEGISLATIVE UPDATE

Senate, House Pass Highway Bills

The U.S. Senate and House of Representatives have passed separate transportation bills that include major new funding proposals for the Appalachian Development Highway System. The Senate bill would provide $2.19 billion for Appalachian highways over a six-year period, while the House bill calls for $2.25 billion over the same period. Both bills, like the president's budget proposal, call for funding the Appalachian highway system out of the federal Highway Trust Fund.

ARC Federal Co-Chairman Jesse L. White Jr. called the bills "landmark legislation for the Appalachian Region."

Senate Panel Holds ARC Highway Field Hearing

On March 16, Federal Co-Chairman White traveled to Birmingham, Alabama, for a field hearing of the Subcommittee on Transportation of the U.S. Senate Committee on Appropriations, chaired by Senator Richard Shelby of Alabama.

"There is no single item more crucial to the economic development of Appalachia than completion of the Appalachian Development Highway System," White told the subcommittee.

"In today's global marketplace, a modern system of highways is a critical first step in fostering economic growth and enabling Appalachia to become a net contributor to the national economy," he said.

White said that past economic impact studies of the highway system have shown that completed segments have significantly boosted employment, income, and population growth in the Region while enhancing safety and reducing the costs and difficulty of extending health care, education, and other critical services in Appalachia.

A new study examining the economic benefits of a dozen Appalachian highway corridors that are 75 percent or more complete is under way and should be completed soon, White said.

White, Underwood Testify before Congress

On March 26, Federal Co-Chairman White and West Virginia Governor Cecil Underwood testified before the Subcommittee on Energy and Water Development of the U.S. House Committee on Appropriations, on ARC's fiscal year 1999 budget.

White said the budget proposed by the president will enable substantial progress to be made toward completion of the Appalachian Development Highway System, implement programs that carry out the agency's strategic plan, and continue ARC's special emphasis on fostering entrepreneurship across the Region.

Underwood noted that the number of jobs in Appalachia has increased by 48 percent since ARC was established, while the poverty rate in the Region has been cut in half. But, he warned that ARC's mission is not complete. "All parts of the Region have not benefited equally from this economic growth. In some of our most rural areas, particularly in Central Appalachia, dropout and poverty rates—which go hand in hand—are still too high," Underwood said.

ARC is addressing those problems, he noted, by directing 30 percent of its area development funds to economically distressed counties, and by focusing its investments on five core areas of assistance: education and training, physical infrastructure, leadership and civic development, business development, and health care.

In addition, White said, ARC is tailoring its investment to meet the emerging needs of the Region through a series of regional initiatives to encourage entrepreneurship, telecommunications, internationalization of the Appalachian economy, and leadership and civic development.

New Alternates

Ohio Governor George Voinovich has named as his ARC alternate Randall Hunt, director of the Governor's Office of Appalachia and former program manager for Ohio's ARC program. Hunt's previous position also included responsibilities within the Ohio Department of Development, with its job creation and business incentive programs.

South Carolina Governor David Beasley has chosen Lisa Chapman, director of the State of South Carolina's Washington Office, as his ARC alternate. A Virginia native, Chapman had previously served with former Virginia Governor George Allen's Washington office as a special assistant for intergovernmental relations, focusing on education, environmental, and health care issues.