“It doesn’t take a rocket scientist to know we have to diversify the economy.”...

The latest issue of LEO Weekly, a news magazine out of Louisville, features a cover story on the coal severance tax. “Reclaiming Kentucky,” by Willie Davis, explores the questions so many of us have been asking for some time: what is the best use of the severance tax? What’s next for the coalfields of Eastern Kentucky? The article begins, as so many articles on the subject have done lately, with the now-notorious decision to use $2.5 million of severance funds for the renovation of Rupp Arena, but then goes further: Ultimately, however, this story isn’t just about Rupp Arena. Two-and-a-half-million dollars is pocket change compared to what the renovation will cost. What’s more interesting is the debate that has followed. It shows that no matter how often we address this issue, we are operating on outdated assumptions about coal, about poverty and about the future of rural Kentucky. Right now, there are billions of dollars that the coal companies have paid that could be used to help poor counties and hire laid-off miners. The bulk of that money is simply not being spent. The problem isn’t that some of that money goes to Rupp Arena; it’s that so little of that money goes to where it is supposed to go. …[Carrie Ray] stresses the need for urgency. “With the coal industry in significant decline in the region, severance money is not going to be around forever, so we need to be planning for the future. Well, we needed to be planning...

Music Festival Helps Small Virginia Town Grow

You might not expect to find some of the biggest names in indie and folk rock playing at a dot on the map in Southwest Virginia, but the town of Floyd is bringing them in. Bands like the Lumineers and Edward Sharpe and the Magnetic Zeros typically play to sold-out crowds in much bigger cities around the world, but next month they will be joining dozens of other musicians at FloydFest. Music festivals are growing in popularity, but they're typically found in larger metropolitan areas. Floyd has a population of under 500 people – so what effect does an influx of over 10,000 tourists at once have? According to an article in the Roanoke Times, it's a positive one. The owner of the single hotel in town books rooms a year in advance of the festival, and plans to expand. People traveling hundreds of miles for a festival that costs hundreds of dollars generally have money to spend on other amenities. From the article:   “Some people come in the Monday before to get settled and to go around the town,” Wall said. That means they’re spending money, eating and shopping in the area longer than just the festival’s four days. “FloydFest is good for just about everyone here,” said Jim Newlin, a manager of the store Republic of Floyd . “People sometimes come just to get a little break when they visit here. But the businesses prepare for it.” Floyd is no stranger to music – there are typically mountain music jam sessions...

Helping the Arts Thrive in Appalachia

With its rich cultural and artistic heritage, many Appalachian towns are looking at promoting the arts as an economic driver. Some places – like Abingdon, VA with its Barter Theater – have seen success with this model, but others have struggled. The Lexington Herald-Leader recently profiled the town of Hindman, KY and its “arts and smarts plan” promoted by then-governor Paul Patton: The CDI [Community Development Initiative] built two institutions in Hindman: a Kentucky School of Craft, to train folk artists, and an Appalachian Artisan Center, to exhibit and sell their wares. Patton said he wanted to expand the local economy beyond coal mining’s boom-and-bust cycle. “We hoped to establish a little artistic community much like Berea has. As an economic development tool, we anticipated people coming in for art shows, to attend classes, to shop,” Patton said in a recent interview. Unfortunately, things did not go quite as planned. Politics, insufficient funding, corruption, and the challenge of attracting and keeping quality artisans and teachers have plagued the School of Craft in particular. These challenges underscore the need for long-term, stable investments and solid political leadership, but also the importance of developing an area’s own artisans and teachers. Accrording to the article, the School of Craft essentially had to close when its two teachers – both from outside the region – left because they didn’t “want to live in Hindman anymore.” But in a region as artistically rich as Central Appalachia, why are we relying solely on teachers from outside the region? One...

Where Should Coal Severance Money Go?

Two Eastern Kentucky legislators have pre-filed a bill in Frankfort that would send all coal severance funds back to coal-producing counties. Eastern Kentucky local governments have been seriously struggling to get by as the coal industry declines in the region, so this money would mean a lot. Currently, half of severance revenues go into the state's General Fund, with the other half going back to coal counties in a rather convoluted path through multiple funds with different allocations and stipulations for use. Though plugging holes in county budgets wasn't the intention for the severance tax, it's increasingly been used that way as shortfalls have grown larger. (At the same time, severance revenues from Western Kentucky have increased as the coal industry there is growing.) According to a report from news outlet cn2: Many counties where coal is mined and transported have come to rely on severance funds to pay for its public services like trash pickup and operating water and waste treatment plants and even paying the utility bills for county courthouses. Letcher County Judge Executive Jim Ward told lawmakers that effect of the severance tax decline on his county has been tremendous. “We’re trying to figure out how we’re going to keep services up just to the general public,” Ward said. So it's not surprising that Rep. Leslie Combs, from Pikeville, and Rep. Fitz Steele, from Hazard, would propose such a bill. Shouldn't coal counties get the severance taxes they've earned, especially when they are suffering financially? On...

East KY Entrepreneurs Build Businesses with Training Classes

Starting a business is much more than just a great idea. Business plans, marketing, access to capital, insurance, taxes, budgeting and finances – these things can be daunting for any entrepreneur, but for those in rural areas, entrepreneurial training can be hard to access. Our friends at Making Connections have a great story on how two entrepreneurs from Southeast Kentucky are using training from the Southeast Kentucky Economic Development Corporation (SKED) to build their businesses: What do an eastern Kentucky bee-keeper and a paintball entrepreneur have in common? Well, they’re both small business owners! And on a sunny evening in mid May, just outside of downtown Hindman, these two came together with others to learn more about how to make their ventures a financial success. The evening marked the first of four sessions for a course titled “Entrepreneurial Smarts.” Sponsored by the Southeast Kentucky Economic Development Corporation (SKED), with support from the Appalachian Regional Commission, the class is being held at different locations throughout eastern Kentucky to help people get their business ideas off the ground.  Anyone is eligible and the total fee for the program is $25, which covers all the sessions, class materials and food. For more information visit www.southeastkentucky.com. Listen to the report...

Multimedia documentary project looks at Appalachia 50 years after “War on Poverty”...

It's been 50 years since the "War on Poverty" was declared from an Appalachian front porch – how far have we come? How much farther do we have to go, and where, exactly, is our destination? Journalist Ralph B. Davis asks these questions of many prominent Appalachians in his new documentary "Appalachia 2050."  ‘Appalachia 2050′ is an effort find solutions to the region’s historic economic troubles and related problems. The project will interview leaders in a wide variety of fields to get their opinions on what must be done to lead the region to a successful future by the year 2050, as well as what a successful future might look like (e.g., Does success mean Appalachia should look like the rest of America, or does it mean something different that harnesses the unique culture of the region?). While the modern mythology of Appalachia has prompted many journalists and filmmakers to explore the region’s historic problems with poverty, nearly every popular account of Appalachia has been undertaken by outsiders who focus their attention on the most glaring examples, rather than on the norm. As a result, residents of the region often bristle over what are perceived as slanted and stereotypical depictions of mountain residents as dirt-poor, uneducated, uncouth, potentially violent hillbillies. ‘Appalachia 2050′ will be unique as it will seek to obtain an honest and unflinching appraisal of where the region is economically, where it needs to go, and how it will get there, from those who live, work and...

Coal Severance Controversy

Coal severance has been in the news quite a bit lately, raising questions about how it’s being used and who is benefiting. Earlier this month, it was revealed that Kentucky would be using $2.5 million in coal severance dollars to fund the renovation of the University of Kentucky’s Rupp Arena, despite the fact that Lexington produces no coal nor is it even in Appalachia. A public outcry led one coalfield senator who supported the expenditure to issue an op-ed explaining his decision, stating that a reworking of how the severance tax is allocated means that more money overall is going back to coalfield counties, so the $2.5 million was a “surplus.” (How there can be a “surplus” of funds when so many coalfield counties are just barely scraping by is a good question.) The whole incident spurred some great commentary about who gets coal severance taxes and how they’re spent. “Has Eastern Kentucky had enough yet?” asked an editorial in the Hazard Herald, decrying the “outright theft” of badly-needed funds. The Lexington Herald-Leader called out some other questionable expenditures of severance tax funds – including Little League and football teams, as well as day-to-day county budget expenditures for which severance funds are supposed to be off-limits – and asked a bigger question: “Why is the potential for an economic reboot being squandered? And what would it take to spark reform?” Folks in West Virginia have been exploring the idea of creating a “future fund” for the coal severance tax, which...