Structure and process for SOAR initiative announced – it’s a good next step...

Governor Steve Beshear and Representative Hal Rogers announced the structure and process for the Shaping Our Appalachian Region initiative yesterday in Hazard. We’ve been waiting for this announcement since Dec. 9, 2013, when an almost 2,000-person crowd showed up at the SOAR summit in Pikeville to share their ideas and suggestions about eastern Kentucky’s economic future. (Hazard Herald photo by Amelia Holliday) The announcement – covered here by the Lexington Herald-Leader and here by the Hazard Herald – said there will be a permanent SOAR office in Pikeville headed by Pikeville city manager Donovan Blackburn, and a 15-person executive committee comprised mostly of a who’s who among eastern Kentucky academia, politics, banking, law firms and business leaders, will be created. Working groups, chaired by a similar set of folks, will be devoted to 10 different topics, including agriculture, tourism, broadband Internet and education. These working groups will host community listening sessions throughout the year leading up to a second SOAR summit in November. A timeline that dictates each next step for the executive committee and working groups was also released. There are no specific dates – just what will be done in each month for the rest of this year – but it does show that a permanent SOAR executive director will be named in September after a nationwide search (Chuck Fluharty, president and CEO of the Rural Policy Research Institute, will stand in as interim director until then). A change of command from the working groups and executive committee...

Severance Tax Dollars Need Stronger Overall Strategy

This blog is cross-posted at the Kentucky Center for Economic Policy. The House version of the new state budget takes $20 million of coal severance money the governor’s budget had allocated to region-wide programs and local governments and shifts money to over 400 earmarked local projects, many smaller than $10,000. CN2 Pure Politics and the Louisville Courier-Journal have stories exploring potential debate over these changes. It’s become commonplace for the coal severance budget to contain a wide array of projects and programs, but without a clear strategy for how they add up to economic development in the state’s coal-dependent regions. Originally, much of the coal severance money went to prop up the General Fund. In 1992, the state passed legislation intended to send half of the money back to coal-dependent regions, to be divided into two streams: a portion for local government budgets and a portion to be used for economic diversification. However, the economic diversification monies were restricted to one strategy—the construction of industrial parks to try to lure industry. After a series of regional industrial parks were built in eastern Kentucky with little success in finding tenants, the legislature began taking those monies—known as the Local Government Economic Development Fund (LGEDF) —for specific projects in each county earmarked in the budget. The General Assembly also began to issue bonds for water and sewer and other projects to be paid back with future coal severance revenue. After more than a decade of this practice, the dollars that had accumulated in LGEDF accounts are now gone, a...

Worker-Owned Cooperatives for Appalachia

What if the people who are employed by a business are the same people who own it? How would that change the decisions that get made regarding wages, benefits, community participation and the workplace culture? Worker-owned cooperatives are an answer to corporate business models that might not consider the worker impacts of the decisions made at the highest levels. A recent op-ed in the Lexington Herald-Leader promotes this business model as an option for eastern Kentucky. Erik Reece, the author of the op-ed, went to Cleveland to see how the cooperative model is impacting that city’s revitalization efforts: Eventually, however, my research led to Cleveland, where I found an economic model that, I believe, would have saved the West Virginia miners and could go a long way toward reclaiming the foundering economy of Eastern Kentucky. Five years ago, the CEOs of Cleveland Clinic, the Cleveland Foundation and some surrounding universities and hospitals decided they had to do something about the shuttered businesses and derelict neighborhoods that surrounded them. These “anchor institutions”— they weren’t going anywhere and they had resources — realized they spent $3.5 billion on goods and services from outside the city. Why not try to redirect some of that purchasing power to create an economy that would employ men and women from the surrounding neighborhoods? If only 10 percent of that $3.5 billion was redirected locally, it would inject $350 million into an area facing 25 percent unemployment, they reasoned. So the anchor institutions helped create the...

Great crowd and lots to learn at KFTC’s fifth annual Growing Appalachia conference...

This post is cross-posted at the blog of Kentuckians for the Commonwealth. About 190 people attended KFTC’s fifth annual Growing Appalachia conference in Prestonsburg, a record for the one-day event focused on ways people in eastern Kentucky can earn or save money or grow a business through agriculture and clean energy solutions. “What we are seeing across eastern Kentucky is nothing short of revolutionary,” said panelist Ralph Davis who manages the Floyd County Farmer’s market. “People are returning to family farming. They are taking ownership of their lives and doing something new. Farming is an act of creation. And it is one of the ways this region can heal.” Among the crowd were many students and teachers, including 15 middle schoolers from Letcher County, high school students from Floyd County, and college students from the University of Pikeville and Big Sandy Community and Technical College, among others. As a teacher from Letcher County explained, “We are just getting started this year with a garden at our school and have plans to build a greenhouse. We are all learning together and thought this would be a great experience.” The conference featured 9 workshops, from which people could choose 3, plus a panel discussion about local community development efforts in Elkhorn City, Whitesburg, Prestonsburg, and Hazard. Workshop topics included organic pest control, bio-intensive gardening, farm-to-institutional marketing, ways to use wood for energy, collecting and marketing wild edibles and medicinal herbs, do-it-yourself home weatherization, on-farm renewable energy, and two workshops featuring panels of people who are...

Appalachian Agriculture is all about connections

“I am an Eastern Kentucky business owner. I am a baker of corn bread, an heirloom seed saver and a hillbilly farmer. I offer no apologies. I am Appalachia Proud.” So begins an op-ed from Pikeville, Ky., native Joyce Pinson (left) who writes a farm-to-table column for the Appalachian News Express. The op-ed appears in the March 10 issue of the Lexington Herald-Leader. Pinson is advocating for the resurgence of Appalachia’s rich farming history, and we couldn’t agree more with her. “There is an agricultural renaissance going on east of the Winchester Wall,” she writes. “Farmers in Appalachia are one of our best kept secrets; so secret I did not even know others existed until the East Kentucky Food Systems Collaborative began piecing together a network.” In between talking about the types of produce she grows and how eastern Kentucky green beans are the best in the biz (a hint: they really are), she says Kentucky Agriculture Commissioner James Comer’s Appalachia Proud initiative is a good thing for Appalachian farmers. But she also talks about connection. How farming the dirt of Appalachia’s hollers connects us to our past and the ancestors who farmed to live, and how connections across county lines can only serve to make the agriculture economy in the region that much stronger, and how children who connect with growing their own food early are bound to appreciate it so much more as they grow into adults. All of this connection leads to great opportunity. And that’s the beauty...

Economic Freedom Zones are a bad idea for eastern Kentucky

Not too long ago, we wrote about the Kentucky Department of Agriculture’s “Appalachia Proud” agricultural branding and education program. Tucked into that program is a call for eastern Kentucky to become an "Economic Freedom Zone." While the agricultural component is promising, the push for an Economic Freedom Zone is out of place and a bad idea for developing eastern Kentucky’s economy. Economic Freedom Zones are the brainchild of Kentucky Senator Rand Paul and are a radical version of  an earlier concept called “Enterprise Zones.” The basic tenet of Enterprise Zones is to reduce business-related taxes, which are supposed to attract businesses to areas with chronically high unemployment. The Economic Freedom Zone concept goes much, much further, all but eliminating many types of  taxes while also curtailing environmental and prevailing wage regulations. It’s a big idea, and an odd one to include in a package of agricultural education and marketing programs like Appalachia Proud. But it’s also a bad idea for Central Appalachia. First and foremost, tax cuts do not create jobs. Studies of Enterprise Zones have found that they do little to spur economic growth. A study from the United Kingdom found that “Enterprise Zones do very little to promote lasting economic prosperity. Most Enterprise Zones create a short-term boom, followed by a long-term reversal back into depression,” and that “up to 80% of the jobs they create are taken from other places.”  Multiple studies in the United States came to similar conclusions. The Public Policy Institute of California stated that Enterprise Zones...