NC angles for bigger slice of ARC money (Asheville Citizen Times)

The year after federal lawmakers added two counties in Congressman Lincoln Davis’ sweeping mid-Tennessee district to the Appalachian region, the government spent more than a quarter-million dollars there for a new water tank.

Lawrence County, where Davis and local leaders broke ground in April on the 700,000 tank, and its neighbor, Lewis County, to the north, form an island on the government’s map of Appalachia. They don’t touch any other Appalachian county in Tennessee, but Lawrence does connect to an Appalachian county across the state line in Alabama.

Congress added the Tennessee counties to the decades-old Appalachian Regional Commission in 2008, along with eight other counties in three states. It was the biggest increase to the region’s 13-state service area since just after its creation.

Lawrence County Executive Paul Rosson makes no bones about getting a spot inside the ARC. His county needs the help, he said, though most people there identify with Middle Tennessee instead of the Smokies to the east or even the Alabama foothills to the south.

“We have lobbied 30 years for inclusion because it’s extra funding for capital improvements,” he said.

The commission was created to pull mountain people out of poverty, but it spends millions of dollars each year on parts of the South not commonly considered Appalachia, according to an analysis by the Citizen-Times.

North Carolina, with the highest mountains east of the Rockies, was near the bottom of the list of spending this year. The state received $3.4 million, compared with $5.9 million spent in Mississippi, which has more counties in the region and is
poorer.

State lawmakers, fresh off a successful push to get more ARC money for highway construction in the Western North Carolina mountains, say they will try to change that. The state has received funding for every project on its list during the last five years — a trend one powerful senator says points to more opportunity.

“Any time you get everything you ask for in this business, you didn’t ask for enough,” said Senate Majority Leader Martin Nesbitt, D-Asheville.

Critics said the commission’s expansion shows it hasn’t helped fight poverty.

“The question is, do these kinds of programs work?” said Roy Cordato, vice president of research for the conservative John Locke Foundation in Raleigh. “At best what they can do is transfer economic development to some place from some other place without net expansion of the economy.”

Commission spokesman Louis Segesvary disagrees. He said the agency focuses on development of local assets, like Asheville’s handicraft industry, instead of transferring economic development.

“This strategy means that businesses and the jobs that go with them stay in the locality instead of leaving it,” he said.

The commission meets in Waynesville this week.

Political animal
Nesbitt and others representing WNC this year convinced the General Assembly to change a longstanding state funding formula that mixed ARC highway money with the N.C. Department of Transportation’s general budget.

The old formula meant the $30 million in extra money the state was supposed to be getting for road construction in its 29 Appalachian counties was being spent across North Carolina. Now, the federal money will be spent on top of the state highway money allocated in the mountains.

That could mean progress on roads such as Corridor K, which is slated to go from Asheville to Chattanooga, Tenn. It’s been under construction in some form since the 1960s partly because the state couldn’t afford to finish the most expensive part
through Graham County.

The highway is controversial, with environmentalists opposing it and business leaders saying it will mean more economic opportunity.

One of the key issues the ARC was established to tackle was improving access to isolated communities through the Appalachian Development Highway System.

Highway money was a batch of ARC funding that state lawmakers had some control over because it went directly to the state.

State lawmakers don’t have direct control over ARC’s second focus: economic development. That duty lies with the governors of the 13 ARC states, which make up the full commission.

Nesbitt and Sen. John Snow, D-Murphy, who helped change the highway funding allocation, are exploring whether there’s a chance to get the region more economic development money.

“We found out years ago that we have a problem in our part of the state with people not applying for stuff,” Nesbitt said. “I always made the argument that was because we were used to being told no.”

Getting more of that money might be harder than battling for WNC’s fair share of road funds.

A slice of the pie

Each state is allocated a part of the commission’s economic development budget, which was $76 million this year.

The allocation to a state is made based on a formula that takes into account the amount of land a state has in the region, its population, poverty level and educational level. North Carolina’s slice in 2009 was $4.3 million, which went to 16 projects ranging from sewer infrastructure in Cherokee County to an industrial park in Wilkes County.

Mississippi gets more than North Carolina because it has 12 economically distressed counties. North Carolina has none.

ARC spokesman Louis Segesvary said about 30 percent of ARC’s funding is taken off the top for 82 distressed counties in eight states.

ARC funds are typically the smallest amount in any project. Local districts typically get large matching grants to leverage the government money.

“Without our seed and glue money many of these projects would never get off the ground, as it is what attracts and makes possible additional funding,” Segesvary said. “We are often the place of last resort for communities when they have no other
funding options left.”

He pointed to a grant to Southwestern Community College of $300,000 to undertake a study of local telecommunication needs, which resulted in the construction of a major broadband network serving the area.

“That represents funding, telecommunications development and jobs that remained right there in Appalachian North Carolina,” he said. “None of that was transferred out.”

Governors make project recommendations to the commission staff in Washington. ARC’s federal Co-Chairman Earl Gohl makes the final call on what gets funding.

The formula means more money for states like Kentucky and Alabama, which are poorer than North Carolina and have more counties in the ARC service area.

Olivia Collier, ARC program manager in North Carolina, said the agency looks at what’s best for the entire region in making funding decisions.

She said the only way for North Carolina to get more money would be for Congress to increase the agency’s entire budget.

“It’s very much a partnership,” she said. “It’s our job to come to work everyday and make sure we are working for the citizens of Appalachia.”

The agency since 2005 has spent $37.8 million on the administrative costs of the 73 local development districts in the region, according to the newspaper’s analysis. In North Carolina they are generally called “council of government” agencies, such as the Southwestern Commission.

The districts make sure ARC funds are used effectively, according to the agency, and work to identify local needs. The second highest single funded area was water systems. The money helps local districts with grant writing and project development, said Segesvary.

Congress has been tinkering with the funding formula and the size of the Appalachian region almost since ARC’s inception in 1965 as part of President Lyndon Johnson’s war on poverty. The region in 1965 originally included 360 counties in 11 states. Two years later, the region had grown to nearly 400 counties and included additional states of Mississippi and New York
through laws passed in Congress.

And states have been able to add miles to the Appalachian Development Highway System.

Nesbitt said Alabama added miles in 2004, and he’s interested in adding miles in North Carolina.

“Anything that is granted by Congress is by its very nature a political thing,” he said. “Compromise is part of that process.”

U.S. Rep Heath Shuler, D-Waynesville, said through a spokeswoman that there is a finite amount of money in the ARC budget.

“Any expansion should be well thought-out and thoroughly considered,” he said. “North Carolina needs to continue to work closely with our partners at the ARC and promote worthy projects in the Appalachian region.”

Segesvary said the agency’s framework — with governors and a federal co-chairman running the commission — doesn’t provide an opportunity for Congress to steer spending, aside from occasional earmarks.

Cordato, the research vice president with John Locke Foundation, disagrees. He said there’s plenty of room for influence.

“The fact is this money is being distributed by politicians and you should expect that it be distributed based on politics,” he said.

The shape of the ARC’s service area seems to highlight that concern.

Where is Appalachia?

Macon County, Alabama, is far from any sizable mountain. The county seat of Tuskegee is 340 feet above sea level.

Its people are mostly African-American, compared to the mostly Scots-Irish people who settled the heart of the Appalachia.

But since 1998, Macon County has been part of the region. It came in with Public Law 105-178, along with its neighbor Hale County and two counties each in Georgia and Virginia, and one in Mississippi.

ARC spent $200,000 on dropout prevention there in 2009, where 30 percent of people live below the poverty level.

The boundaries of Appalachia are hard to nail down in any sense.

Scott Philyaw, director of the Mountain Heritage Center at Western Carolina University, said the geographic notion of Appalachia for most people means the mountains of the eastern U.S. and Canada but not urban centers such as Winston-Salem. Yet, many people from the mountains have migrated to these cities for employment.

The government considers Winston-Salem and the northern suburbs of Atlanta part of the Appalachian region.

Economically, Appalachia is noted for extraction industries like mining and timber that gave way to manufacturing.

Plantations and large-scale farming were relatively scarce in Appalachia, because the region didn’t have the vast amounts of flat, fertile land like the rest of the South. Slavery was also less common.

People have been moving in and out of the region since the early 18th century.

In the years before the American Revolution, Scots-Irish and German settlers followed the Great Wagon Road from Philadelphia, down the Shenandoah Valley, to Western North Carolina in search of available and affordable land.

The mountains were similar in some respects to their homelands.

The Civil War devastated the South but was especially hard on Appalachia, where the rough terrain and few roads pushed the region deeper into isolation through the Reconstruction era.

Many people left to find work after the war.

Large-scale timbering, for a time, took over in the Southern Appalachians.

That work gave way to manufacturing in some places, and when those jobs started disappearing after World War II, Appalachian residents again moved.Some left for the auto industry in Detroit and others for work in the growing Southern cities just outside the mountains, like Winston-Salem, Knoxville, Tenn., and Atlanta.

Philyaw said all of this movement in and out of the region makes it hard to pin down a precise boundary for Appalachia. He said that while the federal government’s map appears to be a political creation, it does include some areas relevant to the
migration of the Appalachian people.

“One way to look at it is to say that it is simply a state of mind,” he said.

Shuler, whose district includes the ARC service area, declined to specifically address whether he had concerns that the agency was spending more in Alabama and Mississippi than the mountains of Western North Carolina.

He said the agency was “an active and valuable partner in promoting economic prosperity to its service region.”

The differences in Macon County, Alabama, and Graham County, North Carolina, where unemployment has hovered around 20 percent, don’t bother Nesbitt.

He understands ARC’s mission was to fight poverty, though he’s interested in bringing more of the fight to his state.

“Poverty doesn’t stop at the county line, and it doesn’t stop at the foot of the mountain,” he said.

Database Editor Michael McGlone contributed to this article.
By Jon Ostendorff • August 1, 2010