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[Senate Hearing 106-960]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 106-960

            OVERSIGHT OF THE APPALACHIAN REGIONAL COMMISSION

=======================================================================

                             FIELD HEARING

                               BEFORE THE

           SUBCOMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                                 OF THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                             AUGUST 8, 2000
                           NELSONVILLE, OHIO

                               __________

  Printed for the use of the Committee on Environment and Public Works

                                 ______

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71-522 ps                   WASHINGTON : 2001
_______________________________________________________________________
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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                       ONE HUNDRED SIXTH CONGRESS

                             second session

                   BOB SMITH, New Hampshire, Chairman

JOHN W. WARNER, Virginia             MAX BAUCUS, Montana
JAMES M. INHOFE, Oklahoma            DANIEL PATRICK MOYNIHAN, New York
CRAIG THOMAS, Wyoming                FRANK R. LAUTENBERG, New Jersey
CHRISTOPHER S. BOND, Missouri        HARRY REID, Nevada
GEORGE V. VOINOVICH, Ohio            BOB GRAHAM, Florida
MICHAEL D. CRAPO, Idaho              JOSEPH I. LIEBERMAN, Connecticut
ROBERT F. BENNETT, Utah              BARBARA BOXER, California
KAY BAILEY HUTCHISON, Texas          RON WYDEN, Oregon
LINCOLN CHAFEE, Rhode Island

                      Dave Conover, Staff Director

                  Tom Sliter, Minority Staff Director

                                 ______

           Subcommittee on Transportation and Infrastructure

                  GEORGE V. VOINOVICH, Ohio, Chairman

JOHN W. WARNER, Virginia             MAX BAUCUS, Montana
CHRISTOPHER S. BOND, Missouri        DANIEL PATRICK MOYNIHAN, New York
JAMES M. INHOFE, Oklahoma            HARRY REID, Nevada
CRAIG THOMAS, Wyoming                BOB GRAHAM, Florida
LINCOLN CHAFEE, Rhode Island         JOSEPH I. LIEBERMAN, Connecticut

                                  (ii)

                            C O N T E N T S

                              ----------                              
                                                                   Page

                             AUGUST 8, 2000
                           OPENING STATEMENT

Voinovich, Hon. George V., U.S. Senator from the State of Ohio...     1

                               WITNESSES

Collins, Eugene, President of the Board, Portsmouth Inner City 
  Development Corporation........................................    29
    Prepared statement...........................................    38
Holley, June, President, Appalachian Center for Economic Networks 
  (ACENET).......................................................    27
Hollister, Hon. Nancy, Representative, Ohio House of 
  Representatives................................................    14
    Prepared statement...........................................    41
Lilly, Leslie, President and Chief Executive Officer, Foundation 
  for Appalachian Ohio...........................................    36
    Prepared statement...........................................    43
Merry, Larry, Executive Director, Zanesville-Muskingum County 
  Port Authority.................................................    25
Neff, Daniel L., Director, Ohio Mid-Eastern Governments 
  Association....................................................    33
    Prepared statement...........................................    51
Padgett, Joy, Director, Governor's Office of Appalachia, on 
  behalf of Hon. Bob Taft, Governor, State of Ohio...............     7
    Prepared statement...........................................    53
Platt, Richard J., Executive Director, Alliance 2000.............    23
    Prepared statement...........................................    55
Proud, Bob, Commissioner, Clermont County, Ohio..................    16
    Prepared statement...........................................    57
White, Jesse L., Jr., Federal Co-Chairman, Appalachian Regional 
  Commission.....................................................     5
    Prepared statement...........................................    70
White, Wayne F., Executive Director, Ohio Appalachian Center for 
  Higher Education, Shawnee State University.....................    31
    Letter, Hidden Valley Ranch..................................    78
    Prepared statement...........................................    75

                          ADDITIONAL MATERIAL

List, Overview of Ohio Distressed Countries......................    84
Reports:
    Status of Corridors in Ohio..................................    92
Social and Economic Status of Appalachia.........................    98
Statements:
    Hocking College..............................................    96
    McCauley, Roger W., Executive Director, Corporation for Ohio 
      Appalachian Development (COAD).............................    79

 
            OVERSIGHT OF THE APPALACHIAN REGIONAL COMMISSION

                              ----------                              

                        TUESDAY, AUGUST 8, 2000

                                       U.S. Senate,
       Subcommittee on Transportation and Infrastructure,  
                 Committee on Environment and Public Works,
                                                 Nelsonville, Ohio.
    The subcommittee met, pursuant to notice, at 9 a.m. at the 
Opera House, Nelsonville, OH. Hon. George V. Voinovich 
(chairman of the subcommittee) presiding.
    Present: Senator Voinovich.

        OPENING STATEMENT OF HON. GEORGE V. VOINOVICH, 
              U.S. SENATOR FROM THE STATE OF OHIO

    Senator Voinovich. Good morning. This hearing will come to 
order. Very nice to be here in Nelsonville in this wonderful 
opera house. I think that people responsible for the 
restoration should be given a big hand for the great job that 
they've done.
    The only drawback here is that I can't see the expressions 
on your faces. In Washington, when we have hearings, we don't 
have this fancy setting as we have here today.
    We're going to conduct this hearing as one that we would 
conduct in Washington. It's referred to as a field hearing of 
the Environment and Public Works Committee of the U.S. Senate. 
One of the real honors that I have is to be the chairman of a 
subcommittee of the Environment and Public Works Committee, and 
that subcommittee is known as the Transportation and 
Infrastructure Subcommittee. That means I have all the roads, 
bridges, the General Service Administration, the Army Corps of 
Engineers. And, lo and behold, the Appalachian Regional 
Commission.
    We are what we refer to as the authorizing committee. We 
can authorize programs. We can authorize the expenditure of 
money. But in Congress, the only way you can really get it is 
you have to go to an Appropriations Committee, and they're the 
ones that come up with the money. So it's a two-step process.
    Many people feel the authorization committee did it and we 
got it. Well, that's part of it. You have to get the 
appropriators to provide the money, as Jesse knows.
    We're very, very fortunate to have the Federal co-chairman 
of the Appalachian Regional Commission with us, Jesse White, 
who I've known for a long time. Jesse, I think the first time I 
met you was when you and my wife Janet were honored at Ohio 
University at the Osteopathic College for your contributions to 
the region and Janet's to families and children.
     I'm really pleased that I have this chairmanship of the 
subcommittee because it allows me to focus on some issues that 
are very important to Ohio and also to this region of the 
United States. You may or may not know this, but the current 
authorization for the Appalachian Regional Commission is set to 
expire next year and my Senate colleagues and I will be working 
to reauthorize ARC during the remainder of this year and in the 
next.
    I think that's something that we ought not to take for 
granted, because I think we all know that--how long was it, 
there was an effort to do away with the Appalachian Regional 
Commission? Some Members of Congress feel that there shouldn't 
be a special program for this part of the country. So what 
we're trying to do is to obtain an overview of the importance 
of the ARC programs to Appalachia and to closely examine the 
progress that's been made with respect to the implementation of 
these programs.
    In addition, we will look to identify the challenges that 
still must be overcome for the region to fully participate in 
the Nation's economy so that no one will be left behind. I 
think one of the great frustrations that I have and so many of 
you have and I certainly had it as Governor, as hard as we 
tried, we just--we never could bring that unemployment rate 
down in this region of the State. It's affected Ohio. If you 
look around this region in the distressed counties, it's the 
same thing in Kentucky and some other places.
     So today we've brought together an impressive array of 
witnesses who are going to testify about the ARC and the ways 
the ARC funds can be used to foster local economic and social 
development. I really appreciate our witnesses coming this 
morning.
    In 1965, Congress established the ARC to bring the 
Appalachian region of our Nation into the mainstream of 
America's economy. The region includes 406 counties. We have 88 
counties in Ohio. Four hundred and six counties in 13 States 
with a population of about 22 million people. It's composed of 
the Governors of the 13 Appalachian States and a Federal 
representative who is appointed by the President of the United 
States. The Federal representative serves as the Federal co-
chair of the Appalachian Regional Commission. The Governors 
elect one of their members to be the other co-chair. All 
decisions really are made by the co-chairs working together.
    As a unique partnership between the Federal Government and 
these 13 States, the ARC runs programs in a wide range of 
activities, including highway construction. I think that's 
something that most of us are well aware of. It's kind of about 
the most single--most important thing I think that we think of. 
Education, training, health care, housing, enterprise 
development, export promotion, telecommunications, and water 
and sewer infrastructure. I might just say, telecommunications 
and water and sewer infrastructure have become more and more 
important.
    All of these activities help achieve the goal of a 
viability and self-sustaining goal in the five goals developed 
by the ARC in its strategic plan. The first thing is developing 
a knowledgeable and skilled population. People are very 
important. A knowledgeable, trained workforce. That's what 
attracts people. That's what keeps people in an area and 
attracts them to come in. Strengthening the region's physical 
infrastructure.
    We were out this morning to Rocky Boots and their 
distribution facility. Without the infrastructure there that 
was participated in by ARC and by the State of Ohio and by the 
local community, they might not have built that facility there. 
They may have gone to some other State. So that was very 
important to have the sewers and water.
    Then building a local and regional capacity. That's an 
economic development capacity that can put a deal together. 
Creating a--for creating a dynamic economic base. And, five, 
fostering a healthy people. That's real, real important. The 
ARC is real proud of the health care improvements that have 
been made in this region over the years.
    ARC's programs fall into two broad categories. The first is 
a 3,025-mile highway corridor to break the region's isolation 
created by the mountainous terrain, linking Appalachian 
communities to national and international markets. I know about 
that as Governor. We could talk highway, highway, highway. Got 
to get the highways in, right, Nancy, so we could get our goods 
in and get them out. Roughly 80 percent of the Appalachian 
Development Highway System is either completed or under 
construction. I think we still have about 41 miles, Joy, don't 
we, left in Ohio that has to be completed?
    The second is an area of development to create a basis for 
sustained local economic growth ranging from, as I mentioned, 
water to sewer infrastructure, worker training, to business 
financing, to community development. These provide communities 
with the critical building blocks for future growth and 
development.
    The sweeping range of options allows Governors and local 
officials to tailor the Federal assistance to their individual 
needs.
    The ARC currently ranks all of the 406 counties in the 
Appalachian region, including the 29 counties in Ohio and they 
have various levels: distressed, transitional, competitive, and 
attainment. I think many of you are familiar with the series of 
articles that were in the Columbus Dispatch, and one of the 
things that bothered me a little bit about the articles is they 
were talking about the ARC as it was, you know, 10 or 12 years 
ago and failed to mention the fact that a lot of the, ``pork'' 
that they complained about is no longer possible because we 
have designated that money to those communities that are 
considered to be distressed. They get most of the help. We'll 
be hearing from some people that are in transitional and 
competitive today.
    That classification determines the extent of help that's 
given by the ARC. I'm not going to get into the details of it, 
but it deals with poverty and it deals with the percentage of 
per capita and so on. The ARC uses the Federal dollars it 
receives to leverage additional State and local funding in 
order to undertake a wide variety of projects to help improve 
the region's economy and its people. I'm really anxious to hear 
more about that today, how the leveraging goes on.
    In rough figures, every ARC dollar Ohio received in 
resulted in $2 in Federal funds. I'd like to see more 
leveraging going on.
    In Ohio, the ARC funds support projects in five categories: 
skills and knowledge, physical infrastructure, community 
capacity, dynamic local economies, and health care. In fiscal 
year 1999, ARC provided approximately $4.2 million to fund 
projects in Ohio. About 38 percent of the funding is spent 
exclusively on projects in Ohio's nine distressed counties. So 
that gives you an idea of where the money's going.
    Moreover, the ARC announced that last year they spent about 
half of its money on programs that included the poorest 
communities. This allows communities throughout Ohio and 
Appalachia to have tailored programs which help them to respond 
to a variety of grass roots needs.
    Since 1965, the ARC has had a dramatic effect on improving 
lives, helping to cut the region's poverty rate in half, 
doubling the percentage of high school graduates, slowing the 
region's outmigration and reducing unemployment rates. 
Although, I think that we still see too many counties, Jesse, 
with very high unemployment rates.
    Despite the successes to date, the ARC has not completed 
its mission in southeastern Ohio and throughout Appalachia. It 
is the type of initiative that the Federal Government should be 
encouraging. When I think about the Federal Government, I think 
we need to prioritize our dollars and get them into the areas 
that need it the most. I believe that government should do for 
a group of people what they're unable to do for themselves. 
There are areas where help is needed, and that's where we 
should on the Federal level be directing our resources. I know 
that there's a vast reserve of potential in Appalachia. It's 
just waiting to be tapped. I wholeheartedly agree with one of 
ARC's guiding principles that the most valuable investment that 
we can make in the region is its people.
    Today's hearing is the first step toward reauthorization of 
ARC. I'm anxious to hear testimony of our witnesses and to hear 
their views as to their experience with ARC. I'm especially 
interested in hearing from the witnesses especially when they 
believe ARC--what they believe ARC should be doing in 
cooperation with other Federal and non-Federal agencies to do 
the most good for the region's people with limited resources.
    You know, it's really important that people like myself get 
out. I can read about the ARC until I'm blue in the face, but 
it really doesn't have the meaning that it should until you get 
out and you hear about the programs and you visit them. That's 
what we're trying to do this next day and a half. I've been 
very involved, for those of you in the Portsmouth area, in 
trying to bring compensation to the civilian victims of the 
coal war, those brothers and sisters of ours that worked in the 
nuclear energy industry, nuclear power industry that were 
exposed to uranium and to plutonium, and so on.
    I read about it a lot in newspapers and other articles. But 
it really didn't hit me until I went down to Piketon and I 
listened to the testimony. It didn't really hit me until they 
came to Washington and I heard the testimony from the 
individuals that were involved. Because of that, that touched 
my heart. We're trying right now to put a program together that 
we're going to try to compensate those people without them 
having to go through the marginal line to get the help that 
they deserve. We owe it to them. But I have to tell you that 
without my getting out and spending time with people and 
listening to them, that I would never have fully appreciated 
what their needs were. So I'm really glad to be here today and 
I'm anxious to hear from our witnesses this morning.
    Our first panel is going to be Dr. White, who I mentioned 
is the Federal co-chair; and then Joy Padgett, who is the 
director of the Governor's Office of Appalachia on behalf of 
Governor Taft. Joy and I have known each other for a long time, 
from the days when she was a member of the Ohio House of 
Representatives. She's been to see me in Washington a couple 
times and she's, well, excited about her job and enjoys it 
very, very much. So we'll start with you, Dr. White, and then 
we'll move on to Joy.
    If you would honor the policy of this committee, we'd like 
you to limit your presentation to 5 minutes. Your written 
testimony will be made a part of the record of these hearings. 
Once we've completed panel one, we'll have some questions and 
then we'll move on to panel two.
    So, Dr. White, we're very happy to have you with us today.

  STATEMENT OF JESSE WHITE, FEDERAL CO-CHAIRMAN, APPALACHIAN 
                      REGIONAL COMMISSION

    Mr. Jesse White. Thank you very much, Mr. Chairman. You 
made my task of holding my comments down much easier. I was 
going to put in the record sort of the history and main 
features of ARC. I think you've done that to about the best 
ability that I've ever heard anyone do it. I'm very pleased to 
be here in Ohio and thank you for calling this hearing.
    You mentioned the difference between authorization and 
appropriations. I think it's important to note that when the 
Congress did reauthorize us year before last it was the first 
time in almost 20 years that the agency had been authorized. 
It's made a huge difference to us, being able to have a little 
longer planning horizon. So for a long time, it was year-to-
year appropriations language, as was EDA. So it makes a 
tremendous difference to us to have that authorization. We 
certainly will work with you on the reauthorization issue when 
it comes back up.
    I'm delighted to be with my colleague, Joy Padgett, my 
partner on the commission, and Nancy Hollister, who I haven't 
seen in a year or two but with whom we worked so closely, and 
our local partners like Bob Proud and our local development 
districts here.
    As you probably know, every Governor has an alternate who 
represents the Governor in his absence. There is an alternate 
Federal co-chairman who I would like to introduce and who 
appeared before your committee, Ella Rusinko. Ella, if you 
would stand? I just swore her in yesterday as the new alternate 
Federal co-chairman of the ARC.
    Senator Voinovich. Congratulations. I'm very happy to have 
you before our committee.
    Ms. Rusinko. Thank you, Mr. Chairman.
    Mr. Jesse White. I couldn't agree more that getting out 
into the region is so important. We had a commission meeting 
several years ago in Somerset, Kentucky. Congressman Hal Rogers 
hosted us and we took some folks even from the commission 
family into some of the tough coal country of eastern Kentucky 
to show them what distressed counties were really like.
    And when we make this allocation every year to distressed 
counties, about four of our States have none. So they step 
aside and actually give up some of their, ``allocations to help 
the distressed counties.'' I'm going to show you a chart about 
that in just a minute. They really came away proud of the 
investments that we do make and the targeting that we do make.
    You pretty much highlighted the three key elements of the 
ARC strategy--what they've always been. One is connectivity. 
Our highway program. We brought this chart, Senator, that shows 
what the interstate system looked like in 1965 on the top. You 
can see gaping holes as the interstates bypassed the mountains. 
Then on the chart below, you see the ADHS, the Appalachian 
Development Highway System, and the way that was designed some 
35 years ago to connect our region basically to the interstate 
grid. That has been a very productive investment. We appreciate 
the Congress continuing to fund that.
    The second one is our area development program where we 
work on those other goals of economic development. There are a 
number of key elements to that. You'll see those reflected in 
the five goals that you mentioned in our strategic plan. They 
deal with everything from human resource development to 
infrastructure development.
    One thing I think that's important to point out, and I 
think you will hear from our local partners today, is that even 
though the ARC money is relatively small compared to other 
Federal agencies, our money is so flexible that it's often the 
glue money that puts a project together. I have heard this 
hundreds of times in my 6 years as Federal co-chairman. 
Traveling the region, it may only be 20 percent of the project, 
but we couldn't have made it go without the ARC piece.
    That brings me to really the way ARC money was designed 
originally. It was meant to be a very flexible extra little 
piece of Federal money that poor communities could use to glue 
a project together. And it still continues to fulfill that 
purpose.
    The final feature, of course, is this partnership structure 
that you mentioned. In some ways, I think that is as important 
as the money, because the ARC engages the State and local 
officials in our process in a way that's unique in Washington. 
Part of that is the fact that the Federal co-chairman only has 
half the votes on the commission. So I have to get the 
agreements of the Governors and they have to get my agreement. 
So it's really a joint policymaking model. We say it's neither 
dictating policy from Washington nor abdicating it to the 
States. We have to sit down once a year to come up with an 
investment plan and agree on things.
    The last 6 years since I've been there, certainly, the ones 
I can speak to, we have tried to revitalize the ARC and 
modernize it by adopting our new strategic plan, by launching 
some regional initiatives. We've had a regional initiative in 
telecommunications, export trade, leadership development. We're 
now in the third year of an initiative on entrepreneurship 
trying to create an entrepreneurial approach to development. I 
think for a long time in rural, small town America we've had an 
idea that long-term development is bringing a plant in. 
Somebody else is creating jobs and we've got to go get them. 
That has a place to play.
    I think what we've ignored is, what is the real 
infrastructure for small business creation and development in 
our community. That's what this initiative is working on. We're 
very excited about it. A lot of good exciting stuff is going on 
here in Ohio in that initiative which we can speak to.
     So we're continuing to try to think creatively at the 
commission level through our strategic plan, through our 
regional initiatives, through targeting our resources to 
distressed counties. We spend about half of our non-highway 
money on about 10 percent of our people that live in these 
distressed counties. I think that's a proud record of targeting 
by anybody's definition.
    Finally, by fulfilling our mission of advocacy in the 
region, one of the mandates in the Appalachian Regional 
Development Act is for us to be an advocate. We have rebuilt 
our relationship with other Federal agencies. We have 
partnerships with the Department of Transportation, HUD, with 
USDA, with many other agencies. One of my jobs is to try to get 
the big guys with the real money invested in the region. I 
think we've come a long way in doing that.
    As you know, for 8 years, we were under this severe assault 
which you mentioned and it was kind of hard for us to be a 
player. But now with the support of President Clinton, with the 
support of the Hill, we are able to rebuild those relationships 
with the other Federal agencies in Washington and we will 
continue to do that.
     So let me thank you for having us and let me say that we 
will be glad to work with you in any way that we can toward a 
good reauthorization of the commission. Thank you.
    Senator Voinovich. Thank you.
    Joy Padgett.

   STATEMENT OF JOY PADGETT, DIRECTOR, GOVERNOR'S OFFICE OF 
APPALACHIA, ON BEHALF OF HON. BOB TAFT, GOVERNOR, STATE OF OHIO

    Ms. Padgett. Thank you. Good morning, Senator. My name is 
Joy Padgett. I'm the director of the Governor's Office of 
Appalachia and I also serve as State alternate for Governor Bob 
Taft.
    I certainly appreciate that you chose Nelsonville to serve 
as the site for this particular hearing, because I think it 
truly symbolizes the struggling communities in Appalachia that 
once were very thriving and bustling centers of transportation 
and mining and manufacturing and industry. I believe that there 
is a resiliency. You mentioned that as we drove in today to 
these communities. What's self-evident about it is that many of 
the local residents are beginning to learn that the solutions 
for meaningful change have to be initiated locally. I believe 
that the ARC is a key partner in making that happen.
    In my testimony, what I would like to do is to focus on a 
little bit of an overview of the Governor's Office of 
Appalachia, the socioeconomic status of this region, and the 
cultural uniqueness of this region. Very quickly, the Ohio 
General Assembly created the Governor's Office of Appalachia in 
1988 and the mission of the GOA is and always has been to 
promote opportunities to achieve an improved quality of life in 
this area. I'm very proud to have two of the former directors 
here who have mentored me throughout this year. They're really 
ready to kick me out of the nest. But Nancy and Dan Neff are in 
the audience. I don't believe I could have made it through this 
first year without them. So I want to thank them particularly.
    The Governor's Office of Appalachia is managing the Federal 
dollars from the ARC and we also now are managing the State 
matching dollars that Governor Taft has put in so that we have 
essentially been able to double our budget and then serve as an 
advocate for setting some of the policy in conjunction with our 
agencies.
     As you well know, having been Governor, that the State of 
Ohio can only be as strong as each of its counties. Realizing 
the validity of that statement, we have begun, as you mentioned 
earlier, leveraging additional dollars with the ARC. So we're 
looking at a holistic approach in Appalachia now, particularly 
with the distressed counties. Each State department has been 
asked to work with the GOA as they re-examine the special needs 
of the distressed counties as well as the at-risk counties 
throughout the Appalachian region. Matching, of course, the 
Federal ARC dollars with State dollars.
    Actually, 60 percent of those State dollars will be 
targeted at either distressed or at-risk counties, which I am 
very concerned about. Those six counties that are teetering 
there with one additional company closing or another additional 
job loss could very quickly jump into the distressed category.
    We have added a community development specialist that 
serves in the Governor's regional offices and they are working 
on communication with the local development districts in order 
to provide more technical assistance for building community 
capacity, encouraging philanthropic investment, which you will 
hear about later with Leslie Lilly speaking, and then 
appointing a rural revitalization task force. We have completed 
our hearings and are now putting a report together for Governor 
Taft to see if there are additional policies that we can look 
at to--as you said, to encourage some of the re-energizing of 
this particular area, and that report is due in September.
    I just cannot stress to you enough the strong relationships 
and partnerships that have evolved into what we call a team 
approach within the Governor's Office of Appalachia. Because we 
do have limited time today, I did provide your office with some 
statements that perhaps you can look at, but it talks--it's a 
snapshot of the statuses of our distressed counties. Those we 
can look at again later and you can refer to.
    But over the weekend, I had read a story and I just decided 
I needed to tell it, and it was about a wealthy father who 
arranged for his son to take a trip to southeastern Ohio 
because he had the firm purpose of showing his son how poor 
people can be. So that boy spent a day and a night on the farm 
of a very, very poor Appalachian family. When he returned back 
to the city, the father said to him, ``Well, son, how was that 
trip?'' He said, ``It wasn't very good, Dad.'' He said, ``Good. 
Did you see how poor people can be?'' The son said, ``Yes.''
    He said, ``Well, what will you learn?'' He said, ``Well, I 
saw that we have a dog at home and they've got four. We have a 
pool that's in our back yard, and they have a creek that 
doesn't even have an end, dad. We have these imported lamps in 
the garden and they've got all these millions of stars. You 
know our patio reaches the front yard and they've got the whole 
horizon.'' When the little boy finished speaking, his father 
was speechless. His son said, ``Gosh, Dad, thanks for showing 
me how poor we are.''
    This very theory of Appalachian poor people was obviously 
shattered by that boy's story. As director of the Governor's 
Office of Appalachia, my personal No. 1 goal is to shatter the 
misguided perception that Appalachia as a region cannot thrive 
economically. I think if you take a step back in the cultural 
history, you'll see that the migration through the Cumberland 
Gap and what happened is that people actually did not settle in 
towns, but they settled on mountain tops and near streams. 
There was not an early-on, structured religion tradition. They 
had religion, but not a structure because they didn't build 
churches in communities and they didn't have the organized 
school systems that create knowledge of institutions.
    I believe that we still see some of that lack of 
generational knowledge of institution. It still influences 
today, because there was a time when coal companies and other 
extractive economies structured everything that happened in a 
community. Whether it was religion or health care or 
educational activities or political. Now we're beginning to see 
the citizens, as I said earlier, come to realize decisionmaking 
requires their own direct participation.
    I can't believe 5 minutes have gone by, so I'm going to 
sneak one more. ARC is about hands-on facilitation. Many 
communities have difficulty with that 20 percent match often. 
We're working very, very creatively with saying where there is 
a will, there is a way. The ARC is providing that financial gap 
that allows us to leverage all those other sources.
    Senator these people really, really do understand your 
slogan of doing more with less. If anybody ever does understand 
it, they understand it here. Yet these are citizens who work 
hard. They play fair and have missed the rewards of that 
vibrant economy. Maybe it is because we're extractive.
    I would just close by saying that I do have a major 
complaint about the ARC and the LDDs, and I think I need to 
make that complaint public. That is that they refuse to claim 
their bragging rights. They absolutely do. The good stories 
haven't been told nearly enough about the positive differences 
that have happened in so many places. So I know you're a 
baseball fan. I thought I would reach back to Yogi Berra who 
said, ``If you did it, it ain't bragging.''
    The ARC has done a great amount of good for a great amount 
of people over a great amount of time. I think it is just--no, 
I know, I don't think, I know it is important that the unique 
relationships and the partnerships that have been created be 
allowed to continue. I thank you for your time and the 
opportunity to tell the story.
    Senator Voinovich. Thank you, Joy. I'm sure that during 
this next day and a half that you're going to establish your 
bragging rights about the ARC.
    I want to introduce Ellen Stein. Ellen is the staff 
director of my Subcommittee on the Transportation, 
Infrastructure and the Public Works Committee. A little story 
about Ellen. The former chairman of this committee was John 
Warner. You can get a little appreciation of how good I feel to 
be chairman of this committee. John's been in the Senate 24 
years. He moved from the chairmanship of this subcommittee over 
to being chairman of the Armed Services Committee. So he gave 
it up.
    When I came in, I was trying to find someone who could 
carry on the work with the committee. I think he wanted Ellen 
to go with him, and we talked about it. I was so pleased when 
she decided that she'd stay and be our staff director. She does 
a terrific job. She has a very, very big job. She has a lot of 
responsibilities and she gets very little help in the 
committee. I just want you to know how much I appreciate your 
being here today with us, Ellen.
    Ms. Stein. Thank you.
    Senator Voinovich. I'd like to just ask a couple of 
questions. I'm going to try to keep my questions real short 
because I want to make sure the panels have an opportunity to 
be heard. I'd like both of you to comment on something.
    I'm starting to see that maybe more of this is going on 
than I suspected. I'm a great believer in together we can do it 
and symbiosis. Bob knows coalitions, Children and Family First 
initiatives, bringing people together and so forth. There seem 
to be a lot of resources here.
    I would like you to comment on your observations about 
whether or not we are galvanizing all of the resources as 
effectively as we can here in this region. I'd be interested in 
your comments on how you think that--if we are doing it, how we 
can do a better job of doing it. That's one.
    The other is that a lot of these counties in the region 
just don't have the capacity to get things done. It's great now 
that we're going to have an Appalachian foundation that's 
created and have the private sector involved so they can put 
some money into things. It's called the yeast that raises the 
dough. You know, a little here and a little there.
    Do we need to develop some expertise in the region that 
could kind of move from one area to another, deal makers, 
others that can provide that? You know, combine the resources 
so that you can have available to these counties the expertise 
that counties in other parts of the State of Ohio have because 
they're able to afford to hire these people? So those two 
questions, I'd be interested in your comment on.
    Jesse, why don't you start?
    Mr. Jesse White. Well, I think that's very important. I 
think that Ohio--when I look at all 13 States--Ohio is blessed 
in having an institutional skeleton in Appalachia, OH and a lot 
of resources through which I think technical assistance could 
be cost-effectively brought. I do think there's a need for more 
of it. You've got the three very good local development 
districts here. You've got the university with branch campuses. 
You've got other colleges.
    There is an institutional backbone here through which I 
think more effective technical assistance could be given to 
communities, because you're right, a lot of communities don't 
even have the technical expertise to get in the game. They 
really do need technical assistance, whether it's grant 
writing, understanding the Federal system. I think that more 
technical assistance would be a cost-
effective way to help these communities bootstrap themselves.
    Senator Voinovich. I just--I think about the Federal 
programs and we've got CDBG--and we now have the money to TANF, 
the money from Human Services. We have money that comes from 
the employment--unemployment training money. Do you think that 
the Federal pots of money are analyzed thoroughly enough to see 
how they can be melded together?
    I remember way back when I was Lieutenant Governor of Ohio 
and Nancy and I served on the intergovernment commission, and 
we talked about something called a negotiated investment 
strategy that came out of Kettering Institute over in Dayton, 
Jim Kundey headed it up. It was very, very interesting and the 
whole concept was just to try to get the Federal agencies that 
were there that could impact to be at the table and talking to 
each other, and then get the local agencies at the table, and 
then get the State agencies to see if somehow they could pool 
their resources to make things happen. Is anything like that 
happening anywhere in Ohio or around the country?
    Mr. Jesse White. I'll let Joy speak to Ohio.
    Ms. Padgett. I'll speak to Ohio. I think we have set out a 
structure that is more than going to happen. We actually have 
very good examples. Pooling immediately the Governor's regional 
reps to work with the local development districts I think have 
made a real major difference in Ohio because we can look at 
these things a little more holistically which in my personal 
opinion is the way we need to look at this entire region. 
Certainly working very closely with Jackie Wonozynski with the 
old TANF funds and to do economic development and job training 
in those kinds of areas.
    I agree with you, and I have--ever since I taught school 
and used to coach, used T-E-A-M, Together Everyone Accomplishes 
More. I do believe that you need to bring all these folks to 
the table. We are able to leverage additional dollars, for 
example, from those PRC funds with ARC funds, with some local 
funds, in order to do some of the job training and the skill 
building that is necessary.
    I wanted to touch back on what Dr. White mentioned because 
if there's any one thing that I can point out immediately, that 
was a result of those four field hearings that we did, was the 
need for technological infrastructure. You experienced a little 
bit of that down time yourself this morning when you attempted 
to use your cell phone and there's just a time there that you 
just could not use it. Basically when that happens, you are not 
connected.
    So if I were to leave you with any one single thing where 
we certainly do need a tremendous amount of assistance, not 
just with dollars, but I believe that it's not just about 
money, but it's about changing policies also; that a tremendous 
amount of good could be done in this region. The technical 
assistance is great, but if you can only do it in little spots 
where--well, we can use technology here, but if you go 20 miles 
down the road, you can't use it; you go 20 more miles and then 
maybe you can use it.
    You can teach everybody all the skills they can possibly 
have, but if they don't have the infrastructure in place to be 
able to use those skills, companies will locate somewhere else. 
The ability to compete is crucial for us to share in these 
technology-based industries that are now out there. Being wired 
is what it's all about.
    Also, I wanted to quickly mention venture capital is 
another area. We have developed the Appalachian Development 
Fund through a lot of hard work with people in the area. That 
is, again, financial resources for people who want to start 
businesses, is at a minimum very, very difficult to obtain. If 
there's any other one thing that we need to do, it is to 
develop pots of venture capital money and other kinds of money 
to be able to help people do those home-grown businesses that 
we were talking about.
    Senator Voinovich. Thank you.
    Mr. Jesse White. Can I mention something?
    Senator Voinovich. Yes.
    Mr. Jesse White. Just in terms of what maybe some other 
States are doing, I know Governor Patten in Kentucky has 
created a Kentucky Appalachian Commission in essence which does 
try at the State level to coordinate the expenditure of funds 
in eastern Kentucky. They meet two or three times a year. He 
makes all of his cabinet members sit for the whole day, even if 
it's Hazzard or someplace that's hard to get to. I heard some 
grumbling from some of them one day; but he does focus on 
making the State level, which includes flow through some 
Federal funds, coordinate in eastern Kentucky.
    One thing I've certainly noticed at the Federal level is 
that Federal agencies left to their own devices in writing 
regulations to implement legislation will overlook rural and 
small town America if you're not careful. One of the things 
we're constantly fighting is trying to be a voice with the big 
Federal agencies, not to forget Appalachia. Write the regs so 
that our people will have a chance at this money. We got a 
million dollars from H.U.D. for technical assistance in 
distressed counties and for housing in Appalachia. So we are 
making some progress in trying to marshal and coordinate 
Federal resources into the region. It's a constant challenge.
    Senator Voinovich. That's an interesting thing. I was 
writing it down, that the results act on a Federal level; each 
agency has to come up with the results act. We're starting to 
get into those and read them. One of the things that's lacking, 
frankly, is where they touch other agencies to deal with 
problems is not as well coordinated. We're having the Health 
and Human Services rewrite. In fact, they're going to have a 
separate document on Health and Human Services and the 
Department of Education where they deal with children in early 
childhood.
    They've got programs that are very close together. They 
have Head Start and Education has their pre-school. They just 
really haven't sat down to see how they touch each other. Maybe 
what we ought to do is look at when they are coming up with 
their plans for their agencies to look at how they envision 
that they would direct those dollars to, say, the Appalachian 
region. Make that part of one of their little challenges.
    How do we figure out on the national level? The best way to 
do it is to get it on the local level and have you guys sit 
down and figure it out. It would be nice if that study were 
done. Then maybe we could get it in Washington and have them 
direct their attention toward doing a better job with the 
money.
    Ms. Padgett. Senator, although, you know, we're pleased 
that H.U.D. is working with us, when I brought that news back 
to Ohio, they started asking about the rules and the 
regulations that went along with being able to access these 
dollars. I believe that that's part of that issue. It's not 
just about money. The money is fine, but if the policy is set 
that it doesn't fit into our area--and I didn't know this, but 
in talking with some of the experts that work with H.U.D., they 
said, ``Was that in H.U.D.--speak or was that in English?'' I 
guess there's a different language over there that I was not 
aware of. Again, it's a matter of policy.
    Another area that could truly make such a significance in 
all rural areas, not just Appalachia, is the Department of 
Health. Because health initiatives need to be different. They 
need to be written so that they fit into rural Ohio as opposed 
to the urban centers that they so often focus on.
    Senator Voinovich. OK. Jesse, the only last thing I'd say 
to you is if you've got any suggestions in putting together the 
reauthorization on changes in legislation, I'd sure be 
interested.
    My next two witnesses, the Honorable Nancy Hollister. Most 
of you know Nancy. A little inside story that I haven't told 
too often is that I asked Nancy--I got to know Nancy through 
the State and local government commissions when we were both 
Mayors. She was the Mayor of Marietta and I was the Mayor of 
Cleveland. I asked her to go out and find somebody that would 
go out and head up the Appalachian National Commission. Sounds 
to me like Dick Cheney. I said, Nancy, you know something? 
You're the best person that could do this job.
    So she gave up her job, popular Mayor, Mayor of Marietta, 
came to work for the State of Ohio to head up the Appalachian 
Regional Commission. For that, I was very grateful. It's such a 
good job, I asked her to be my Lieutenant Governor when I ran 
the second time. We're happy to have Nancy as the State 
representative. So you have lots of perspectives and probably 
know this area as well as anybody.
    And then Bob Proud, we've worked together for a long time. 
Bob's a leader among commissioners in the State of Ohio. I 
think we did most of our work with kids; didn't we? Children 
and Family First initiative and our local consortiums. You've 
got to know that on the Federal level, I haven't given up on 
kids. We're trying to get Federal dollars to go into States 
where they have formed statewide collaboratives to deal with 
the problems of families and children. Then if the States have 
a coordinated effort, then money can flow into the counties if 
the counties have in place collaboratives. Basically, kind of 
using a Federal dollar to encourage local agencies to work 
together to pool their resources to make a difference in the 
lives of our families and our kids.
    We really appreciate all the work that you've done, Bob. 
You come from a county where part of it is just booming and 
then you have another part that's distressed. We're interested 
in having your perspective also. So we'll start off with Nancy.

 STATEMENT OF HON. NANCY HOLLISTER, REPRESENTATIVE, OHIO HOUSE 
                       OF REPRESENTATIVES

    Ms. Hollister. Good morning, Senator. I appreciate the 
introduction and the story. As you stated, I am the State 
representative for the 96th district which includes Morgan 
County and parts of Athens, Muskingum, and Washington Counties. 
Two of those counties, Morgan and Athens, are listed in the 
distressed category. I know that everyone here, not only those 
who are going to testify this morning, but those who came to 
listen and participate, are delighted that you've taken the 
time to come to the region to listen to some of our successes 
as well as our challenges and our concerns.
    As a former Mayor of Marietta and a director of the 
Governor's Office of Appalachia and Lieutenant Governor in this 
great State, for over 20 years, it has been my pleasure and my 
frustration to participate in the ARC process. It's been a 
pleasure because ARC truly works from the grass roots up, from 
the bottom up, not from the top down. Because local projects 
with regional input, local input, and State government support 
are what make ARC so successful in the State and in the Nation.
    My frustration with the process has been the constant 
battle of explaining the benefits and the necessity of ARC to 
Members of Congress. Why? Well, this is sort of a personal 
point of view, because in watching and being involved for a 
long, long time, when the ARC was initiated and created, along 
with the War on Poverty in this country in 1965, statements 
were made that the ARC would eradicate poverty, would eliminate 
poverty. These statements, while very, very noble, in my 
opinion, were not realistic.
    Those comments were held as a report card some 25 and 30 
years later with which, in my opinion, were used to criticize 
ARC. Because to me, the geography, the culture, the changing--
constant changing economic conditions will never truly allow 
for the elimination of poverty. I think Director Padgett's 
story was very well put, because sometimes poverty depends on 
your definition of such.
    Because in my experience, the true nature of partnership 
between the ARC and the Federal and the State and the local 
level is one of opportunity. It's the opportunity to make a 
difference in the quality of citizens' lives.
    Having been in this business for so long, we talk about 
results and we talk about economic development. That's a key 
word. When there is an interesting analysis that if you have 
economic development, you have results. We count heads. How 
many jobs did you create on this given day? How many companies 
did you bring in? I think we've been trained to do that. I 
think that's erroneous.
    I think that Dr. White was right on point in his comments 
because, to me, economic development is community development. 
If your communities are not sustainable from an education 
level, from a health care level, from a communications 
standpoint, your housing, the quality of your housing is not up 
to par. If your infrastructure is not in place, if you do not 
have community development, you will not have the overall 
economic development.
     So I think we need to change our definition and our 
perspective of exactly what it is. Because it isn't about 
counting heads. It's about a quality of life, a sustainable 
economy in a region of the State that was part of the beginning 
of the State of Ohio, beginning of the movement westward in 
this country.
     But I can tell you that ARC is an organization that adapts 
to the political, economic, and social changes that occur 
throughout the region across the Nation. My job, that I have 
been assigned to this morning, is to talk to you about 
distressed counties and how some of these things evolved, 
because ARC is at a crossroads in their history. There are many 
crossroads in ARC, and this is definitely going to be one of 
them, about where they are focusing their efforts. Through our 
previous administration as well as to the current 
administration, we have definitely been involved in the 
discussion of allocation of funds to distressed counties.
    In 1965, when ARC was created, moneys went to growth 
centers, designated growth centers, throughout Ohio as well as 
the other 12 States involved in the Appalachian Regional 
Commission and because the feeling was get in there, punch it, 
make a difference and to generate development to show results, 
if you will, as quickly as possible. But in 1981, the growth 
center model came into a great deal of question and debate as 
ARC faced possible elimination. The commission then identified 
and sought to focus on counties that had not shared in the 
benefits of the ARC's initial investments.
    ARC then proposed to Congress that we establish the 
distressed counties program and specifically cited the needs of 
clean water and adequate sewers as top priorities.
    So the distressed counties program was born and it was 
implemented in fiscal year 1983. There was a set-aside of 20 
percent of project funds through ARC that must be allocated to 
distressed counties. But in the 1990's, one of my biggest 
frustrations as a former director was that we were dealing with 
10-year-old figures. Distressed counties were identified based 
on old information and not changed for 10 years. So many times 
it was not appropriate at all. In the 1990's, we changed the 
way distressed counties were designated.
    There was an adaptability and flexibility that allowed us 
to really look and work with these counties to see exactly 
where they were and not have everybody in lockstep for 10 
years. It was much, much more flexible and I think much more 
responsive.
    Then in 1994-95, when ARC's support strengthened again--
what they called a worst first strategy was the approach then--
to again, become more focused and more specific. The set-aside 
was increased to 30 percent. There was a development of a four-
tier system of categorizing counties, including distressed and 
transitional, competitive, and attainment. Those are things 
that have already been touched on. There was a restriction 
virtually eliminating anyone for attainment counties, and a 
great deal of restriction for competitive counties. I had two 
of my counties that would be classified as competitive. That in 
and of itself has generated some interesting debate and 
discussion. Yes.
    So this is sort of a history of distressed counties because 
I think we are at a crossroads as to where we go from here as 
far as a focus of funding. Do we put it in distressed counties? 
How do you put it there in allowing these local projects as 
you've mentioned in the discussion with Dr. White and Director 
Padgett about how you spend this money and what kind of 
resources are available? I think these are ongoing discussions.
    I've been asked to cover also a number of goal areas, but 
I'm not going to do that, because it's for the record. There 
are some projects that I know I helped bring to fruition under 
those goals. We can discuss those individually. But you're 
going to have some really good witnesses coming before you in 
the time remaining. So I will allow my testimony to stand for 
the record and end my comments. Thank you.
    Senator Voinovich. Thank you, Nancy.
    Bob, I failed to mention, is also chairman of the Ohio 
Valley Regional Development Commission and interested in, I'm 
sure, your perspective on how ARC is dealing with that. Again, 
coming from a county that's not distressed in one part and 
distressed in another, I'd be interested in your perspective. 
Glad to have you here with us, Bob.

             STATEMENT OF BOB PROUD, COMMISSIONER, 
                        CLERMONT COUNTY

    Mr. Proud. Thank you, Senator. As usual, it's good to see 
you, too.
    Speaking to that, I have to tell a story, too, on Nancy, in 
that Nancy when she first became director of GOA said she 
didn't believe Clermont County was Appalachia. I said, come on 
down. We had a motorhome full of people. We just took her and 
told her to buckle up; here we go. We had the developed site. I 
remember Nancy shaking her head saying she had never seen 
anything like this, these two counties.
    Again, my name is Bob Proud. I'm Clermont County 
commissioner. I appreciate the opportunity to address you, 
Senator, and provide testimony to the rest of the subcommittee. 
ADRC is one of the three local development districts 
representing southern Ohio which includes 11 ARC eligible and 
one EDA eligible member county with a total population of 
646,000. That's a 1999 committee estimate. Our district also 
includes 6 out of the 10 distressed counties in Ohio. They are 
Adams, Gallia, Jackson, Pike, Scioto, and 
Vinton. Their combined population in 1999 estimate is 216,311. 
In 1995, median annual household income for the whole region 
was $27,972. For some of our distressed counties, this figure 
is as low as $23,000. A 1995 median household income from Ohio 
was $35,202. As a local development district, ADRC plays a 
crucial role in developing projects in the region.
    What you've heard from the testimony earlier this morning, 
is that it is a bottom-up process. As a former county 
commissioner, I know you appreciate the fact too that we always 
had mandates. I know unfunded mandates is a war cry and one 
that we picked up in Clermont County and ADRC as well. To have 
a Federal program that is starting at the bottom, priorities 
are set by our county caucuses which is made up of local-
elected officials. It's made up of economic development people, 
non-profit agencies, and we are the ones that develop what our 
priorities are going to be.
    Then we take those priorities and then we take them to 
what--we have a project review committee within ADRC. Each of 
the LDDs have one, too, in which they then rank the projects 
from our 11 ARC eligible counties. Then that ranking then is 
ratified or adjusted somewhat by the executive committee of the 
ARDC. Then what we do is then that is sent up to GOA, working 
again with all of the three LDDs in Ohio and also the regional 
economic development reps, which we're glad that you instituted 
when you were Governor. We're glad that Governor Taft has just 
carried on that tradition as well in working with Director 
Padgett, and they come up with the Ohio package to ARC.
     So, again, it's driven from the local level. I don't know 
that many Federal programs that are driven from the local 
level. So as a local-elected official, I appreciate that so 
much as well.
    But I want to talk a little bit about distressed counties 
since we have six out of these in Ohio in our district. ARC's 
programs granted investments in our district has done so much 
to improve the quality of life of our residents, bringing safe 
drinking water which is one of Joy Padgett's pet projects, too, 
eliminating groundwater pollution.
    ARC investments in Pike County have enabled over 50 miles 
of water lines to be sent to local residents who had no access 
to safe drinking water. The story is the same as in Adams and 
Vinton County to receive water who didn't have it previously. 
ARC grant funds to wastewater treatment systems that can have 
serious groundwater impact as well.
    But summarizing overall figures for our distressed counties 
in our region, in the last 4 years, 1996-99. During that 
period, ARC grants to ADRC distressed counties amounted to 
$5,476,992 for water and sewer infrastructure improvements. The 
key thing is that those moneys leveraged over $27,692 for these 
projects. Again, we talked about the leveraging as well.
    There's a lot of other stories that earn the testimony of 
projects we have, but one thing I really want to talk about is 
our economic development problem. The ADRC region is going to 
be further exacerbated by the recent announcement by USEF that 
they will close the Piketon Uranium Enrichment Plant in June 
2001. I appreciate your efforts in trying to get them to 
reconsider and go back to the original commitment of what they 
said. But, again, that's going to terminate about 1,500 highly-
skilled jobs.
    We talked about transitional counties and competitive. Of 
course, coming from one competitive county, Clermont, to 
recognizing that we are more than willing to only have 30 
percent funding, because that's fair. We would like to see more 
of the moneys going to distressed counties.
    Again, you know, when I used to work for a senior service 
organization, our goal and our theme was helping people help 
themselves. That's exactly what ARC does. They give us the 
tools. They help us help ourselves. So as Churchill said, give 
us the tools and we'll finish the job. That's exactly what we 
want as well.
    We have one of the things in Clermont County that we 
received moneys from 1996 from ARC for our Career Center, our 
video conferencing center and video lab. We have done some 
wonderful things with that, too. We had an interactive video 
conference with Jess and Congressman Portman when they were in 
Washington and we had some students from vocational schools 
throughout the region testifying to them on the effectiveness 
of ARC funds while they were in Bethel, OH, in Clermont County. 
ADRC has used that with video conferencing with three other LDD 
sites with Northern Ireland. We have U.S. Precision Lens, one 
of our major employers in the county, who they interviewed 
prospective employees worldwide. So that saves them as well.
    But, again, as Nancy has said, my testimony is going to be 
part of the record, too, but I just want to thank you for 
coming out here and actually seeing. Because one thing as you 
know as a local elected official, too, is that many times we 
have to get out of the beltway and actually to come out of the 
ivy tower--to come out of that and see what actually is going 
on.
    Again, you can get reports. You can read newspaper articles 
and everything. Until you actually get out here and see and 
talk to the people who are on the front lines, how ARC is 
effective. One suggestion I would have--I'm not going to make a 
criticism--suggestion on access roads funds is that when you 
get access roads funds, you have to adhere to the Federal 
highway standards. If you are building an industrial access 
road in Appalachia, you don't need 6-foot shoulders. That's one 
thing that--one reason a lot of counties do not access, take 
advantage of access road funds, because of the fact that they 
can't afford them because it escalates the cost of the project 
so much.
    In closing, we are having--this is a commercial. September 
17th, 18th, and 19th, we are having in Clermont County--hosting 
ARC entrepreneurial conference at our hall in Eastgate. We've 
had some heavy hitters coming for that. It's going to be an 
excellent conference. I'm going to personally give you a 
brochure and ask you to feel free to stop in and see us on that 
one, because it's going to be excellent, too. Again, that is 
something that is a wave of the future and something that we 
support wholeheartedly.
    On behalf of the ADRC, I want to thank you Senator for 
coming out. It's always a pleasure.
    Senator Voinovich. Good to see you, Bob. Thank you very 
much.
    Mr. Jesse White. Can I make one comment?
    Senator Voinovich. You certainly can.
     Mr. Jesse White. Just to talk about this, this map shows 
side by side the distressed counties by current definition as 
they existed in 1960 and then the current.
     Senator Voinovich. Can everybody see that? It shows the 
distressed.
     Mr. Jesse White. The red is distressed. So it shows the 
progress we've made and what we still have to do.
     Senator Voinovich. Just thinking, in the reorganization 
language, are the categories--the distressed categories written 
in the language or is that something that you folks did in the 
ARC itself?
    Mr. Jesse White. Well, the commission had adopted those 
policies, but the Congress actually wrote them into our 
statute. So they are statutory.
     Senator Voinovich. So that some of the limitations on what 
you can do with money, you're going to be reviewing that and 
getting back to me on any changes that you think----
    Mr. Jesse White. Right.
     Senator Voinovich. I'd really like to know what the 
commission thinks about, and then I think it would be good from 
my perspective, Joy, if you would get your team here and get 
them in the room and look over the language to see if there are 
some changes that we could make, maybe get more flexibility. 
We'll be having some hearings on that in Washington. I think 
you could get started on that right now and get a better feel 
for it.
     Ms. Padgett. The category that does not appear in the 
language is the at-risk category which I use. It falls between 
distressed and transitional. But I do believe it's a very 
critical other category that we need to look at to know that 
many of these categories are bumping down toward distressed 
rather than moving up toward transitional.
     Senator Voinovich. It's the emergency money that you need. 
Sometimes we can provide it. I know that when we were asked 
here for $75,000 for one of our areas where we got some real 
problems--that might have some pop there that you could direct 
and be a way of moving in quickly where help is needed. I know 
that we need to deal with some of the lost jobs we have, for 
example, at the Meigs mine situation. Too often, I don't think 
we can respond quick enough to some of the real at-risk 
situations that we have.
     I notice that you've used some of the ARC money on water. 
Is that for sewer, waste treatment, and also on water supply?
    Mr. Proud. Yes, sir.
    Senator Voinovich. Are these mandates that are coming out 
of the EPA and the local community doesn't have the resources 
to deal with them and, therefore, you're having to access the 
ARC money?
    Mr. Proud. Not every one of them, but a great majority of 
them are as a result of EPA funds.
     Senator Voinovich. So it's not an issue of putting in the 
waste treatment or the water system for economic development, 
but more in response to something that you've got to do under a 
Federal mandate?
    Mr. Proud. It covers, again, both categories. A lot of the 
areas have wells and then your groundwater might have 
contamination into it, too. So they had to have a more safe 
drinking water source, too. But, again, some of it also is 
because of the economic development and a plant or company is 
going to need to have water and wastewater, too.
     Senator Voinovich. I'd be interested in how that's broken 
down. One of the things that I'm starting to pick up as I 
travel the State is that we're on the edge of some really 
draconian things happening to a lot of communities being fined 
for past pollution of water. I was in one community last week 
and they said it's going to cost $26,000 per resident to pay 
the fine. Let alone get the money to do what they're being 
mandated to do.
    I'd be real interested in that, because those are resources 
that you're putting them, into waste treatment into water, 
which are very important, of course, fundamentals, but it does 
mean that those dollars are not available for some other 
purpose. It would be interesting to get a breakdown of--do you 
have that, Jess? A breakdown by category of how all the money's 
going out nationally in the ARC? I'm not sure how much for 
waste treatment facility, how much for water treatment, just 
public water supply, safe drinking water?
    Mr. Jesse White. We do have the figures broken down between 
sanitary sewer systems and drinking water. I don't know whether 
we have the figures about which ones are EPA compliance issues 
versus just, you know, more basic infrastructure.
    Tom, do you know whether we have that?
    Mr. Jesse White. We could probably tabulate that for you.
     Senator Voinovich. That would be interesting to find out 
where the dollars are going by category.
     Any thoughts either one of you have on how maybe we could 
do a better job of coordinating resources to make a bigger--
getting a bigger bang for our buck and also the need for 
expertise? For instance, you've got the entrepreneurship 
conference and people will be coming in. Should the ARC be 
looking at perhaps bringing in more staff people that would 
be--or creating a source of revenue where they could go out and 
spend time providing entrepreneurial training in the eligible 
counties?
    Ms. Hollister. I think even in listening to the 
infrastructure comments, because I think it goes back to 
infrastructure at the same time that you look at 
entrepreneurship. Because if you don't have the infrastructure 
in place, you won't have the entrepreneurship. And I think 
right now I know from Director Padgett or even from Dr. White's 
perspective as well as the local officials that are here, they 
can show you areas in their county that either have severe 
contamination problems or no infrastructure at all.
    I think that one of the things that could possibly be 
considered is a concept--and also a debatable point about land 
use planning at the local level, with townships and counties, 
and talking about where do we want this water and sewer to go? 
Where do we want some of these wireless or wired efforts with 
telecommunications to go? Where can we upgrade highways? Where 
should we have housing?
    I think that some of the distressed counties especially 
could use the targeted assistance to help them have these 
countywide discussions and debates about where they want to go. 
Because if they have a plan, then they can make better use of 
the resources.
    Then to partner with that, it has been a source of my 
frustration in dealing with USEPA that the State of Ohio 
receives an enormous amount of money in a revolving loan fund, 
and it's a low interest loan fund. I think you've probably 
heard me say this before. There's an echo in this room. But 
there are many of our distressed counties that won't play. They 
won't participate in the loan fund because the regulations are 
strangulation and they can't afford to pay it back.
    So, one of the things even at the Federal level in looking 
at this and having ARC as a player, to even have a set-aside or 
an earmark, whatever, to say that for distressed counties there 
would be a portion that if you participated through ARC in the 
EPA loan fund that you also got an equal grant amount--
something there to allow them to move forward I think a little 
more proactively. But I think it goes back to combining 
resources for communitywide discussions in every county and 
maybe putting forward some funding to say this is what we want 
to look like in 2 or 3 or 5 years.
     Senator Voinovich. You mean a facilitator to kind of help?
    Ms. Hollister. Yes, but that takes some funding.
     Senator Voinovich. Get everybody together and lay out a 5-
year plan, what their provision is.
     Ms. Hollister. That's tough to do because we have counties 
that don't want to do it.
     Mr. Jesse White. Last week, we were in the process of 
doing this comprehensive look at our distressed counties. Last 
week we had a field meeting in one of the two distressed 
counties in Pennsylvania. We heard a very moving story from 
Schuylkill County, which is a county that had communities on 
either side of the ridge who never worked together, and they 
went through a strategic planning process that really pulled 
the county together. That county's going to make it.
    But it was through sort of, ``soft investments'' developing 
the city infrastructure of that community, pulling them 
together, working with the newspaper, working with the private 
sector, and developing the vision. That's what a lot of our 
distressed counties need, I think, is really pulling themselves 
together and developing the vision and moving forward.
     Mr. Proud. Senator, you talked about having somebody to 
facilitate meetings. That's one thing that we do in our local 
development districts. With ADRC, we have contracts with 
counties to help them develop land use plans and because they 
didn't have the expertise in-house. So they went to ADRC, CDBG. 
Some of them don't have staff to administer all of the 
bureaucratic red tape that's entailed with that.
    So that's something that the LDD's are available to do, as 
well as to go in there and to assist. Not telling them what to 
do, but we go into the counties and into the townships and the 
villages and say, we are here to help you. You tell us what you 
want.
     Senator Voinovich. What are these, the countywide LDCs?
    Mr. Proud. The local development district covers all 11 of 
our counties, but we can go into any county that invites us.
     Senator Voinovich. So you do have that expertise to help 
someone?
    Mr. Proud. Yes.
     Senator Voinovich. One of the things that Ellen pointed 
out is that I introduced a bill reauthorizing the State 
developing loan fund. We do have specific language in there 
dealing with disadvantaged communities, to give them a break. 
One of the things that really needs to get across to everyone 
is the unmet needs that we have in this country today. We're 
celebrating the big surplus. The fact is that last year was the 
first year we had--and we really have not had a surplus, 
because the surplus initially was Social Security surplus. And 
last year we lockboxed that.
    But the fact is that we still have, ``surpluses'' because 
we have more money coming in from payroll tax from Medicare 
that's not going on. So that's money that's extra. They quote 
that as they consider that to be surplus. So there really isn't 
a quote on budget surplus to surplus. There's trust funds and 
Social Security.
    Now, we may have one based on some new provisions this 
year, but not a whole lot. If you look at that and you look at 
the unmet needs--I was in Cincinnati with the Mill Creek water 
district, water shed. I was presented with a national estimate 
of the unmet needs for O&M and for operations for sewer and 
water and just safe drinking water. In 20 years, we're talking 
about $2 trillion. So you understand what $2 trillion is, our 
budget this year in the Federal Government is $1.7 trillion. 
That's the whole budget. We're talking two trillion in that 
area.
    And then, part of my responsibility as chairman of the 
subcommittee is the Water Resource Development Act, the word of 
that legislation. We have $39 million worth of unmet needs. 
These are projects that have been authorized, that the money 
has been either spent on literally construction or design. We 
only appropriate each year in the energy and water 
appropriations $1.3 billion.
    We just have this stuff stacking up out there and nobody's 
kind of even paying attention. It doesn't count, and it seems 
to me that in any responsible organization you would look at 
these unmet needs that are out there where the Federal 
Government does have a role to play, and say, ``How can you be 
talking about new programs and some other ideas when you've got 
these things that need to be taken care of?'' So I think that 
in the process of--we need to put in and we did that in the 
Safe Drinking Water Act, put in some special language for 
disadvantaged communities.
    Mr. Proud. Senator, you know, talking about many areas, 
small communities will get water lines extended to them but 
still have onsite systems. Therefore, they use more water now. 
They take showers a little bit longer. Therefore, the onsite 
systems start malfunctioning and cause a problem as well. Then 
the health department comes in and things like that.
    There could be some way, again, that we could--where you 
put in that almost--have that highly recommended that also they 
would have wastewater. I know it might be difficult to do, but 
I know just in Clermont itself that has caused so many problems 
when a rural water company comes in and extends lines but 
there's no sewer available. Sometimes it exacerbates the 
problem.
    Senator Voinovich. Well, and some of that stuff you guys at 
the county level have to do.
     Mr. Proud. Give us the tools, and we will.
    Senator Voinovich. That's a good suggestion.
    I'm not going to ask any more questions, but I really would 
be interested in--we've got these priorities of where we can 
spend money, and I'd be real interested in getting your 
thoughts written down on--you know, there's water. One of the 
things that I remember most from dealing with Lake and Meigs 
County, they just wanted that. They needed an industrial park, 
but they couldn't have an industrial park without having the 
infrastructure in place. They needed the roads and they needed 
the water. How do you get the money in there to do it?
    It's the same thing when I was out at Rocky Boots this 
morning. If they hadn't had the money to put in the water lines 
or the roads, they may have gone somewhere else. I think that's 
something that we need to talk about maybe on the Federal 
level, but also on the State level in terms of, you know, 
things that the State should be looking at as to helping in 
terms of economic development.
    I want to thank you very much for being here today, and 
keep working.
    Our next panel is made up of Rick Platt, Larry Merry, June 
Holley, Eugene Collins, Mr. Wayne White, Dan Neff, and Leslie 
Lilly.
    I want to thank you very much for being here today. Since 
there are so many of you, I'm going to do what I do in 
Washington sometimes. And when that red light comes on, we'll 
have to call your testimony. Again, I want to emphasize that 
your written statements will be made part of our record, so 
it's available to the staff of the committee.
    I have no idea how you were chosen who was to speak first 
or last, but the first person that I have on my list here is 
Rick Platt, and I would ask that as you begin your testimony, 
if you could just give us just a couple of sentences about what 
your organization does so we could get a feel for that, unless 
your testimony goes into that part of it, OK? So I have a 
better idea and the folks that are here have a better idea of 
what it is that you're doing.
    Rick, I have a pretty good idea of what you do. You're over 
in Steubenville and Jefferson County, executive director of 
Alliance 2000, which I think is an economic development arm of 
the county. We're glad to have you here. Rick has worked with 
us and went over to Jefferson County. So we'll start with you.

   STATEMENT OF RICK PLATT, EXECUTIVE DIRECTOR, ALLIANCE 2000

    Mr. Platt. Senator, I'll join with everybody in thanking 
you for coming here today and giving us a chance to talk about 
what's happening in Appalachia and in Ohio. I'm going to be 
very brief. First off, let me tell a story.
    In 1997, one of our existing companies, a distribution firm 
with about 100 employees, came to us and said they had to 
expand, which is a good thing. They had run out of space where 
they are, could not expand their building, needed to have a new 
site, new building. They came to us. We showed their CEO our 
industrial park or what we called our industrial park, but it 
didn't have water and sewer and the roads weren't widened. It 
was really just an open field. He also went to West Virginia 
and saw what they called their industrial park. He located in 
West Virginia, left our county and took those hundred jobs 
away.
    It's not sour grapes that I tell that story, because 
ironically the West Virginia industrial park had ARC funds to 
get it ready. When he went to see their park, he saw water. He 
saw sewer. He saw roads that were ready to go.
    The story to finish--the end of the story is today, though, 
we are ready with ARC funds funding, attracting, leveraging 
more funds. Today we have an industrial park with the water 
capacity, the sewer capacity, three phase power, 35 minutes 
from Pittsburgh International Airport.
    This is a map that I brought up, and it shows several dots 
on that map. One of those dots is our industrial park looking 
at the micro level, looking at what we needed to do--water, 
sewer, roads--to get our park ready. But eastern Ohio has 
several industrial parks, the purple dots on this map. The 
counties that are on a corridor between Columbus and Pittsburgh 
are industrial parks that in the last 10 years have been funded 
with ARC funds.
    Senator Voinovich. So people can get an idea, why don't you 
just quickly go over them so they get a sense of what you're 
talking about.
    Mr. Platt. We have our Jefferson County industrial park 
outside of Steubenville. Cadiz, Newcomerstown, Coshocton is 
working on one right now. Guernsey County has several. 
Zanesville has one that's been very successful. We'll hear from 
them. Those are the counties that are in eastern Ohio that have 
industrial parks, so dots on the map.
    What we're saying here, though, is let's take a macro 
picture. We need to connect these dots. It's not about pork. 
Connecting the dots is something that we need to do. Five key 
projects really will connect the dots--these industrial parks 
in eastern Ohio. We have this 12 miles between Coshocton and 
Dresden that's two-lane right now that really connects the 
western part of this Columbus/Pittsburgh corridor with I-77. We 
have 28 miles from Newcomerstown to Cadiz. Right now there's 
nothing there. We need to connect to finish the eastern leg all 
the way to Pittsburgh and Pittsburgh International Airport. 
Those two highway projects alone give eastern Ohio access to 
direct flights to Europe out of Pittsburgh.
     Senator Voinovich. How much of that area is in ARC?
    Mr. Platt. All of the yellow counties that I show on here, 
there are 12 counties shown, 10 of them are Appalachian 
counties.
     Senator Voinovich. Any of those roads on the grid, they're 
new ones?
    Mr. Platt. No. None of them are on the grid. We mentioned 
the 41 miles. Those are not part of the 41 miles.
    Senator Voinovich. So that's probably something that they 
are seeking to do?
    Mr. Platt. I think ARC funds give us the opportunity to use 
the leverage to get started on these projects so that we can 
see them, sometime in our lifetime, get done. They're 
essential. They connect the dots. They give us access to things 
that we just don't have right now. When we talk to companies at 
our industrial park, we can't talk about anything west of us 
because you can't get there.
    They say when Jimmy Carter's motorcade came to Steubenville 
in 1979, you couldn't get from Steubenville to there. The 
motorcade got lost in Weirton. But with Route 22 being 
completed through Jefferson County, now we can get to 
Pittsburgh.
    Our unemployment rate is low because people are now 
commuting into Pittsburgh to find work. I think that with these 
highway improvements, we can stretch that further into parts of 
Appalachia, connect the true corridor between Columbus and 
Pittsburgh. We also show two key railroad projects that are 
part of the project. No. 1, from Newcomerstown down to 
Cambridge, to kind of reconnect some railroads that have been 
disconnected over the last few years and open all of really 
that southern part of Appalachia into the railroad again. It is 
still very viable. Then at the other end, off the Panhandle 
Rail line again, a small connection into the Warrenton River 
Terminal to give really Columbus one of the first connections 
to the Ohio River, many companies along this corridor the 
ability to get their product either off or on the Ohio River 
and everything with that, and then last, then, improving that 
river port at Warrenton to give greater capabilities.
    So, again, my perspective is on the micro level, but we 
also have these projects connecting the dots. I think the key 
thing is--and it's been said by others, there's unfinished 
business in Appalachian Ohio. When you're talking about the 
reauthorization of ARC, clearly there's more work to be done by 
ARC. ARC work is not done in Appalachian Ohio.
    Senator Voinovich. That puts it together. It's interesting 
that I, once in a while, am in Pennsylvania and the Governor of 
Pennsylvania continues to complain that businesses in western 
Pennsylvania are moving to Ohio. I think that the Workers' Comp 
system that we reformed, people don't really pay attention to 
it, but it was called a silent killer of jobs at one time. 
Today it's one of the best systems in the country. Now people 
are wanting to come to Ohio because of what we're doing in that 
area. So thank you very much.
    Our next witness is Larry Merry. He's the executive 
director of the Zanesville Muskingum County Port Authority. 
Good to have you here.

   STATEMENT OF LARRY MERRY, EXECUTIVE DIRECTOR, ZANESVILLE-
                MUSKINGUM COUNTY PORT AUTHORITY

    Mr. Merry. Thank you, Senator.
    Also, I want to thank you for your interest in working with 
the ARC. I know what you did for the Office of Development when 
you were Governor. If you can help ARC, that's going to be a 
great step.
    I'm going to touch a little bit on the past and Muskingum 
County and my written testimony touches on that. We're a county 
that's in a lot of transition and we're growing. A lot of that 
has been because, basically, to go back to the baseball 
analogy, we've built the ballpark. And when you go to the field 
of dreams, build it and they will come. The problem that many 
counties have in Appalachia is that they're not able to build 
it because you can't get them to come unless you have the 
ballpark already built.
    In Muskingum County, in 1992, when I became county 
commissioner, we had basically half of an industrial park is 
what I'd like to call it. We used some ARC funds, some CDBG 
funds, built an access road through it and been able to expand 
and bring projects to it. That isn't on Rick's map, but we do 
need to put on another purple dot. We also were able to develop 
our airport park and have several projects there and extension. 
ARC helped with the extension of a water line--a project that I 
think you're very well aware of that our county was successful 
in recruiting was the Auto Zone distribution center. I'm very 
pleased to tell you that they're close to 600 employees now----
    Senator Voinovich. No kidding?
    Mr. Merry [continuing]. At that facility. Yes. It's been a 
real success story. ARC money was involved in helping to place 
that infrastructure, a very expensive venture.
    Our county has been very committed and the commissioners 
continue to spend vast local dollars. But those local dollars 
can only be stretched so far. ARC's been a big player in that. 
We now have the third industrial park that is currently under 
construction that you will be very pleased is using some 
reclaimed strip mine land to put it to work in a different form 
than what it is today. I guess my plea is that there's a lot of 
communities that do not have that ability, that do not have the 
locations, and many of them surround Muskingum County. Morgan 
County still has a double-digit unemployment rate that they 
have not been able to enjoy some of the things. They're very 
dependent upon a lot of counties, Muskingum County, for a place 
to work.
    ARC--if there was a change in ARC, I would like to empower 
them. When we do ARC, we end up working with other agencies 
which are great, and we work with those agencies to receive 
some funding, but the complication that it adds in working 
directly. ARC makes local decisions by local people who are led 
by organizations that Muskingum County works with, Omega, and 
through Omega. I would rather see that be direct and I would 
rather see the money go directly and flow through there because 
they understand the local history, the local people, and the 
local needs. With it being driven--I know that's a change. I 
still think that there can be a sistering or a brothering of 
the agencies, but I think it's the complication and then it 
gets scary.
    There's three people that work at the port authority. Many 
counties in Appalachia have part-time economic development 
people. To start talking about doing several applications or 
different things and then if you apply for ARC and then you go 
to CDBG and go through that bureaucracy, many people--this is 
not a negative toward it, but they don't understand Appalachia 
when you start dealing with those other agencies. They don't 
know what it's like in Appalachia. They just assume that you've 
got a 10 person staff or something that's working in these 
counties. Many times, you don't.
     Senator Voinovich. I don't understand. You say Omega. You 
have to go through Omega to get your----
    Mr. Merry. That's the local.
     Senator Voinovich. What is Omega? What is it, an A-95 
group?
    Mr. Merry. We do that. We are also a sister agency with the 
Ohio Valley development commission. There's three LDD's in 
Ohio. The third one is the Buckeye Hills, Buckeye Valley 
Commission in Marietta.
     Senator Voinovich. You're saying the ARC money have to go 
through Omega before the counties gets it?
    Mr. Merry. I think that if that works, if the money could 
come through to those local agencies and be hand--basically 
work together, they could understand and work closely with them 
instead of working through the complicated system. That is 
giving ARC totally--it's changing it an awful lot, but it also 
gives them the responsibility and that ability to work through 
that agency.
    I guess I want to close with the fact that our unemployment 
rate in Muskingum County is 5.6 percent. I think it's the 
lowest it's been in many, many years. But there are still a 
tremendous amount of unemployed people. We have a lot of youth 
in Appalachia and a lot of that youth continues to move out and 
move away. That's OK if that's a choice they want to make, but 
many times it's a choice that they have to make.
    Appalachian Regional Commission's job is not done. We need 
to continue that effort to be able to work to allow things to 
grow. I guess more than anything people in Appalachia have a 
spirit and it's a spirit to continue and to continue to work to 
improve, and not to quit and leave. ARC needs to help that 
develop and to continue to let that spirit grow and flourish 
here. Thank you, Senator.
    Senator Voinovich. Thank you very much.
    We'll now hear from June Holley. June is president of the 
Appalachian Center for Economic Networks, ACE Net.

  STATEMENT OF JUNE HOLLEY, PRESIDENT, APPALACHIAN CENTER FOR 
                   ECONOMIC NETWORKS (ACENET)

    Ms. Holley. Right. I'd like to give you some of the 
testimony that evidently got lost on the way to Washington.
    I'd like to start giving just a little background 
information about ACE Net. We're an economic development 
organization that works with many other organizations to create 
a strong regional economy. Our strategy is kind of unique in 
that we focus just on two sectors--specialty food processing 
and technology--and try to mobilize as many resources in each 
of those sectors as we can. We've been working on the food 
sector for 5 years.
    Really, working with these partners, we've just assembled 
an incredible array of resources so that anybody with an idea 
for a food business can get the help they need to get started 
and then really grow rapidly. So the results, just to give us 
an idea, we had only five or six small food processing 
businesses 5 years ago when we started, and now we've worked in 
some way or another 175 in the Appalachian Ohio region. Many of 
them are startup. So we're getting this culture of 
entrepreneurship that a lot of us have been talking about. Now 
we really have these excellent entrepreneurs who are really 
capable of creating what we call $1 to $5 million businesses in 
the next couple of years.
     Senator Voinovich. What do they do?
    Ms. Holley. They're food processors. We have businesses 
that make pasta. We have six salsa businesses. We have people 
that are getting into ``nutriceuticals,'' just food 
supplements. Many of them are very high value food businesses, 
not just commodity kinds of businesses. They're making really 
state-of-the-art products that are very valued on the market 
and many of them are unique and innovative. We have this goal 
creating 50 $1 to $5 million businesses which would create 
1,500 quality jobs in the area. So this is an idea of extreme 
focus on a sector.
    ARC has been incredibly important in this. First, we talked 
about a one to two leveraging ratio. These projects have all--
these funds have leveraged many times more than that. We have a 
kitchen incubator. It's a licensed processing facility where 
you can rent the use of ovens or an automated bottling line to 
start your business without a huge capital expenditure. So lots 
of businesses come and get started there and then we help them 
move to their own facility. The dollars invested by ARC 
leveraged from the local banks and the Ohio Department of 
Development eight times a month that ARC invested.
    Then other ARC funds helped us sort of ratchet up the 
resources we could give these businesses. So we developed these 
food sciences resources. Five thousand dollars from ARC 
leveraged twenty-five thousand dollars in expert consultants' 
advice that the businesses can access. So they have really 
quality products and they can get into regional, national, and 
international markets. So now we're working to even double that 
amount. So it will begin----
    Senator Voinovich. Where are you located?
    Ms. Holley. We're in Athens, but we work with businesses 
throughout Appalachian Ohio. So we've worked with businesses in 
Zanesville and even out toward Pike County.
    Then--so that's the food sector. Now we're starting to work 
on the technology center with the Voinovich Center at O.U. and 
a lot of the other partners, Hocking College Innovation Center. 
But our first step in that area was this issue that you talked 
about really needing a work force. So we are setting up in the 
high schools a youth computer entrepreneurship program. It's a 
year-long program. Young people learn e-commerce skills so they 
can make really good e-commerce sites. Then they actually set 
up businesses and they start earning money right away part-time 
to supplement their family income.
    What we find out is that then they go on to college. These 
are kids who weren't going to go to college. They start going 
to college. Many of them keep this entrepreneurship. Some of 
them are starting to get really good jobs back in the area. We 
think that's really important that it's not just work force 
training, but sort of an entrepreneurial slant. So they can at 
any time go out and start their own business or work in some of 
the expanding businesses. But ARC money is kind of seed money 
to help us try that out.
    We've now leveraged that 20 times over with money from the 
Department of Education. We're going in seven schools this fall 
and probably the same amount next fall.
    So, you know, ARC is really making a difference through 
these programs. I think there are three concerns that we have, 
and the first is simply dollars. I just got in the mail last 
night the Journal of Appalachian Studies, and it said that ARC 
region only gets 28 percent per capita of the public investment 
of the rest of the country. Only 28 percent. So no wonder we 
still have--you know, we have not only huge problems, but we 
are getting less public dollars than other parts of the 
country. I think that to have this entrepreneurial economy is 
going to require some public investment to get things to 
catalog.
    Senator Voinovich. What are you talking about, 28 percent 
of public investment? What do you mean?
    Ms. Holley. I can send you the article. I just glanced at 
it.
     Senator Voinovich. What is that?
    Ms. Holley. I'm not exactly sure how they defined it in 
that. I just glanced at that and then it popped into my head 
this morning when I was thinking about this talk. I'll be glad 
to fax you that article. It was shocking to me to realize that 
there's that little per capita coming into the area.
    I think also another issue is that especially with some of 
these entrepreneurial projects, ARC has been sort of like 
seeding the field and just giving 1-year grants to a lot of 
programs. I think that we need to learn from what's been 
happening out there and identify those projects that are 
successful and do some multiyear funding. Because there are 
projects, there's a lot of mistakes you have to make. You have 
to figure things out. Then that's a longer term process. So 
having more multiyear funding I think is going to be really 
important.
    The third area which is already starting to happen somewhat 
is to be able to get a continual improvement system among these 
projects. They need to be linked up and networked so that we 
can be sharing among projects what we're--you know, funded 
projects, what we're learning, and find out what really works 
in this region. I know the office has supported a loose effort 
called the Appalachian Support Network. They helped us set up a 
youth entrepreneurship program that the Voinovich Center co-
sponsored. It was a great opportunity for the people in the 
region.
    They're also going to be helping with just a small amount 
of money so that we can bring in some national founders who are 
really for the most part ignoring Appalachia, period, as well 
as Appalachian Ohio, and help them find out about the need here 
so that we can bring in some more private dollars into the 
area.
    Senator Voinovich. Thank you. Thank you very much.
    We also have with us today Mr. Eugene Collins who's 
president of the board of Portsmouth Inner-City Development 
Corporation. Mr. Collins, we're very happy to have you here and 
we look forward to your testimony.

STATEMENT OF EUGENE COLLINS, PRESIDENT OF THE BOARD, PORTSMOUTH 
               INNER CITY DEVELOPMENT CORPORATION

    Mr. Collins. Thank you, Senator. First of all, I can say 
it's indeed an honor and a pleasure to be sitting here and 
testifying in front of the U.S. Senator and also ex-Governor 
Voinovich who played a very important role in Portsmouth Inner-
City Development Corporation.
    A story with Nancy that everybody seems to be telling, we 
have about--we had a million dollar project on a housing 
project, and we had a link of about $50,000 short. We contacted 
Nancy's office at the time and discussed this with her because 
the project was being held up by that. Nancy was able to give 
us the technical assistance of how we could go about getting 
some ARC discretionary fund money to deal with that project. I 
sit here proud to say that we now have senior citizens in 25 
apartments that was done by Nancy's giving us the proper 
guidance on how to go about doing it. Otherwise, that project 
would have been hung up.
    There's no question about ARC. ARC is definitely a 
necessity in the Appalachian area. The thing that I'm here to 
talk about mainly, though, today is that we have a special 
project that deals with youth entrepreneurs. The reason why I 
think that it is very, very important that this project 
continues, first of all, in the Appalachian region area, for 
whatever the reason is, a lot of people in many key positions 
don't feel that any blacks live south of Columbus. I sit here 
to tell you that there are blacks that live south of Columbus. 
Everybody seems to think that the only blacks are in urban 
cities. There are blacks that are living in Appalachian Ohio, 
and we're proud to say that we're part of Appalachia. And we 
intend and will continue to live in Appalachia.
    Because of that, we started a project for the youth 
entrepreneurs. This project is focused on minorities and 
females, but we don't turn away anybody who's interested in 
going into business. What we're saying to these young future 
entrepreneurs, that there are goals and objectives in life, and 
you can set your goals and objectives. If your goal is to be a 
business person, you should not let anything interfere with you 
not reaching those goals. So we feel very strongly that this 
can happen.
    One of the things that we have been able to look at and we 
think that it's very important that even from Washington back 
to look at this, and that is everybody is saying that now it's 
time to stop the welfare role. That sounds good and that's 
great, but the bottom line is that a lot of these young people 
are caught up into a system of many generations of welfare. It 
makes it very difficult for them to be able to leave this 
mechanism until such time that they get the proper training and 
understand that there is another way that they can go. This is 
one way that we think the youth entrepreneurship training 
program can work out for them. It will give them an opportunity 
to see how they can fit in somewhere else.
    In the midst of doing this, we have brought in presenters 
to come in and give presentations to them, how they can take a 
small plan of action and make it a future for them. Many of the 
young people are going to be looking at this. One of the things 
that we measured out was that in Ohio we found that if a youth 
is incarcerated, it costs between $25 to $32 thousand a year. 
And we're dealing with over 100 youths throughout special areas 
in the Appalachian region, such as Portsmouth, Gallipolis, 
Chillicothe, Hillsboro. Those are the areas that we're working 
very closely with, and we have over 100 kids that are involved 
in this. We have also put together computer labs because we 
think it's very important that every young person realize that 
the computer is the way of life.
    So in working in that manner, we think that the only way 
this would have happened would have been through the 
Appalachian Regional Commission. We think that by doing away 
with welfare, which I think everyone is aware of the fact that 
it is 5 years and out, now the question is what are we going to 
do at 5 years from now when we have this same problem existing 
as far as the poverty end of it? So that's why it's important 
that we say to the young people now that now is the time that 
you can do something with your life and you can make this work.
    We have put together this program with the idea of hoping 
that some of these young people will go into business, 
establish their own business. We feel very strongly that some 
of these young people will establish their own business. We 
know that there is one young lady right now--her and her sister 
are putting together a business that deals with selling 
Christian CD's. There is a possibility, they have set a goal 
that by the year 2001 they want to have sold over $20,000 worth 
of CD's. It makes it very, very difficult for you as a 
Christian to look a young person in the face at 16 trying to 
sell you a CD and say you will not buy. They have something 
going.
    So what the young people come up with and the ones that we 
have met and talked to, they gave us their motto, which I think 
was very appropriate, in which they said business first in the 
21st century. We feel that if we can get 50 percent of those 
young people to continue their education and go into any type 
of business, it's going to be beneficial to the Appalachian 
area. It's better to pay now than to pay later for young 
people. We feel that if we do not give them some ideals and 
some opportunities, then we'll pay later by having them 
incarcerated. We don't think that's the answer to the problem. 
We think that we can help solve the problem.
    I want to close by saying one thing. I think it's of the 
utmost importance, Senator, that the people in Washington 
realize that everyone that lives in Appalachia in most cases 
live there because we love it. Because there's other parts of 
the country that we could live. And for that reason, we feel 
that if we could get the assistance financially, the technical 
experts in this area could see that this area moves forward in 
the future. We think the 21st century is going to be really 
surprising to people as to what Appalachia can do if the 
Appalachian Regional Commission stays in existence. Thank you.
    Senator Voinovich. Thank you very much, Mr. Collins.
     Our next witness will be Mr. Wayne White, who is the 
executive director of the Ohio Appalachian Center for Higher 
Education, Shawnee State University.

STATEMENT OF WAYNE WHITE, EXECUTIVE DIRECTOR, OHIO APPALACHIAN 
     CENTER FOR HIGHER EDUCATION, SHAWNEE STATE UNIVERSITY

    Mr. Wayne White. Good morning, Mr. Chairman. As you said, I 
am Wayne White with the Ohio Appalachian Center for Higher 
Education, Shawnee State University. We often refer to it as 
OACHE.
    OACHE is a consortium with 10 colleges and universities 
within the 29 counties of the Ohio Appalachian region. The 
mission is simple: To increase the college-going rate. This 
mission closely correlates with the first stated goal of ARC. 
In fact, Federal co-chairman Dr. White had the list of goals up 
earlier, and the first one listed says that Appalachian 
residents will have the skills and knowledge necessary to 
compete in the world economy in the 21st century.
    The catalyst for the formation of OACHE was a comment by 
our famous restauranteur and then member of the Ohio Board of 
Regents, Bob Evans. Bob Evans made a comment to one of the 
presidents, and I think I can hear Bob saying this. You college 
presidents need to do something about our students not going on 
to college. From that comment came discussions that the local 
and State level and funding for Ilgard to do a study on what 
the college-going rate in Ohio Appalachia was. More 
importantly, it turns out, to delineate those barriers that 
prevent Ohio Appalachians from going to college.
    We all know obviously that Appalachians are proud, 
patriotic, hard working, honest individuals. However, these 
attributes are not sufficient for Appalachians to fully 
participate in the current economic growth our country is 
experiencing. In today's fast-paced, technology-driven economy, 
advanced skills and a life-long commitment to training are 
essential to secure and keep a meaningful living wage job. 
Again, as Bob Evans puts it often, the days are gone when hard 
work alone will get you there.
    To help our citizens free themselves from the vicious cycle 
of poverty, unemployment, and underemployment, we must address 
the issue of education. To that end, the access and success 
study by Ilgard forces us to reflect some disturbing facts. The 
college-going rate in Ohio Appalachia is 31 percent, compared 
to 41 percent in the State of Ohio and 62 percent nationally. 
Some barriers that are delineated in this study would include 
poverty, lack of role model, with only 8.8 percent of adults 
over 25 having a 4-year degree compared to about 23 percent 
nationally; lack of knowledge about college, including cost; 
the availability of relatively good paying blue collar jobs in 
the past that did not require high education attainment.
    But there's no question, Senator, the No. 1 barrier to 
postsecondary education by the folks in our area is low self-
esteem. Our children have the ability. They just don't know it. 
In fact, the study by Ilgard, when they asked the high school 
seniors in the 29-county area to rate themselves as above 
average, average, or below average in intelligence, 29 percent 
of Ohio Appalachian seniors report themselves above average. 
The same question of a national sample produces 58 percent that 
rate themselves above average.
    The socioeconomic picture is no better, Mr. Chairman, in 
other parts of the 13-State region. The New York Times article 
ran on July 27 noted that with the national economy bubbling 
along, soaking up workers and spreading wealth, much of 
Appalachia live not only with poverty and unemployment, but 
also with the humiliation of being taken for ignorant. This 
article notes that low educational attainment not only impacts 
the individual, but represents a huge reservoir of potential 
work force talent that is tragically going to waste.
    With this study in hand, the Ohio General Assembly in 1993 
established the Ohio Appalachian Center for Higher Education. 
I'm pleased to say, obviously, it was approved by our Governor 
and began to offer programs in public schools to address those 
barriers delineated in the study. I'm pleased to tell you that 
today we've had 79 projects with partnerships with schools 
along this 29-county area that increased the average college-
going rate 29 percent the first year and 24 percent for the 
first 2 years combined. These are all run in public schools by 
unpaid coordinators at the local level.
    Newcomerstown, for example, from 28 to 45 to 56 to 72 to 56 
to 78, and then 80 percent going to college. In Monroe County, 
over 50 percent of those students are going to college. You 
mentioned Meigs County, Southern High School there in Racine, 
for the last 3 years has beat the national average in college-
going rate and ARC has been right with us.
    The Federal co-chair addressed us in 1995. They were 
developing the strategic plan. We have a system going on now 
that I think you'll be very proud of to talk about--technology. 
The presidents wanted to link these institutions with the 
distance learning system. ARC gave us two planning grants. We 
parlayed those dollars with the help of Ameritech, Honeywell, 
GTE, and the Ohio Board of Regents to four and a half times 
that. We now have the dollars to link these institutions with 
the distance learning system. We have an educational training 
center from the Department of Education. We have one of the new 
projects in three seventh-grade schools, Trumbull, New 
Lexington, and Roseville up in Franklin County. The list goes 
on and on, Mr. Chairman.
    But the Federal co-chair and his staff, as well as Director 
Padgett and the previous directors of the office of--the 
Governor's Office of Appalachia, including the one seated on my 
right, have been so helpful to this consortium as it tries to 
address the educational attainment level that will give our 
children throughout the 29-county area some hope and some 
skills that will move them hopefully from a way of poverty. 
There's more testimony, obviously, and I'd be glad to leave 
that for the record. Thank you, sir.
    Senator Voinovich. Thank you very much for being here.
    Our next witness is someone that's familiar to a lot of 
people here in the audience, and that's Dan Neff, who's the 
director of the Ohio Mid-Eastern Governments Association. You 
bring lots of background to that organization. I'm glad to have 
you here, Dan.

 STATEMENT OF DAN NEFF, DIRECTOR, OHIO MID-EASTERN GOVERNMENTS 
                          ASSOCIATION

    Mr. Neff. Thank you, Senator. It's a pleasure for me to be 
here today and be a part of this panel. I think you can see 
today from the previous testimony the many positive aspects of 
the ARC program.
    Senator Voinovich. Let me just say something. It really 
tickles me to see some of our people that worked in State 
government moving out and going to various places. It's part of 
the job of being Governor that you see all these people growing 
and taking on new things. I have to tell you it makes me feel 
very, very good.
     Mr. Neff. I appreciate those comments. I have to tell you, 
one of the most difficult decisions I had was to leave your 
Administration. I had the pleasure of working with many fine 
people, yourself, and Lieutenant Governor Nancy Hollister who I 
hold very dear. It means a lot to me personally as well as 
professionally. I would not have left if it wasn't for the fact 
that I quite frankly really believe in the work of ARC and the 
work of the local development districts. I think they have a 
very important role to play. I believe they are making a 
difference. You do have my testimony for the record. I'll try 
to keep my comments brief.
     I would like to point out a couple things that have been 
touched upon, and I want to just touch upon them a little bit 
further. First of all is the flexibility of the program. I 
think that is one of the one elements of its success and that 
it has really done a lot in the respect that when you think 
Federal programs, oftentimes you think bureaucracy, time, 
paperwork, all the things that make people cringe. As Larry 
Merry cited, different application forms and all the different 
things you have to go through.
    One thing about ARC, while there are applications and 
processes to go through, they're not big on bureaucracy. 
They're a phone call away. Staff is looking for ways to help 
you approve projects, not to find ways to disapprove projects. 
That's at the State level as well as the Federal level.
    The other thing is the fact that the commission has really 
seen fit to try to be a flexible and balanced program. We've 
heard a lot of talk about distressed counties today. I think 
that's very critical. The ARC and the dollars that have been 
spent on distressed counties has exceeded 50 percent. That has 
a lot to say about the program. However, I don't think we can 
lose sight of the fact that there are growth centers that still 
need to be primed and ready. Larry, again, cited those in 
Muskingum County. I think from our standpoint, Muskingum County 
is one of our prime growth centers.
    It would be remiss for us not to look at--while the fact 
that Muskingum County itself is prosperous and growing and 
having new plants and expansion, it's also benefiting a region 
around that area that includes distressed counties and at-risk 
counties, including Perry and Morgan and Guernsey. So there is 
really very great benefit for all of those counties, not just 
Muskingum County, with the investment that ARC is making.
    I'd also like to point out again the value of the 
partnership that exists at the local, State, and Federal level. 
It's a very unique structure. I do not know of another Federal 
agency that has the structure and where, as Commissioner Proud 
pointed out, the driving takes place from the bottom up. Most 
of the project priorities are taking place in Ohio at the local 
level with the local leader being mayors and economic 
development professionals. They're saying these projects are 
what are important for us to do to make a difference for our 
communities and improvement the quality of life in these 
communities. So that has made a big difference. One of the 
things that I'm most proud of is the fact that we can play an 
important role in that process of bringing those people 
together as facilitators and helping them be successful at the 
local level.
    Again, the strong leadership from Dr. White--that I think 
it is important to point out that he and the Governors play a 
vital role in determining policy and direction and where the 
program is headed, and what those priorities are going to be. I 
have to point out, too, that the fine executive director 
leadership of Tom Hunter has honed the machine to be very lean 
and mean, if you will. The money can flow quicker and faster to 
those areas that have the needs that they do.
    Again, the value of the interchange between the State and 
Federal Government, the flexibility and accountability that 
exist in the program. The partners that Dr. White mentioned 
with the other Federal programs, I think that's been critical 
to the success of the Appalachian Regional Commission in these 
past several years. And, also, the initiatives that have been 
cited--leadership, export, telecommunications, and now 
entrepreneurship. One that hasn't been mentioned yet, that I 
think needs to be pointed out, is the transportation effort 
that has really done a lot to promote growth in the 
transportation area, with an intermodal focus of roads, rail, 
air and river.
    One of the things they're working on right now is river 
development with the Ohio River and trying to lead an effort 
that will bring together Pennsylvania, West Virginia, Ohio, and 
Kentucky to look at the Ohio River and marketing the Ohio River 
to the rest of the Nation and the world as to what it can bring 
and do to improve transportation of products. So, again, I 
thank you. I appreciate the opportunity to come today. I look 
forward to the rest of your visit.
    Senator Voinovich. Thanks very much, Dan.
    Our next witness is Leslie Lilly. She's president and chief 
executive officer, Foundation for Appalachia in Ohio. Leslie 
and I had a chance to talk a little bit earlier today. I really 
don't think that enough Ohioans are aware of the fact of the 
tremendous role that the foundation has played in the lifeblood 
of our State. We have one of the best statewide organizations 
that tie together.
    I don't know, Leslie, if you've had a chance to go to any 
of their meetings yet, but you've got some real great 
colleagues throughout the State. One of the things that I'm 
very proud of is that the First Community Foundation was 
founded in Cleveland, OH. When we lost our daughter in 1979, we 
created a foundation in her memory for the major work program 
in Cleveland. The Cleveland foundation is running that for us. 
Just to have the foundation there that can kind of be the host 
for this whole thing that we're doing in memory of our daughter 
is really heart warming.
    I also mentioned to Leslie that little controversy about 
the estate tax law in the State. I've been pretty clear that 
I'm not for reducing any taxes right now. I think what we need 
to look at is estate tax, the marriage penalty, a lot of 
things. The whole tax reform. The fact that 60 percent of 
people in this country have to hire some lawyer or accountant 
to figure out their taxes is a mess.
    I think that we talked about some other unmet needs that we 
have in our country. We also have a big national debt. It's 
$5.7 trillion. One of the things that really is of concern to 
me and I think should be of concern to everyone at this table 
as they're looking at the Appalachian Regional Commission and 
looking at some of these other Federal programs is that at this 
stage we're spending 13 cents out of every dollar on interest 
payments. We spend more money on interest today than we do on 
Medicare. We do another couple of pennies on defense more than 
that, and then we spend another 4 cents more than we do on 
paying interest for what we call non-defense discretionary 
domestic spending. Then 53 cents goes for mandated costs.
    We call them entitlements. Medicare, Medicaid, Social 
Security. In 10 years, 70 percent of the budget is going to be 
used for Medicare, Medicaid, and Social Security. That leaves 
30 percent to take care of the ARC, pay interest, provide for 
our national defense. Anyone that's been in government as long 
as I have, knows when you hear that kind of debt and you have a 
couple of good years, what you want to do is pay the debt down 
and reduce it.
    When I got married almost 40 years ago, we paid 6 cents on 
every dollar. Now it's 13 cents. And if you can get rid of that 
interest cost, then there's more money for the kind of programs 
that we're talking about here and also for some legitimate tax 
reductions that are more evenly based. But one of them was the 
estate tax.
    I was pointing out that a lot of people are not aware of 
the fact that the person that was one of the biggest proponents 
of the estate tax in the United States was a man by the name of 
Andrew Carnegie. Andrew Carnegie was an immigrant from Donfern, 
Scotland. He came here and he made a whole pile of money. He 
left Scotland because he didn't like it. One of the things he 
wanted to do was make sure that we didn't end up in the United 
States with the kind of system that they have over there. It 
still exists. There's a big gulf between the real haves and the 
have-nots. So one of the things he did was he thought that the 
estate tax would help to eliminate that situation.
    I know some people say, ``Well, it's an anti-free 
enterprise.'' I think that too many people are included today 
and we need to change it. But the point I'm making is, his 
attitude was he didn't want to have this whole gigantic 
structure like they have over there.
    The last thing he said, it's kind of interesting, is that 
if he had the estate tax, it would encourage people to be 
involved in philanthropy. I'm sure everybody at this table 
gives a lot of money to charity. I'm sure I would continue to 
do it. It sure helps that it's deductible. I look around at 
hospitals and other things that are being done around this 
country and foundations that have been created and so on and so 
forth. I can't help but believe that one of the incentives for 
it is the fact that people would rather give it out to 
something that they'd like to have a handle on than wait until 
they die and have Uncle Sam take it away from them.
    But that's just a little sideline of some of the things 
that we're dealing with today in Washington. But I'm so tickled 
to hear that we're going to have this Appalachian Foundation 
and it's going to benefit, what, all of the----
    Ms. Lilly. Twenty-nine counties.
    Senator Voinovich. The counties that are involved in Ohio. 
Its home is going to be right downstairs; isn't it?
    Ms. Lilly. That's right.
    Senator Voinovich. That's wonderful. So we're anxious to 
hear what you're doing.

   STATEMENT OF LESLIE LILLY, PRESIDENT AND CHIEF EXECUTIVE 
            OFFICER, FOUNDATION FOR APPALACHIAN OHIO

    Ms. Lilly. Thank you.
    It's a privilege to have you visit this morning. I shared 
in a lot of excitement with the community. Six months ago, the 
foundation wasn't on the town square. We were still at the 
leadership level really beginning to do the work of developing 
the organization and building a steering committee of leaders 
that came together across the region who were concerned for the 
future of Appalachian Ohio, but understood the significance 
that philanthropy can mean for communities who are doing the 
tough work of community development.
    I know that you're here today in a community, too, that is 
typical of the region that it was really based on an economy 
that came from an area that never envisioned a time or era when 
the future economy of the region wouldn't be driven by that. 
You're in a community that helped to develop a strong mode of 
optimism about the future in Appalachian Ohio. It built this 
town square. It helped raise this beautiful opera house. It 
gave flower to what turned out to be a relatively short-lived 
era of prosperity.
    So when folks talk about the whole notion of resilience, of 
volunteerism, of love of community and the ability to give, 
this community and the leadership that you've heard from today 
really exemplifies in my mind some of the best of what can 
happen when the talent and skills of our communities come 
together to help make a positive change.
    The Foundation for Appalachian Ohio is unique. I think 
that's a watershed for a variety of reasons. In 1998, the 
foundation was the recipient of a 3-year grant from the agency 
in the amount of about $400,000. This grant was made by ARC to 
the foundation as seed and development money and, in my 
knowledge, a type of grant for purposes that are really 
unprecedented in the agency's history. Its purpose was to 
provide startup funding which also helped to leverage other 
money from private sources, both other foundations in the 
State, individual donors, and then ultimately a million dollar 
challenge grant from the State of Ohio which we also hope to 
encourage private funding and funding from other corporate 
donors and individuals in the region who have also been a part 
of the Appalachian experience, either came to school here, 
worked here, born and raised here, who have gone someplace else 
who want to find a way to give back.
    The reason that the foundation was created was because 
Appalachian Ohio has over 12 percent of the State's population 
but less than 2 percent of the State's philanthropic assets are 
found here. If you've ever been on the grant seeking side of 
the table and you begin to look at the kinds of dollars that 
are needed to leverage community opportunities, you understand 
how important that venture capital from private sources can be.
    So philanthropy has been another one of the missing 
ingredients that together form the infrastructure for community 
development that's needed by Appalachian Ohio. When you compare 
this region to the rest of the State and Nation, permanent 
philanthropic assets and institutions are largely absent or 
undercapitalized here. We are, however, extremely fortunate 
that Appalachian Ohio has approximately 20 community 
foundations that now exist or that serve various portions of 
the State in the 29 counties. But typically the size of their 
endowment and the amount of their grants each is able to make 
is far less than urban institutions.
    As you noted, Ohio invented the community foundation. We 
have the largest one in the country in Cleveland. But of the 
top 10 independent foundations by assets, the top 10 community 
foundations by assets, and the top 10 corporate givers by 
giving, none are located in Appalachian Ohio. You know that 
location of permanent assets is strongly related to the issue 
of where grants are in majority need. So Appalachian Ohio is 
not a funding priority of any of the top 10 charitable givers 
in the State.
    So it's a circumstance of place--this is something that we 
can work with the partners external to this region, but in the 
end, Appalachian Ohio needs its own infrastructure to promote 
charitable giving. The grant made to the foundation by ARC is 
all about building home-grown possibility to attract and build 
charitable assets.
    We spoke earlier about endowment. Endowment is the way to 
give back to the community in perpetuity so that the endowment 
is held forever and it's the earnings that are created by that 
endowment that help to give communities the capital that they 
need to undertake creative projects.
    So we think that endowment needs to be built two ways in 
Appalachian Ohio. One is to create an overarching source of 
capital for regional improvement to help communities do the 
work of coming together, and another is to provide money that 
can be held locally as assets in the form of charitable 
foundations or community funds. We have a partner here, the 
Muskingum County Community Foundation, an excellent example of 
the kind of local institution that every community really needs 
the benefit of, in order to have resources to help fuel the 
kinds of things that communities think are important to do and 
for which is their priority.
    So, in summary, I would just say that the grant money by 
ARC is important for a couple of reasons. First, it recognizes 
that philanthropy is an important ingredient in community 
development that the region needs that we haven't had but we've 
had the capacity to develop. Second, is that philanthropy is a 
big partner in the efforts being taken, partnering with 
national foundations, as well as those within the region or 
those locally. The conference on entrepreneurship is an 
excellent example.
    So the work is not yet done. The Foundation for Appalachian 
Ohio is just getting started. But our goal is to help 
communities do the work and make philanthropy part of the 
vehicle to get that done.
    Senator Voinovich. Thank you very much.
    I just checked with Ellen, and we're supposed to end the 
hearing at 11 o'clock and it's 11:30. So we've been having fun. 
I just want to say thanks to all the witnesses for being here 
today. You have given me some different facets of this diamond 
of the ARC and helped me to better understand what's happening 
here. Frankly, I'm very impressed with some of the very 
positive things that you all had to say.
    I look forward to getting out today and seeing some of the 
projects firsthand that have benefited from leadership from 
people like yourselves and from the money provided by the ARC. 
Thank you very, very much.
    Again, I want to thank the community for allowing us to use 
this wonderful facility. I'd love to come back sometime and see 
a performance here. Thank you very much.
    [Whereupon, at 11:33 a.m., the subcommittee was adjourned, 
to reconvene at the call of the chair.]
    [Additional statements submitted for the record follow:]
        Statement of Eugene Collins, Portsmouth Ohio Inner City 
                        Development Corporation
    To the Chairman and members of the Environment and Public Works, 
Transportation and Infrastructure Subcommittee.
    My name is Eugene Collins. I am an American citizen and a veteran 
of the United States Army and President of Portsmouth Ohio Inner City 
Development Corporation, a 501-C3 non profit corporation. We are a 
recipient of an Appalachian Regional Commission regional initiative 
grant that focuses on developing an interest in entrepreneurship among 
youth in a ten county area.
    This project has touched the lives of over one hundred youth in 
several Appalachian communities within the Ohio Valley Regional 
Development District. The reason this program has been so special to us 
is because we feel that small business ownership is a way that any 
American can be successful if he or she sincerely believes in the 
business and works hard to make it a success. We are also very high on 
entrepreneurship because it is still the case that small businesses 
account for the vast majority of new jobs created by the American 
economy.
    Participation is open to all young people in the target area who 
are between the ages of fourteen to twenty-two. However, the project 
places special emphasis on minorities and females. Many of our 
participants face enormous barriers to success. They are being raised 
in poverty stricken homes and are at risk of dropping out of school 
and/or engaging in criminal behavior. We feel that our Youth 
Entrepreneurship Initiative gives them a new career option to consider 
and fortifies them with the motivation to break the cycle of poverty 
that is so common to Appalachia.
    The project's work plan consists of structured training seminars 
and workshops held in various locations throughout the region. 
Participants are given the basic information necessary for starting up 
and maintaining a new business. The hands-on instruction is presented 
by successful business owners whose background resembles that of the 
participants. The project supplements the nuts and bolts information 
with motivational speakers and presenters who emphasize the importance 
of education as the key to successful business operation and show them 
ways in which that education can be obtained. Participants are also 
linked with a mentor in their home area who has successfully started 
and operated a thriving business. The mentor is available to answer 
questions, help develop business plans and offer other follow-up 
support. The mentorship component also gives the youngsters the 
opportunity to see first hand how entrepreneurs operate their 
businesses.
    The project will also provides no interest loans for up to twenty-
five young men and women who wish to start their own full or part-time 
venture and develop workable business plans.
    Ultimately, we wish to instill in the youth of our area the belief 
that regardless of race, creed, color or where you may live in America 
you can be a successful businessperson.
    We believe that the creation of a new group of potential 
entrepreneurs within Appalachian Ohio will be a positive force for 
economic development of the area. This project and others like it 
deserve the continued support of the Appalachian Regional Commission 
and other funding sources.
    The Motto of our program is: Business First in the Twenty-First 
Century.
    A synopses of the project's approved work plan is attached to this 
statement.
 identification and description of the area to be served by the project
    The area to be served consists of Scioto, Gallia, Lawrence, Pike, 
Ross, Adams, Brown, Highland, Jackson, and Vinton counties of Ohio. The 
project's target group will be minority and/or disadvantaged youth aged 
fifteen through twenty-one who display an interest in entrepreneurship 
as a career choice.

   OBJECTIVES OF THE PROJECT AND RELATION TO ARC STRATEGIC GOALS AND 
                    REGIONAL/LOCAL DEVELOPMENT PLANS
    The continuation project relates to Federal/State ARC goals of 
creating dynamic local economies and support of entrepreneurial 
activities in Appalachian counties. It addresses regional goals of 
access to capital and financial assistance and technical and managerial 
assistance. The major objectives for the project are:
    To introduce a minimum of 130 young men and women to the 
opportunities available through entrepreneurship and self-employment as 
career options.
    To identify and utilize no fewer than 20 successful businesspersons 
to serve as mentors to participants.
    To identify and recruit appropriate providers of financial, 
technical and business support services.
    To provide opportunities for participants to actually begin their 
own businesses through small start-up loans and assistance in 
consignment of participant generated goods or services through 
appropriate outlets. It is expected that 30 participants will take 
advantage of this opportunity.
    The youth business loan component will be administered in much the 
same way as PIDC manages its existing adult microloan component. 
However, some concessions will be made to the particular needs and 
circumstances of the target group. For example, requirements for 
personal credit histories and collateralization of loans will be 
waived.
    PIDC's microloan committee will review applications for youth 
microloans, which will average $500. That committee consists of PIDC 
senior staff and selected members of the Ohio Valley Minority Business 
Association. Approval will be based upon the viability of the 
individual business plan submitted by the loan applicant. Development 
of a successful business plan will be a key element of the workshops 
and seminars referred to below in this narrative. In addition, project 
staff will provide hands on assistance to participants in developing 
their specific plans. Loans will be made at no interest and will 
normally be repayable in equal monthly installments with the first 
payment due six months from the business start-up date. Repayments will 
be deposited in an escrow account and will be used to maintain an 
ongoing capacity to make future youth microloans after the termination 
of ARC support.

                      NEED/PURPOSE OF THE PROJECT
    Appalachian Ohio has not fully enjoyed the benefit of the longest 
peacetime economic boom in the nation's history. Unemployment and 
poverty rates remain unacceptably high within the target area. Monthly 
unemployment statistics in each of our counties are consistently double 
the State and national averages. Youth unemployment shows even higher 
percentages than those for the general population. Although some 
economic development activities have been successful in obtaining new 
jobs in the area, these efforts have not kept pace with the need. The 
lack of opportunity is compounded for many minority youths who are 
faced with a number of other barriers to successful employment. One 
significant barrier we have found is that many minority youngsters are 
reluctant to consider self-employment as a career option.
    The Youth Entrepreneur Initiative recognizes that the vast majority 
of new jobs generated in our national economy are created by either new 
or expanding small businesses and we propose to address our local need 
by expanding the pool of potential entrepreneurs in the area.

                       DESCRIPTION OF THE PROJECT
    Informational meetings will be held in each of the ten counties to 
explain the format and content of the Youth Entrepreneurship training. 
These meetings will describe the opportunities and obligations 
associated with the formation and management of one's own business. 
PIDC's project staff and appropriate program consultants will conduct 
the meetings. Transportation will be provided for those require 
assistance in attending.
    PIDC will publicize the meetings through an extensive media 
campaign using both regional radio and newspaper advertisements and 
radio and TV public service announcements. Informational material 
promoting the program will be distributed to each high school, 
vocational school and college within the region. Material will also be 
made available to local economic development and social service 
agencies for distribution.
    The program will culminate in a series of ten workshops in various 
regional locations that will provide detailed information to 
participants on the basics needed to launch an entrepreneurial 
enterprise. Topics will include, but not be limited to: legal 
requirements, financial planning, banking, accounting, capital 
development, personnel selection and management, taxes, EPA/OSHA 
standards and business plan development. The workshops will be 
conducted by program staff and specialized consultants/presenters in 
each of the fields referenced above. They will be assisted by local 
volunteer professionals who have working expertise in each topic. 
Transportation will be provided for those without a means to otherwise 
attend.
    The project will continue to refine the content and curricula for 
the workshops. The approved content will be the joint responsibility of 
the individual program consultant/presenter and PIDC staff. Content 
will vary depending upon the specific areas of expertise each 
consultant/presenter brings and the needs and interests of the workshop 
participants.
    As a part of the program follow-up activities, each workshop 
participant will be linked to a local mentor who is engaged in or has 
expertise in the young person's field of interest. Each mentor will 
commit to a minimum of six instructional visits at the mentor's work 
site or other appropriate place. Mentorship visits will consist of 
participants engaging in supervised hands-on work, question and answer 
sessions and instruction in a variety of business procedures. Mentors 
will be selected on the basis of their expertise and ability to 
communicate information and their geographic proximity to the assigned 
participant.
    The program will continue to utilize its linkages to regional 
minority business organizations and the larger business community for 
identification and recruitment of mentors. These resources include the 
Ohio Valley Minority Business Association, businesses participating in 
the MCBAP activities, the economic development agencies in Portsmouth, 
Ironton, Chillicothe and Hillsboro, Chambers of Commerce, local 
financial institutions and post-secondary schools.

                    BENEFITS/RESULTS OF THE PROJECT
    It is expected that up to thirty of the young people participating 
in the project will ultimately engage in entrepreneurship as a career 
choice. This would result in creation of as many as 100 to 150 new jobs 
within the area, thus providing an ongoing benefit to local economies 
in the form of payrolls, expanded tax bases and stabilization of 
population. A shorter term benefit will be the income generated and 
hands on experience gained by those participants involved in the start-
up grant and consignment components of the program.
                               __________
  Statement of Hon. Nancy Hollister, State Representative, Ohio House 
                           of Representatives
    Good morning, my name is Nancy Hollister, State Representative of 
the 96th District, which includes Morgan County, and parts of Athens, 
Muskingum and Washington Counties. I welcome you Chairman Voinovich and 
members of the Subcommittee to this great region of the State.
    As a former Mayor of Marietta, Director of the Governor's Office of 
Appalachia, and Lieutenant Governor it has been my pleasure and 
frustration to participate in the ARC process. It has been a pleasure 
because ARC truly works from the ``grassroots'' up: local projects with 
regional input and State government support. My frustration has been 
the constant battle of explaining the benefits and the necessity of ARC 
to Congress.
    Why? When ARC was initiated, the war on poverty was declared and 
statements like ``We will eradicate poverty'' were made. These 
statements, while noble, were not realistic. The geography, the 
culture, and the changing economic conditions will never create allow 
the ``elimination of poverty.'' The true nature of the partnership 
between the ARC Federal, State, and local levels is one of opportunity 
to make a difference in the quality of citizens' lives.
    I can tell you that it is an organization that adapts to the 
political, economic and social changes occurring throughout the region 
and across the nation. One example of this adaptation is the ability of 
the Commission to deal with distressed counties. When the ARC was 
created in 1965, Congress mandated a ``growthcenter'' approach to 
community and economic development. The areas served were those that 
had ``significant potential for future growth where the return on 
public dollars invested [would] be the greatest.'' The thought was to 
generate development as quickly as possible.
    In 1981, that ``growth-center'' model came into question as ARC 
faced possible elimination. The Commission identified and sought to 
focus on counties that had not shared in the benefits of ARC's initial 
investments. ARC proposed to Congress the Distressed Counties Program 
and cited the needs of clean water and adequate sewers as the top 
priorities.
    When the Distressed Counties Program was implemented in Fiscal Year 
1983, the program set aside 20 percent of ARC project funds for 
distressed counties. In the 1990s, the way counties were designated was 
changed from being decided every 10 years to being decided every year 
based on rolling three year old numbers. This change allowed the 
designations to be more flexible and moreresponsive to changes in the 
economy.
    In 1994-95, as ARC support strengthened again, many called for a 
move toward a ``worst first'' strategy. From these discussions came an 
increase of the set-aside for distressed counties from 20 to 30 percent 
in Fiscal Year 1996 and the development of a four tier system of 
categorizing counties including: distressed and transitional (counties 
below national economic averages), competitive (counties near national 
averages), and attainment (counties at or above national averages). 
Program funding followed these categories as funding was restricted for 
competitive counties and virtually eliminated in attainment counties.
    When Congress reauthorized ARC in 1998 for the first time since 
1980, the ARC's distressed counties policy and classification system 
were written into the legislation.
    ARC has not been successful at self-promotion. But, I think they 
deserve credit for their successes. Prior to ARC's inception in 1965, 
there were 219 counties that met the current definition of distress. 
Since 1960, more than 100 counties have moved out of economic distress. 
This is a clear indicator of the progress that the program has made to 
the region's most in need residents.
    But, they know they have a long way to go. The number of distressed 
counties is on the rise again including in Ohio where Jackson County is 
now considered distressed. ARC is working to develop new strategies to 
address the problem.

                             ARC GOAL AREAS
    In 1998, Congress recognized the value of the goals and objectives 
of the ARC as a viable means to increase economic and human 
development. Through the reauthorization of ARC, Congress basically put 
into law ARC's strategic plan. Each State has the ability to identify 
its objectives and strategies for reaching the ARC goals through its 
own strategy statement.
    In Ohio, we embrace the five goal areas that ARC proposed to 
improve the quality of life for all Appalachians. I would like to take 
this opportunity to tell you about what Ohio has done within these goal 
areas during the last decade.
Goal 1
    The first goal identified by the ARC is that Appalachian residents 
will have the skills and knowledge necessary to compete in the world 
economy in the 21st Century.
     Wayne White, of the Ohio Appalachian Center for Higher 
Education will address you in a few minutes on the success of his 
project based in part from assistance the ARC has given his 
organization.
     The ARC funded the Jefferson Community College Engineering 
Computer Project in FY 1991. The project's purpose was to expand 
computer learning to meet specific industry needs. Industry in 
Jefferson County had concluded that Jefferson Community College was an 
excellent source for highly motivated and competent employees. Hoping 
to hire even more employees, the firms recommended that the college 
update its Computer-Aided-Design Laboratory and establish an 
Engineering Computation Laboratory. In its first year, the new CAD 
facility directly benefited over 220 design students. Over 1,100 
students were served by the Engineering Computation Laboratory, through 
new courses in computer science as well as significant enhancements to 
the College's advanced mathematics, science and engineering curriculum. 
ARC put $75,000 into this project leveraging an additional $75,000 in 
local and State match.
Goal 2
    The second goal identified by ARC is that Appalachian communities 
will have the physical infrastructure necessary for self-sustaining 
economic development and improved quality of life.
     Larry Merry of the Zanesville-Muskingum County Port 
Authority will be speaking to you shortly about the gap that ARC 
funding was able to fill allowing the Port Authority to construct an 
access road to an industrial park.
     Rick Platt of the Alliance 2000 will address you regarding 
the role of ARC in an industrial park.
     ARC funded the Austin Powder Rail Project in FY 1991. CSX 
Railroad announced that it would abandon nine miles of track serving 
the Austin Powder Company. Local leaders in Vinton County were very 
concerned as it served the Austin Powder plant, the county's largest 
private business, providing more than 260 jobs. Working closely with 
Austin Powder company officials, community leaders decided to try to 
save the line and sought support from the city of Jackson, in adjacent 
Jackson County, which already had acquired over 50 miles of track from 
CSX in an effort to sustain local industry. The city of Jackson secured 
funding to acquire the Austin Powder line and arranged for the Indiana 
and Ohio Shortline Railroad to operate and maintain the track. Instead 
of closing, the Austin Powder Company invested $4 million to expand its 
plant and created 50 new jobs. The rail has helped stabilize the local 
economy, which had a poverty level close to 50 percent when the project 
was originally proposed. The rail acquisition program has maintained 
rail service to over ten local companies, currently employing over 
1,000 people. The ARC funded $192,495 while State and local sources 
contributed $650,000. ARC has shown how its gap funding can make the 
difference in whether or not a project gets done.
Goal 3
    The third ARC goal is that the people and organizations of 
Appalachia will have the vision and capacity to mobilize and work 
together for sustained economic progress and improvements of their 
communities.
     Leslie Lilly, CEO of the Appalachian Foundation, knows the 
importance of local capacity and philanthropy and will discuss that in 
her testimony as she describes the assistance that the ARC has given 
the Foundation.
     Institute for Local Government Administration and Rural 
Development (ILGARD) at Ohio University, now part of the George V. 
Voinovich Center for Leadership and Public Affairs. Since 1981, this 
organization has expanded the capacity of government and nonprofit 
agencies to serve Appalachia's 29 Ohio counties. Functioning as a 
public service educational laboratory, ILGARD has provided small 
communities the same access to applied research and technical 
assistance as larger, wealthier communities. Staff and students work on 
approximately 35 projects per year. One typical project was the Monday 
Creek Watershed, a top State environmental restoration project. ILGARD 
helped establish a priority list of problems, coordinated volunteer 
projects and used its Geographic Information Systems (GIS) capabilities 
to create interactive maps of the watershed.
Goal 4
    The fourth goal area is that the Appalachian residents will have 
access to financial and technical resources to help build dynamic and 
self-sustaining local economies.
     The Revolving Loan Fund (RLF) program administered by the 
Ohio Valley Regional Development Commission (OVRDC). In 1995, OVRDC 
agreed to participate in a financing package involving private lending 
and owner equity in order to help a small manufacturing business 
expand. That business is MACA Plastics, Inc, a female-owned and 
operated plastic injection molding manufacturing firm in Adams County. 
As a result, 18 new jobs were created and the loan was paid off in two 
years. The company now employs 125 people and continues to grow and 
thrive as a major employer in the region. The RLF received an initial 
capitalization of $500,000 in Fiscal Year 1985 and has been 
recapitalized several times since then. Each time the fund has been 
recapitalized, the local match has been equal to the amount that ARC 
has invested in the fund. The other two LDDs have similar RLFs with 
very similar results.
Goal 5
    The fifth goal area is that Appalachian residents will have access 
to affordable, quality health care.
     Although Ohio still has a lot of progress to make in this 
final goal area, we do have a big success to tout. The Southeastern 
Ohio Dental Clinic is a full-service dental facility that was developed 
by a group of citizens and representatives of organizations whose goal 
is to provide low-income families access to low cost preventative and 
corrective dental services. The Community Action Corporation (CAC) of 
Washington and Morgan Counties manages the clinic. The successes of the 
program are astounding in the first six months of its second year of 
funding, the dentist saw 1,950 patients and the hygienist saw 645. Of 
that total number, 44 percent were receiving Medicaid, 51 percent were 
self-pay and only 5 percent had dental insurance. The clinic has 
expanded its acceptance of dental insurance and has achieved its goal 
of self-sufficiency. The clinic received funding in Fiscal Year 1998 
and Fiscal Year 1999 totaling $110,000 leveraging $317,500 in local and 
State monies.

                                                             ARC Funding in Ohio FY 1991-99
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              No. of                         Other Fed                                      Total Cost
                          Goal                               Projects       ARC dollars       dollars      State dollars   Local dollars      dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................              71      $7,765,842         $79,870      $3,465,892      $4,592,677     $15,904,281
2.......................................................             141      25,136,903      27,683,114      34,140,028      52,423,608     139,383,653
3.......................................................              32       2,127,570         230,053          67,170       2,367,427       4,792,220
4.......................................................              51       4,125,326         319,340       1,261,789       2,374,306       8,080,761
5.......................................................               9         646,211         183,720         448,634         512,883       1,791,448
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................             304     $39,801,852     $28,496,097     $39,383,513     $62,270,901    $169,952,363
--------------------------------------------------------------------------------------------------------------------------------------------------------

                               CONCLUSION
    ARC is now in a period of its history when they are addressing the 
harder-to-serve areas. ARC must be an integral part of any solution 
aimed at dealing with these harder-to-serve areas. The strategy should 
not be to pull away from ARC as the means to accomplish our goal of 
improving the quality of life for all Appalachians. They must be given 
continuing opportunities to complete the job that they have so 
successfully started.
                               __________
Statement of Leslie Lilly, President and Chief Executive Officer of The 
                    Foundation for Appalachian Ohio
    Several weeks ago I attended a town meeting organized by the 
Appalachian Regional Commission on strengths and strategies in 
economically distressed communities of the region. Of all the things 
said that day, I was most stunned by a remark made in passing by 
Governor Paul Patton of Kentucky. He said, simply, that the future of 
coal is dead.
    You are here today in a community and part of the region where the 
future of coal and by its extension, exportation of resources, was 
presumed to be forever. Think minerals, timber, clay, oil, gas, and 
river networks. Think agriculture, manufacturing, mining, construction, 
transportation, and trade. The region is blessed with an abundance of 
natural resources around which eternal enterprise and expansion of 
industry seemed not to be an unreasoned or unwarranted expectation. 
That strong note of optimism built this town square, raised this 
beautiful opera house, and gave flower to what turned out to be, on the 
lifetime scale of people and places, a short lived era of prosperity.
    Times changed. The economy changed. Assets left and were exported 
from our region that never came back. It didn't happen all at once. It 
didn't occur in the absence of community leaders that recognized that a 
sea-change was coming. They struggled to find alternatives. That 
challenge has always been formidable in the face of rural. Rural is not 
your one-size-fits all kind of place. Singular dependencies are hard to 
break precisely because it takes a great deal of ingenuity and 
sustained investment to take something in its natural state and to 
transform and add to its value, pursue markets, and supply demand when 
demand, by definition is so far away and fickle. You get something done 
one time and you tend to think you have accomplished your goal in a 
rural area and rightly so. Every economic benchmark achieved by this 
region has been hard won. So it isn't surprising that this combination 
of enterprise and success never mind the durability of it all still 
live on in this century. Quick fixes and short-term political memory go 
a long way in the face of long-term obstacles to diversified 
development.
    The remains of development-past linger on in Appalachian Ohio. This 
is commerce whose vestige is based in industries that have since been 
transformed by globalization and innovations in technology and 
communications. The region has the same old problem, but it has an 
updated and more modern look. Same dance, new shoes: not enough jobs, 
and not enough quality jobs in Appalachian Ohio that ensure a decent 
standard of living for those who would make and have made the choice to 
live here. But it doesn't stop there: the lack of jobs begat a lack of 
many other things that are needed to form the basis of a healthy cycle 
of community development:
    When the pace of development faltered in Appalachian Ohio or didn't 
occur with some cumulative measure or succession of positive effects, 
it meant that roads were neglected or never built or never completed; 
that transportation systems were not put in place or strategically 
positioned to attract and support commerce; that public investments 
were not made that ensured better government, better public facilities, 
better schools and better schooling; that access to health and medical 
services were limited at best, or, at their worse, nonexistent; that 
basic infrastructure water, sewer, and phone service, developed like a 
patch work quilt. Some communities have it all while in others, 
feasibility and construction costs are still an issue; and that the 
pattern of this underdevelopment extended itself into present 
circumstance and is now manifest in the digital era as the digital 
divide. Appalachian Ohio is not ready and not wired for the 21st 
Century. If the marketplace solely drives the creation of that 
capacity, there is healthy reason to suspect that the region will never 
be connected in ways comparable to urban communities unless the public 
interest prevails.
    Put all these things together and the conditions of economic 
context and geographic place together fostered a condition and culture 
of poverty for many of Appalachian Ohio's people. It is not just an 
attitude or a problematic mindset; or, as some would accuse, having an 
absence of resolve to do better or differently. It is a new verse, to 
the same song, sung in a present reality, that jobs in Appalachian Ohio 
have continued to vanish. While the State's metro areas have been 
scrambling to find workers, Appalachian Ohio suffered a series of 
devastating job losses in 1999 and more are predicted to follow as the 
region's traditional base of manufacturing and mining continue to 
shrink.
    In a rural market, the magnitude of the loss of 1,200 jobs ripples 
out into the region in countless ways, leaving behind a wake of 
economic decline and despair that penetrates deep into ancillary 
businesses and services. Were he to ask, Governor Patton would only 
find agreement in Meigs County that coal is, indeed, dead, at least for 
the 800 miners that will be the last to turn out the lights as they 
leave their jobs, many after over 20 years of labor in the mines. No 
one yet knows where next they may turn to work or even if there will be 
work.
    You are thus in a region that stands straddled across a threshold, 
with one foot deeply rooted in past social and economic history; and 
the other extended, tentatively poised, ready to strike out and step 
onto new ground and enter into a new era. Because of this, you are in a 
place of stunning contradictions: where 40 percent of the children ages 
3-4 in Athens County live below the federally-defined poverty level, 
and live out this devastation in the shadow of a world class 
university; where all the resources of the world can be accessed on the 
Internet highway, but if you want to drive somewhere in the region you 
mostly can't get there from here (or if you can, you'd better have 
plenty of time) because there isn't a modern road system; where young 
people and adults will soon have access to the latest and best in 
training on e-commerce at Hocking College but if you own a small or 
medium size business, you can't get a high speed connection to the 
Internet in most communities; and where the rise between 1984 to 1996 
in real per capita income based on 1992 dollars isn't enough cash today 
for you to go out and pay the book value on a used car made in '92. 
Appalachian Ohio is like a house that is being remodeled while you live 
in it: you know it is going to be so great when the job is finished 
but, in the meantime, there's the devil to pay.
    So do we need the Appalachian Regional Commission? Is its job done 
so we can all go home and spend these Federal dollars more wisely, or 
on something or somewhere else, or perhaps not at all? Based on 
unemployment, average per capita income, and poverty rates, Appalachian 
Ohio is the fourth poorest among Appalachian States. Federal money, as 
in all things characterized as "big government", is declining and 
spending by the State in Appalachian Ohio averages $3 per capita. 
Kentucky by comparison spent more than $18 per capita last year in its 
Appalachian communities. The paucity of both State and Federal 
resources being targeted to Ohio's rural areas of greatest need is an 
issue of both public and private proportion, but neither sector is 
capable or able to alone shoulder the leadership required to transform 
the region's shrinking economy. This is the crux of an important issue: 
who are and will be the future partners to accomplish what remains to 
be finished?
    The Foundation for Appalachian Ohio is unique among grantees of the 
Appalachian Regional Commission (ARC). In 1998, the Foundation was the 
recipient of a three-year grant from the agency in the amount of 
approximately $400,000. The grant made by ARC to the Foundation is, to 
my knowledge, a type of grant for purposes unprecedented in the 
agency's history. The Foundation for Appalachian Ohio is one of the 
more recently created foundations among all those that exist that 
represent an important network of community funds that are established 
in and across Appalachian Ohio. The Foundation for Appalachian Ohio was 
created in 1998 by a broad based group of community leaders concerned 
for the future of Appalachian Ohio. Appalachian Ohio continues to 
suffer from high rates of poverty, unemployment, and under-employment. 
In 1995, approximately 1.4 million people or about 12 percent of all 
Ohioans resided in the Appalachian region of the State. Yet less than 2 
percent of the State's foundations assets were held in the region.
    Philanthropy is thus another of the ingredients that is incomplete 
or missing that together form an infrastructure for community 
development in Appalachian Ohio. When the region is compared to the 
rest of the State and nation, permanent philanthropic assets and 
institutions are now largely absent or undercapitalized in Appalachian 
Ohio. This is an issue and an opportunity: Appalachian Ohio's capacity 
for self-help depends in large measure on having the means through 
which the region can invest in itself. There has never been a more 
promising era within which to grow and promote charitable giving in the 
region. The nation is experiencing the greatest expansion in its 
economy in modern history; and a vast, inter-generational transfer of 
wealth representing trillions of dollars will occur over the next ten 
years. Appalachian Ohio deserves to benefit from this abundance. The 
region, if it is to successfully tap and leverage this expansion of 
charitable wealth, must have home-grown capacity.
    In the State of Ohio, of the top ten independent foundations by 
assets, of the top ten community foundations by assets, of the top ten 
corporate givers by giving, none are located in Appalachian Ohio. The 
corollary to where permanent assets are held is ``as to where grants 
are made'' and by that measure, Appalachian Ohio is regrettably no 
where high on the priorities of the "Big Ten" in Ohio no matter what 
the brand or the origin of the philanthropic wealth may be. The 
continued growth and expansion of community foundations and other forms 
of organized philanthropy in the region is fundamental if the region is 
to attract and build the permanent assets that can be used to help 
communities in the region do the work of helping themselves.
    The philanthropy gap in Appalachian Ohio is an issue that is of 
concern to all our communities. It affects the extent to which a strong 
nonprofit community can exist and flourish in Appalachian Ohio; it 
affects the present and future sustainability of the organizations that 
public and private grantmakers seed and grow; and it affects the 
capacity of our communities to effectively network, collaborate, and 
together work in relationships and with the array of resources needed 
to accomplish results that are in the context of deeply rooted and 
formidable barriers to change.
    As a new form of venture philanthropy, the Foundation for 
Appalachian Ohio is a convergence of public, private and community 
resources focused on increasing the entire constellation of resources 
with which to promote charitable giving toward the development of 
communities throughout the region. Clearly, the scale and breadth of 
what must be accomplished is the work of many hands and many 
institutions in many places if the region is to reverse an historic 
pattern of decline.
    Implicit in the Foundation's vision is the value of partnerships 
and collaborations in helping the region to do better by working 
together. And while there are many old deficits with which the region 
must reckon, it is the region's opportunities for positive change that 
stimulated the Foundation's creation. There has never been, in our 
estimation, a climate more favorable or the timing more fortuitous to 
help Appalachian Ohio reach higher ground on a litany of old issues 
that have troubled the region's economy; and for all time, to help the 
region claim its equitable share in the prosperity of the State and the 
nation.
    There are strengths on which the region can build. Appalachian Ohio 
is fortunate to have the committed presence of the approximately twenty 
community foundations and the additional private sources of charitable 
funds that now exist in and/or serve Appalachian Ohio. Other 
communities are working hard to accomplish a similar charitable 
presence in their areas. Seldom is there a need to convince community 
leaders of the incalculable worth of a strong philanthropic partner in 
helping to increase the bottom-line needed to attract and grow a 
community's assets. At the Foundation, we believe philanthropic 
resources need to be grown at two levels in Appalachian Ohio: 
regionally, to help the region do better by working together; and 
locally, to help local communities capitalize on their own individual 
and unique opportunities. But building up a treasure chest for the sake 
of the size of the treasure is a hollow pursuit if, at the end of the 
day, that is all there is. At the heart of this enterprise is the love 
of the region and the gift of giving. It is the people, the communities 
and the relationships that foster improvement in the lives of families 
and children in the region that is the embodiment of the spirit of 
philanthropy. Philanthropy is, above all else, about creating 
partnerships.
    Sustainable development in poor and underserved communities 
requires at its core a process involving the breadth and commitment of 
diverse community partners public, private, and philanthropic. It takes 
communities that work like a community together, with each other, for 
each other, and for the long haul. The Foundation's presence is witness 
to what can happen when the public sector works to leverage for all 
time, the assets every community has hidden, waiting like diamonds to 
be unearthed if the right people, the right partners, the right ideas, 
and come together at the right time to make a difference.
    Appalachian Ohio has had its fair share of palliatives that cured 
nothing but remedied the symptoms. We believe the investment made in 
the Foundation by the Appalachian Regional Commission is its signature 
upon a crucial and timely recognition: indigenous, philanthropic 
institutions are a crucial and needed partner if communities are to 
have the capacity to build on and successfully leverage the 
comparatively shorter term investments enabled by the ARC and the 
public and private sectors. It is within the power and resources of 
every community to invite and promote acts of charitable giving that, 
in time, become permanent sources of regional endowment. We think the 
region is on the precipice of something new, something exciting, and 
something that will work.
    For our purposes today, it would be impossible to consider the 
likelihood of continued progress in making positive change without the 
committed presence of and partnership with the Appalachian Regional 
Commission. There are many places where it is making a deeply felt and 
genuine difference in the lives of our region's citizens. The Federal 
commitment to focus on the unique challenges of Appalachia gives 
substance to the idea that Federal citizenship means something. 
Appalachia's fortunes are indivisible from the fortunes of the nation. 
The State of Ohio's unprecedented public investment of $1 million in 
the Foundation signals a broad-based, public recognition that, for the 
State of Ohio to truly prosper, prosperity must be broadly shared. It 
is a principle and action that sets a new standard of engagement for 
those who claim to be serious about the business of building community 
no matter where they or the community might be. At its core are a 
philosophy of abundance and a commitment of responsibility.
    The Foundation supports the mission of the Appalachian Regional 
Commission. The agency is a knowledgeable and seasoned practitioner in 
the craft of what has and hasn't worked well in Appalachia. The focus 
and benefit of that experience is beginning to bear fruit that has been 
a long time in the making in Appalachian Ohio. This region and many of 
its sister communities may have, for the first time, a genuine 
opportunity to get their feet anchored and wholly planted in today's 
modern economy. The Appalachian Regional Commission deserves much 
credit for the opportunity that now illuminates the region's future 
possibilities. It should be allowed to finish the job.
                                 ______
                                 
                              Attachments
Resources for the Region: A Model for Building and Sustaining Permanent 
                    Investment Capital in Appalachia
    Decades have passed since the original groundswell of interest in 
Appalachia, more than a generation in fact. But, what has come about 
once usually comes about again. And so it is with the rising tide of 
interest in Appalachia these days.
    We are experiencing interest and involvement from the private 
sector, government, and foundations, and the media, among others. Each 
has been urged to take its interest one step further and provide more 
resources or provide resources more effectively in other words, to 
invest more and invest more wisely in the Appalachian Region.
    And yet, behind all the excitement and energy, something is 
missing. We expect to invest more, but we have no comprehensive model 
for achieving an even greater rising tide of resources and investment. 
We expect to invest more wisely, but we have no measure of success that 
values self-sustaining momentum and permanent capacity and assets, 
objectives that prior efforts failed to realize. Consider three 
conditions that may be holding us back, despite the renewal of interest 
in and present wave of excitement and energy about Appalachia.
    First, those of us who are focused on the Appalachian Region are 
doing our work and fulfilling our commitment in isolation--working, if 
you will, in our own silos from our turfs, as if each of us alone is 
shouldering the entire burden.
    Second, and related to the first, we are often looking to one 
another with expectations that someone else can help, or what could be 
worse, that someone else can provide us the resources to do our work. 
Thus, government convenes foundations and hopes they can help. And 
foundations look to government for funding philanthropic associations. 
And both look to the private sector--financial institutions, utilities, 
and other corporations--for investment capital. Seen this way, the 
public, philanthropic and private sectors are each working to leverage 
resources and investment capital from one another. Seen another way, we 
are all fund raisers and we are all donors.
    We need to realize that the problem is the size of the pot of 
resources we are allocating--and that the pot is quite small. We need a 
bigger constellation of resources and a larger universe of donors than 
those that currently exist. Per capita giving and endowment levels vary 
widely in Appalachian counties, but per capita giving and endowment, 
private investment, and government spending are in the aggregate very, 
very low. Focusing on philanthropy alone would unleash untapped 
resources in the region that could help significantly in creating and 
sustaining cycles of place-based community development that is 
regionally-managed and ``owned.'' We might also discover that existing 
resources and dollars could be more strategically applied.
    Third, also related to the first and second, is the absence of 
common ground or a civic space, free of the agendas embedded in 
government, foundations, and corporations in which we might converse, 
plan and work together on building investment and capital; raising 
resources; and providing leadership for the Region. While some of us 
have and provide more resources than others, and in that sense are not 
equal, we are equal in our interest and in our intention.
    Windows like this don't happen often. It is a continuum of 
resources--private, public and philanthropic--that has the best chance 
of succeeding in helping the region to build on its full array of 
opportunities. We need to be able to link resources and capacity 
together and separately in ways that can help actualize the right idea 
at the right time in the right place with the right leadership. 
Entrepreneurship and flexibility are key. Sufficient capital and 
capable leadership, provided they are nimble, will effectively respond 
to opportunities. But sufficient capital and capable leadership are 
themselves insufficient because, in order to operate effectively, they 
require preconditions like well-oiled working relationships and 
established communication networks, heretofore lacking in the Region.
    Were we to assume that the first, second, and third are right for 
now, what institutional perspectives and cultures, aside from the 
media, could be brought together for this conversation? What 
``divides'' currently exist, with respect to the Region, might be 
bridged in this uncommon yet common conversation?
     a geographical divide between those inside and those 
outside (the region)
     a philanthropic divide between types of foundations and 
foundation funds
     an institutional divide between foundations, government, 
and the private sector
     a technological divide between those with technology and 
those without technology
     a digital divide significantly disadvantaging small to 
medium sized businesses, rural communities, and philanthropic nonprofit 
organizations (in the region)
     a mission divide between private venture capital and 
philanthropic venture capital (or between profit and not for profit 
venture capital)
     an income and wealth divide between those that have and 
those that have not
     a political divide between parties, partisans, and 
political leaders
     a cultural divide between developed and less developed 
communities and between urban and rural populations
     a racial and ethnic divide between persons white and 
persons of color
     a strategic divide between what can be politically 
sustained in the short term and what must be practically accomplished 
in the long term in persistently poor communities
    Clearly, we could be building better bridges and creating a 
conversation space between capital in its three forms--one, financial 
capital (market investments, philanthropic grants); two, social and 
human capital (leadership development, networking, constituency-
building, relationship development, service, volunteering), and three, 
civic capital (leadership, engagement, participation).
    We could be finding more ways to convene and create cross-
conversation between those inside and outside the Region who could be 
investing in the Region.
    We could also be addressing what may be no more than an unfortunate 
consequence of language and metaphor--that we are unable to see how the 
public sector (local, State, regional and Federal agencies and 
political leaders), private sector (individual investors, investment 
firms, financial service institutions and utilities), and philanthropic 
sector (private foundations, community foundations, corporate giving 
programs) are each, in their own way, from within or from without, 
investing and providing resources to the Region. Borrowing a phrase 
from Paul Newman as ``Cool Hand Luke,'' ``what we (may) have here is a 
(not insignificant) failure to communicate.''
    Seen broadly, where are the resources, ideas, and contributions for 
this conversation?
     Federal Agencies (Appalachian Regional Commission; 
Departments; Federal Reserve
     Congress
     Governors and State Legislatures (including Office(s) of 
(Appalachia)
     Local Governments
     Private Sector (Financial Service Institutions, Investment 
Firms, Corporations, Individual Investors, especially Private Venture 
Capital Firms)
     Non-Governmental Organizations [for example, Ohio 
Appalachian Development Fund, Corporation for Ohio Appalachian 
Development]
     Philanthropic Sector:
         LGrantmaking Organizations (Corporate Foundations and 
        Giving Programs, Community Foundations, Private Independent and 
        Family Foundations)
         Local and Regional Community Foundations
         National/International Associations of Grantmakers 
        (Council on Foundations)
         LThe Forum of Regional Associations of Grantmakers, 
        especially New Ventures in Philanthropy
         LRegional Associations of Grantmakers (Council of 
        Southeastern Foundations, Atlanta and the Ohio Grantmakers 
        Forum, Columbus)
         LOthers including the Aspen Institute, Rural 
        Development and Community Foundations Initiative (RDCFI), 
        Community Strategies Group
         LThe Investment Fund for Foundations, Charlottesville 
        (TIFF)
    Consider three ideas for bringing these caregivers and investors 
together for a common conversation.
    First is a project to develop a marketing campaign complete with 
literature, web sites, speech material and so on focused on Ways to 
Give and Invest in Appalachia and, for those within the Region, Ways 
Appalachia Gives and Invests in Itself. Some themes, were alliteration 
to be important, could be wealth, work and wisdom...or investment, 
initiative and interest....or the more traditional, stewardship-
oriented time, treasure and talent. Possibilities for the ways to give 
and invest could include:
     Government investments
     Private investments
     Philanthropic grants and program-related investments
     Investments from foundation endowments and portfolios 
(asset allocations for community re-investing, venture capital)
     Region-focused or advised and directed funds in 
foundations
     Planned gifts (lead and remainder trusts, estate and gift 
planners, advisers, including the Planned Giving Design Center and 
other information sources)
     Newly-organized foundations (community foundations, family 
foundations)
     Citizenship, civic participation, leadership and 
ambassadorship
     Volunteer service (board service, advocacy; remaining true 
to roots as especially sons and daughters of the region staying home, 
coming home)
    Second is a pilot project in one sub-region, perhaps Appalachian 
Ohio, to develop and implement ways in which those inside and outside 
the region and those from the public, philanthropic and private sectors 
can better work together for the benefit of and increase their 
investment in the region.
    Third is a conference convened jointly by the public, philanthropic 
and private sectors and community sectors and charged with addressing 
these issues, building the relationships we need, and breaking new 
common and uncommon ground.
    Windows of opportunity like this don't happen often. 
    
    
   Statement of Daniel L. Neff, Executive Director, Ohio Mid-Eastern 
                        Governments Association
    Good Morning Mr. Chairman: Thank you for the opportunity to testify 
before the Committee on Environment and Public Works Subcommittee on 
Transportation and Infrastructure. I feel privileged to be given the 
time to talk about a program--the Appalachian Regional Commission 
(ARC)--which I believe has and continues to play a significant and 
meaningful role in the development and growth of one of our nation's 
most isolated and distressed regions.
    Having been involved with the ARC in different capacities for over 
16 years, I obviously come from a less than unbiased position about the 
virtues of the program. Yet I believe that this experience, which 
includes 4 years as your Alternate to the Commission, provides me with 
some perspective about ARC which few would have. As an aside, it would 
be remiss of me not to mention or to thank you Senator for the 
opportunity that I had to serve your administration when you were 
Governor. I have many fine memories of those years--especially in 
working with your Lt. Governor, Nancy Hollister.
    Under your leadership, a great deal was accomplished to improve the 
economy and quality of life for the citizens of Ohio including the 
residents of our 29 county Appalachian region of eastern and southern 
Ohio. While much of this region continues to face levels of poverty and 
economic and social distress that are above State and national 
averages, statistics that were often in double digits are now typically 
well below 10 percent . In particular, Jobs Bills I, II and III 
continue to positively impact the State's economy and overall fiscal 
well being. In Appalachia, the focus on developing rural industrial 
parks in Jobs Bill III has had a significant impact on the ability to 
attract new industry into the region. This, coupled with the resources 
of the First Frontier Program enable our communities to more 
successfully market these sites to the rest of the country and the 
world.
    Of course, it is my fervent belief that the ARC program is at the 
core of much of the progress that has been made in Ohio Appalachia. The 
``bottom up'' process of ARC funding coupled with the wide array of 
eligible activities that can receive assistance truly does make it an 
intergovernmental model that has not only proven to be extremely 
successful but I believe is worthy of emulation in other geographic 
areas of distress in the country. While the program's funding levels 
have never been very high (Ohio's non-highway ARC funding has averaged 
approximately between $4 to $4.5 million per year during the last 
decade), it has, nonetheless, been able to leverage significant amounts 
of other Federal, State, local and private sector support. Indeed, ARC 
requires some level of matching funds in virtually all of the projects 
in which it is involved. (ARC can fund up to 80 percent of a project in 
a Distressed County and no more than 50 percent of a project in a 
Transitional County. Ohio presently has 9 Distressed Counties and 19 
Transitional Counties. Clermont County is defined as a Competitive 
County and therefore eligible for no more than 30 percent of ARC 
funding for a given project.) This requirement has enabled a little bit 
of ARC money to go a long way.
    ARC policy provides each of the 13 Appalachian States and their 
governor a great deal of discretion in developing priorities and 
determining how ARC funding will actually be spent. Ohio, I believe, 
has one of the best systems in place to make those decisions. Through 
the direction of the Governor's Office of Appalachia (GOA) and its 
coordination with Ohio's 3 Local Development Districts (Buckeye Hills-
Hocking Valley Regional Development District in Marietta, the Ohio Mid-
Eastern Governments Association in Cambridge, and the Ohio Valley 
Regional Development Commission in Waverly) the spending of the vast 
majority of Ohio's ARC allocation is determined in large part through 
decision making at the local level. This is accomplished through the 
Board of Directors of each of the Local Development Districts (LDDs) 
which are primarily made up of elected local officials.. While the 
process varies with each LDD, each Board of Directors ultimately 
prioritizes its projects and submits them to GOA. At that point, the 
LDDs meet with GOA to determine the State's project funding priorities 
for a given Federal fiscal year.
    This structure helps to ``depoliticize'' the project selection 
process and makes it more objective in nature. It supports the logic 
that local officials know best as to what their needs and priorities 
are . With limited funding from ARC and other Federal and State 
sources, the process also takes advantage of LDD staff expertise in 
helping to coordinate the overall funding package of any given project. 
As a result, those projects which have most of the funding ``pieces'' 
in place and have been identified as priority projects for ARC 
consideration can be moved ahead in a timely fashion.
    The flexibility of ARC funding also compliments the locally driven 
decision making process of the program. The following 5 goals that were 
adopted by ARC provide an overall umbrella that is used to determine 
project eligibility:
     Goal one: Appalachian residents will have the skills and 
knowledge necessary to compete in the world economy in the 215' 
century.
     Goal two: Appalachian communities will have the physical 
infrastructure necessary for self-sustaining economic development and 
improved quality of life.
     Goal three: The people and organizations of Appalachia 
will have the vision and capacity to mobilize and work together for 
sustained economic progress and improvement of their communities.
     Goal four: Appalachian residents will have access to 
financial and technical resources to help build dynamic and self-
sustaining local economies.
     Goal five: Appalachian residents will have access to 
affordable, quality health care.
    As can be seen, many types of activities can be accomplished within 
the parameters offered by these goals. Again, it is then up to the 
States and the local and regional partners within each State to develop 
their strategies and ideas to ultimately determine what their funding 
priorities will be.
    While the ability to fund many types of projects is critical, it is 
also important to note that the administration of the ARC program by 
the agency's staff and the Federal Co-Chairman's office is not done in 
a manner that many would consider to be ``typical Washington 
bureaucracy.'' ARC has shown that it is a program that seeks to 
simplify rather than to complicate. It does not try to operate under a 
rigid or lengthy review and approval process that in many other 
programs tend to frustrate and confuse the applicant. Indeed, perhaps 
the most important thing that I can add in this regard is that 
ultimately ARC operates with a programmatic mindset that seeks to find 
ways to work with the States in order to get their priorities funded. 
It does not search for ways to turn applicants away.
    The flexibility of ARC can also be seen in the structure of the 
LDDs. These organizations were established through the Appalachian 
Development Act of 1965 as the ``local partner'' in the ARC 
intergovernmental model. At present, there are 71 LDDs covering 406 
counties within the 196,000 square miles that make up the 13 State 
Appalachian region. With administrative financial support from ARC, 
each LDD serve as a ``convener'' of local governments and organizations 
within the area that they serve. Each organization seeks to ``assess, 
plan, and facilitate action within their locality in efforts aimed 
toward achieving the quality of life enhancement goals of the ARC.''
    In addition, however, each LDD has its own particular role and 
function within the area that it serves. In Ohio our 3 LDDs are 
involved in numerous activities that seek to address economic and 
social concerns that impact the counties and communities that make up 
their district. These activities include the administration of 
Revolving Loan Fund programs for small to medium sized business. In 
Ohio Appalachia, ARC funds coupled with those from the Economic 
Development Administration has resulted in almost 150 loans totaling 
over $8 million which has brought about the creation of approximately 
1,600 jobs.
    Ohio's LDDs are also involved in international trade activities 
that seek to encourage business and industry in the region to become 
more involved with world markets. This not only involves direct 
counseling but also includes participation in various trade events and 
activities that help to benefit local companies. Buckeye Hills, OMEGA 
and OVRDC (Ohio's 3 LDDs) have each been designated an International 
Trade Assistance Center by Ohio's Small Business Development Center 
(SBDC) program.
    Another important function the LDDs have been involved with is 
supporting the development of intermodal transportation plans that 
would bring about increased economic development for our region. 
Various projects have involved highway and rail enhancements along with 
a project that would seek to better utilize the Ohio River for the 
shipment of products. This project has received ARC funding of over 
$50,000 and seeks to bring together public and private sector parties 
from Kentucky, Ohio, Pennsylvania and West Virginia to develop a 
regional marketing strategy that would attract industry that would 
benefit from using the Ohio River as a transportation corridor.
    Other activities that involve one or more of Ohio's 3 LDDs include: 
administration of the Ohio Public Works Commission programs, 
administration of an Area Agency on Aging program, participation in 
SBDC counseling for those interested in starting their own business, 
grantsmanship training and counseling for public agencies and non-
profit organizations, serving as a census and demographic affiliate for 
the Ohio Department of Development and providing GIS services to member 
governments and other interested parties.
    As can be seen, the LDDs play a varied but important role in each 
of the districts that they serve in Ohio Appalachia. With guidance and 
direction from their Board of Directors, each LDD seeks to fill gaps 
and voids in support and services that many of our communities in 
Appalachia need but simply do not have the financial or human capacity 
to accomplish.
    In conclusion, it is my hope that this testimony has helped to shed 
some light on important role that ARC plays in sustaining a unique but 
most needed local, State, and Federal partnership that means so much to 
many areas of this nation's Appalachian region. While it is not without 
wart or blemish, the program has a proud history of meaningful 
accomplishment throughout its 35-year history. It has proven to be an 
effective program that has been a worthwhile investment of public 
resources. However, while much has been accomplished, there is still 
much more that needs to be done to help improve the quality of life for 
much of the Appalachian region.
                               __________
     Statement of Joy Padgett, Director, Ohio Governor's Office of 
                               Appalachia
    Good morning, my name is Joy Padgett, Director of the Governor's 
Office of Appalachia (GOA).
    I appreciate the opportunity to testify before you as Governor Bob 
Taft's State Alternate. Governor Taft sends his regrets for not being 
able to attend personally; however, he had this entire week scheduled 
for almost a year.
    I would like to welcome you Chairman Voinovich and members of the 
Subcommittee to Appalachian Ohio. We appreciate that you chose 
Nelsonville to serve as the site for this hearing as it truly 
symbolizes the struggling communities in Appalachian Ohio that once 
were thriving, bustling centers of transportation, mining, 
manufacturing and industry. The resiliency of these communities is 
self-evident as local residents are learning that solutions to 
meaningful change must be initiated locally.
    In my testimony, I would like to focus on an overview of the 
Governor's Office of Appalachia, the socioeconomic status of the 
Appalachian Region of Ohio, and the cultural uniqueness that exists 
here.

              OVERVIEW OF GOVERNOR'S OFFICE OF APPALACHIA
    The Ohio General Assembly created the Governor's Office of 
Appalachia (GOA) in 1988. The mission of GOA as it always has been is 
to promote opportunities to achieve an improved quality of life for the 
people of the Appalachian Region of Ohio. I am very proud to have 
previous directors here who have mentored me throughout this past year.
    The GOA manages the Federal ARC dollars and State matching dollars. 
It serves as an advocate for the region by developing policy in 
conjunction with other State agencies and it promotes specific projects 
and proposals that originate from the region's residents.
    The State of Ohio can only be as strong as each of its counties. 
Realizing the validity of this statement, Governor Taft put forth a 
plan in conjunction with the ARC to further development opportunities. 
Some actions include:
     Encouraging a holistic approach in dealing with the 
distressed counties by asking each State department head to work with 
the GOA as they re-examine their missions in relation to the special 
needs of the distressed counties as well as across the Appalachian 
Region.
     Matching the Federal ARC dollars with State dollars. Sixty 
percent of the Ohio match is targeted to distressed and at-risk 
counties to further the ARC goals and to provide planning grants that 
are largely focused on distressed communities.
     Adding a Community Development Specialist to each of our 
Appalachian Regional offices. This will provide more hands on technical 
assistance for building community capacity.
     Encouraging philanthropic investment in the Appalachian 
region by providing a one million dollar challenge grant to the 
Appalachian Foundation. This is a dollar for dollar match grant.
     Appointing a Rural Revitalization Task Force that has 
completed its hearings and is working with the Governor's staff to 
develop a prioritized list of recommendations from throughout the 
region. This has been an excellent opportunity for folks to come 
together to identify regional issues and to offer solutions. A final 
report is due in September.
    Just as Dr. Jesse White described the unique partnership between 
the Federal Government and the 13 States, GOA accomplishes its mission 
through communication, cooperation and collaboration with the three 
Local Development Districts (LDDs), the three Governor's Regional 
Economic Representatives, the Ohio Department of Development and other 
State agencies to aid local efforts in the five ARC goal areas 
including: (1) Education (2) Physical Infrastructure (3) Community 
Capacity (4) Dynamic Local Economies, and (5) Health Care. 
Representative Nancy Hollister will describe in her testimony the 
history of ARC's involvement in Ohio since 1990 and discuss projects 
within each of the goal areas.
    I cannot stress enough the strong relationships and partnerships 
that have evolved into our T.E.A.M. approach of Together Everyone 
Accomplishes More.

                      OVERVIEW OF APPALACHIAN OHIO
    Due to our limited time today, I have attached a few documents 
describing Ohio's Appalachian region. The first is from Ohio's Fiscal 
Year 2001 State Strategy Statement detailing the socioeconomic status 
of the Appalachian region. The second provides a snapshot of the status 
of our distressed counties and the final document outlines Ohio's 
progress on the Appalachian Development Highway System.
    With a population of 1.5 million (based on 1998 population 
estimates), Appalachia Ohio represents only 13 percent of Ohio's total 
population of 11.3 million. The region, however, makes up one-third of 
the State's total geographic area. Of our 29 Appalachian counties 
stretching from Columbiana County in Northeastern Ohio to Clermont 
County in Southwestern Ohio, ten are considered distressed (Adams, 
Athens, Gallia, Jackson, Meigs, Monroe, Morgan, Pike, Scioto, and 
Vinton.) Six counties are considered at-risk of becoming distressed 
within the next year including Belmont, Guernsey, Harrison, Lawrence, 
Noble and Perry counties.

                          CULTURAL UNIQUENESS
    As Director of the GOA, my personal number one goal is to shatter 
the misguided perceptions that Appalachia as a region cannot thrive 
economically.
    A step back into the cultural history of Appalachian Ohio shows 
that during the late 1700's until the 1870's, migration through the 
Cumberland Gap into Southeastern Ohio occurred in small numbers of 
people that did not settle into towns or communities but on mountains 
and near streams, therefore there was not an early-on structured 
religious tradition or organized school system. This created a lack of 
generational knowledge of institutions which is still an influence 
particularly in communities where only a generation ago the coal 
companies controlled all structured activities including political, 
religious, health care, and educational activities. Only recently have 
remaining residents come to realize that decision-making requires their 
direct participation through visioning, leadership training, and 
community capacity building.
    Building civic capacity is even more important in those communities 
where industries have left and eroded the tax base. From 1999 through 
2001, we calculate that 5,667 direct jobs or 22 percent of the total 
manufacturing employment in ten of our 29 counties will be lost. Please 
refer to the ``Job Loss Chart'' at the back of your packets.
    Folks in many of these communities believe it is not even remotely 
possible to make life better. Often as I travel and listen, people are 
surprised when I respond that we have programs to teach them ``how to 
fish''. Recently, I met with five mayors from small communities on the 
Ohio River to talk about untapped opportunities. By 9:00 a.m. the next 
morning, two of them had called and are now ``rollin' on the river''. 
More will follow them.
    ARC is about hands-on facilitation. Many communities have 
difficulty with the 20 percent or more match. We are working creatively 
to make sure that the old adage of ``where there is a will, there is a 
way''. ARC provides the gap financing that leverages other resources. 
This financing often makes the difference as to whether a project is 
first doable, but secondly sustainable. Communities whose citizens have 
very high LMI (Low-to-Moderate Income) cannot afford operating and 
maintenance fees without significant up-front capitalization costs 
covered in the form of grants.
    Senator, these people really do understand your slogan of ``doing 
more with less''. Appalachian Ohio represents citizens who work hard 
and play fair and yet have missed the rewards of a vibrant economy.
    This may be the result of the extractive industries for which we 
are known . . . coal, oil and gas, and timber.
    The ARC is providing opportunities for putting back much of what 
has been extracted. It is not about giving away fish, but teaching 
citizens of character how to fish.
    The ARC five goal area structure assists communities who choose to 
do something about their problems. Later testimony will discuss the 
role of the Local Development Districts as they identify, assist, and 
trouble-shoot selected projects.
    Our additional State funds will enable us to fund projects this 
coming year that have had difficulty making it to the top due to lack 
of dollars. Examples would include Community Health Access Program 
(CHAPs) demonstration project targeted at screening of diseases such as 
diabetes, high blood pressure, and cholesterol. Another example is a 
full-scale Appalachian Community Learning Program (ACLP) for community 
capacity building.
    These are both high priority projects for me.

                               CONCLUSION
    My major complaint about the ARC and the LDDs is that they refuse 
to claim their bragging rights. The good stories haven't been told 
nearly enough about the positive differences in so many places. I agree 
with Yogi Berra who said, ``If you did it, it ain't braggin'!!! ''The 
ARC has done a great amount of good for a great amount of people over a 
great amount of time. It is important that the unique relationships and 
partnerships that have been created continue.
    Thank you, Senator Voinovich and others for the opportunity to tell 
the story.
                               __________
   Statement of Richard J. Platt of Alliance 2000, Steubenville, Ohio
    First of all. Welcome, Chairman Voinovich and distinguished 
committee members, to Appalachian Ohio. I will truly be brief because 
the point I wish to make is a simple one. It's been said by others, and 
I'll repeat, there is unfinished business in Appalachian Ohio. The 
Appalachian Regional Commission has helped us but the work here is not 
done.
    I was asked to speak about the role of the Appalachian Regional 
Commission in developing an industrial park project. I am the director 
of a small, private non-profit development firm serving Jefferson 
County, Ohio.
    In Jefferson County, in 1997, officials of one of our existing 
distribution-related businesses came to us seeking sites for a more 
than doubling of its existing warehouse space. It employed over 100 
people here. When the CEO came to see what we were calling our 
Industrial Park, all we could show him was an open field. The water and 
sewer was not there. The only road was a narrow county road not ready 
for heavy trucks. We had just secured funding commitments for 
installing public improvements, but we were still months short of 
starting construction. Our industrial park was ``unfinished.''
    If he was to build his large warehouse there, he had to take our 
word on it.
    He didn't. It's understandable. Not too many businesses can be 
expected to make multimillion dollar decisions based on an economic 
development guy's sales pitch or the county commissioners' promise to 
bring water and sewer to its site. Instead, the firm moved to a 
competing industrial site in Weirton, West Virginia where two years 
earlier funding helped to get that counties' open field "finished" and 
truly prepared for development. It was ARC funding that got that West 
Virginia Industrial Park ready to go.
    This story isn't sour grapes though. It's a story that illustrates 
the difference between a community where the ARC funding was involved 
and one where it wasn't.
    Today, with ARC, funding which helped to leverage other Federal and 
State funding, we have an industrial park of our own--93 acres with 
water, sewer, three-phase power, and widened roads. The park is 1.5 
miles off of four-lane US Route 22 with no stop lights for the 35 miles 
east to Pittsburgh International Airport. Our park's infrastructure was 
completed late last year, a spec building completed this Spring, and a 
flex space building expected to start construction next year. We hope 
to accept our first permanent tenant soon.
    ARC's $300,000 grant for public infrastructure improvements was 
matched by Economic Development Administration (EDA) funding 
($926,000), State of Ohio grant money ($500,000) and local funding too 
($500,000). That 12 percent funding was the difference between a Park 
that was unfinished and one that was finished--truly ready to go. We 
are now equipped to retain our existing businesses while seeking to 
attract businesses that want to access markets from our location.
    Additionally, the Ohio Mid-Eastern Governments Association, the 
local development district that supports Jefferson County and others in 
Eastern Ohio, was a useful provider of grant support and advice. The 
Governor's Office of Appalachia was there to help pull it together too. 
Now that it's complete, ARC funding is helping us market the Park too.
    The completion of the Park, though, does not mean we are finished. 
And I think our story in Eastern Ohio is true in many other parts of 
Appalachia too. We have more important work to get done.
    Thanks in part to ARC, there are now industrial parks dotting most 
of Eastern Ohio's counties between Columbus and Pittsburgh. When you 
widen the view from our one county to a twelve-county corridor between 
Pittsburgh and Columbus, you see though, that the dots aren't 
connected.
    There are five key projects that need to be completed. Please see 
the exhibit map.
    The highways that link Pittsburgh and Columbus, chiefly US Routes 
22 and 36, need to be connected. One project is just 12 miles between 
Coshocton and Dresden and the other is 28 miles connecting US36 and 
US22 between Newcomerstown and Cadiz. These two projects would connect 
many of the ARC-funded industrial parks to a viable corridor.
    Other modes of transportation remain critical as well. The Ohio-
owned Panhandle railroad line which once ran between Pittsburgh and 
Columbus is doing well again. It needs to be ``finished,'' though, by 
reconnecting Cambridge and points South to the line at Newcomerstown. 
We need to assist in refurbishing the best connection the Panhandle 
makes to the Ohio River where the Warrenton River Terminal provides a 
way to get Ohio-made goods on to the River and to global ports of 
entry.
    Five key projects--16 miles at Coshocton, 28 miles at 
Newcomerstown, 20 miles of railroad at Cambridge, 15 miles of railroad 
at Rayland, and an upgraded Warrenton River Terminal--are central to 
finishing some of the unfinished business of Appalachian Ohio.
    Of the twelve counties on this three-State, Pittsburgh-Columbus 
Corridor, ten are Appalachian counties. Connecting the dots in 
Appalachia. That's what its about. And its no different in Appalachia 
than elsewhere.
    In Columbus, the $127 million Franklinton Floodwall has been a 
mostly federally-funded project. It gets Federal funding on the premise 
that it will help economic development for the residents of a part of 
Columbus. The projects I've mentioned benefit economic development for 
a whole region.
    In Cleveland, they want $4 billion in mostly Federal funds to 
finish their airport and gain access to International flights. We need 
considerably less than that to connect Eastern Ohio with daily direct 
flights to London, Frankfurt, and Paris out of Pittsburgh International 
Airport. The projects I've mentioned will do that.
    We don't begrudge Columbus or Cleveland or cities where Federal 
funds have helped to make them more competitive. In Appalachia, funding 
flows a different way. That's all. We get it through ARC. ARC's work is 
not done because their remains unfinished business in Appalachian Ohio.
    Thank you.
                               __________
 Statement of Bob Proud, Clermont County Commissioner and Chairman of 
        the Ohio Valley Regional Development Commission (OVRDC)
    Good morning, my name is Bob Proud, Clermont County Commissioner 
and Chairman of the Ohio Valley Regional Development Commission, 
(OVRDC). As chairman of the OVRDC, I appreciate the opportunity to 
address you Senator Voinovich and the members of the Subcommittee on 
Transportation and Infrastructure of the Committee on Environment and 
Public Works. OVRDC is one of Ohio's three Local Development districts 
(LDD's) representing southern Ohio, which includes eleven ARC eligible 
and twelve EDA eligible member counties with a total population of 
646,000 (1999 estimate). Our district also includes six ARC-designated 
distressed counties: Adams, Gallia, Jackson, Pike, Scioto and Vinton, 
with a combined population of 216,311 (1999 estimate). The 1995 median 
annual household income for the OVRDC region is $27,972 and for some of 
our distressed counties this figure is as low as $23,000. This compares 
to a 1995 median annual household income for Ohio of $35,022. (For more 
detailed socio-economic data on the region, see Attachment I OVRDC 
Counties profile).
    OVRDC, as a Local Development District, plays a crucial role in 
developing successful ARC projects in our region. The planning and 
project development process is very much a ``bottoms up'' grass roots 
planning process. Annually, each of our counties has a county caucus 
meeting, whose membership includes local elected officials, 
commissioners, and key non-profit and economic development groups. Each 
caucus decides on its priority development needs and projects for the 
year. These top county projects are then reviewed and ranked by OVRDC's 
Project Review Committee and ratified by the Executive Committee in 
order to develop a regional project package to submit to the Ohio 
Governors Office of Appalachia (GOA). OVRDC and the other two Ohio 
LDD's then meet with the GOA and the Governors regional development 
representatives to compile the annual Ohio ARC Project Package. OVRDC 
staff then assist local projects listed in the State package in 
completing their ARC applications.
    ARC's distressed county program and grant investments in OVRDC's 
distressed counties have done much to improve the infrastructure and 
quality of life for many residents in the region, bringing safe 
drinking water and eliminating ground water pollution. ARC investments 
in Pike County, for instance, have enabled over fifty miles of water 
lines to be extended to many rural residents, who had no reliable 
access to safe drinking water. The story is the same in our other 
distressed counties, such as Adams and Vinton, where hundreds now 
receive reliable public water who didn't previously. ARC grant funds 
more recently have enabled many financially strapped villages to 
improve or construct new wastewater treatment systems and correct 
potentially serious ground water contamination problems. We have 
several villages, such as Centerville in Gallia County and Beaver in 
Pike County, who with ARC assistance are in the process of building 
wastewater projects.
    Summarizing the overall figures for ARC distressed county grants 
for the OVRDC region for the last four years (1996-1999) will give some 
idea of the significant impact that this assistance has had on 
improving the quality of life of our region's residents. During this 
period, ARC grants to OVRDC distressed counties amounted to $5,476,992 
for water and sewer infrastructure improvements. These ARC grants 
leveraged over $27,692,000 in other funds to make possible new water 
and wastewater services for 2622 residents, who did not previously have 
them.
    For instance, a Lucasville sewer extension grant in Scioto County 
of $200,000 leveraged an additional $375,000 that brought wastewater 
service to 90 new households. (For a further breakdown of distressed 
county grants and basic information on five recent projects, please see 
Table I attached)
    The regions economic development problems will be further 
exasperated by the recent announcement by the United States Enrichment 
Corporation (USEC) that they will close the Piketon uranium enrichment 
plant in June 2001. This proposed closure would terminate approximately 
1500 highly skilled jobs. Additional Federal assistance will be needed 
in the near future to help the region plan and adapt to the potential 
severe economic impact, especially in the distressed counties of 
Jackson, Pike, and Scioto.
    The situation is better in our five other ARC counties, (four 
transitional and one competitive) due to continued population and 
economic growth over the last ten years, including new plants and 
expansions.
    Five of OVRDC's fastest growing counties are those counties closest 
to the growing metropolitan areas of Cincinnati and Columbus and served 
by limited access highways built in part through ARC assistance. These 
are Adams, Brown, and Clermont counties served by S.R. 32 from 
Cincinnati and Pike and Ross counties served by U.S. 23 from Columbus. 
The availability of limited access highways has provided a very 
important foundation for their growth. Jackson County, which also has 
good highway access, has shown significant growth in population and in 
business expansions.
    ARC grant assistance has been critical in providing the necessary 
infrastructure improvements to support these new industries and 
expansions in our non-distressed counties. Key expansion projects 
include: the Wards Corner access road, supporting the location of a new 
International Paper facility in Clermont County; (600 jobs), the Mount 
Orab new water tower in Brown County supporting an expansion of the 
Cincinnati Milacron plant; the new water treatment plant in 
Chillicothe, supporting the expansion of Kenworth Truck and the Jackson 
access road that supported an expansion of Merilatt Industries and a 
new McCarty facility. Recent plant closures in Lawrence County have 
created a greater need for ARC assistance to develop a major new 
industrial park in the coming year to help the community recover.
    ARC grant funds have supported infrastructure for industrial 
expansion in some of our distressed counties as well. Recent projects 
include: the New Boston (Scioto County) rail spur which supported Osco 
Industries new plant; (100 new jobs), infrastructure to the new Gallia 
County industrial park, which has so far created 58 new jobs and 
infrastructure to the Zahns Corner industrial park in Pike County, 
which has so far created 100 new jobs. Without this crucial ARC grant 
assistance, most of these projects would probably never have developed 
because our communities do not have the financial resources to replace 
these lost grant funds. A summary of all the region's ARC area 
development grants over the last four years shows that they 
collectively created over 2,100 new jobs and retained over 1600 jobs, 
and that they leveraged from 3 to 7 dollars in other funds for these 
projects. (For a summary of recent area development projects and 
information on five selected projects, see attached Table II).
    Since a well trained labor force is critical for development, 
improvement of the region's education and training system has been a 
consistent OVRDC, as well as ARC goal. Over the last ten years, several 
ARC education/training projects have been approved, which have allowed 
our colleges and vocational schools to modernize their equipment to 
provide more state-of-the-art training in electronics, computers, auto 
mechanics and other areas, such as distance learning.
    One of OVRDC's recent significant education projects is the 1996 
ARC grant of $146,015 to the U.S. Grant Career Center in Clermont 
county. This grant assisted in the development of an audio-video 
interactive conference center and a 25-station computer lab in the 
school's new wing. The computer lab has been a vital resource for basic 
skills remediation for students needing to pass the Ohio 9th grade 
proficiency test, allowing them to progress at their own speed with 
customized software.
    The Keith W. Boys Conference Center has already brought several 
videoconference training sessions to students, as well as area 
residents. OVRDC has used the school as a site for several video 
training conferences sponsored by ARC and the Development District 
Association of Appalachia (DDAA). On May 19, 2000, OVRDC used the 
Conference Center as one of four United States sites (three Appalachian 
Development Districts and ARC Washington) in an international video 
conference that connected two sites in Northern Ireland. The conference 
included community and economic development professionals in both 
countries, who shared background information and insights on 
development needs and activities. In addition, Clermont County 
businesses such as Cincinnati Milacron, U.S. Precision Lens and Spirit 
of America National Bank have used the facility. (For more information 
on this grant see the attached ARC Project Profile).
    An additional resource provided by OVRDC in order to help address 
the need for more accessible equity capital for small business 
development in the region is our ARC revolving loan fund. This loan 
fund was originally established and has been recapitalized by ARC grant 
funds. During the 14 years that our loan fund has operated, OVRDC has 
made 24 loans totaling $1,623,089. These loans have enabled local 
businesses to expand and create 138 total new jobs and retain 859 jobs. 
One example of a recent loan is a $50,000 loan to Greenfield Products, 
which enabled them to purchase equipment and expand their operation and 
thereby add 23 new jobs. (Please see Table III for summary information 
regarding these 24 loans).
    OVRDC also offers several other services that assist in the 
development of southern Ohio, including: administration of the regions 
Ohio Public Works Commission infrastructure assistance program, the 
provision of export assistance to the regions businesses, assistance in 
developing Economic Development Administration projects, and assistance 
in planning and securing financing for other priority projects. (For 
more information on OVRDC and the types of assistance offered, see 
Attachment II, OVRDC Summary of Services).

                     KEY NEEDS FOR THE OVRDC REGION
    Even though ARC investments over the last couple of decades have 
had a significant impact on the region, the region still lags behind in 
having the basic infrastructure, developed industrial sites, the 
community capacity, and the business assistance capacity to compete 
successfully with the rest of the nation.
    In closing, I would like to outline some key needs for which 
continued Appalachian Regional Commission assistance is needed.
    1. ARC assistance and Federal Highway Trust Funds are needed to 
complete the limited access Appalachian Highway Corridors B and C 
through southern Ohio (limited access from Columbus to the Ironton 
area).
    2. Funding for industrial park development and infrastructure.
    3. Funding for the planning and development of business incubator 
facilities and services.
    4. Assistance in increasing the region's access to equity and 
venture capital for new business start-ups and expansions.
    5. Funding is still needed for poor communities to be able to 
extend safe and reliable drinking water to many residents.
    6. Funds are needed to assist small communities build new 
wastewater treatment systems or to upgrade seriously inadequate 
systems.
    7. Since many communities do not have the financial resources to 
even assess their basic infrastructure needs, OVRDC urges that ARC set 
aside planning funds for grants to distressed counties and communities 
to undertake such feasibility studies.
    8. Assistance and funds are needed to improve the basic electronic 
infrastructure to the region, as well as improve the region's access to 
the Internet and video conferencing and distance learning.
    9. It is recommended that the current 30 percent set-aside in ARC's 
budget for distressed counties be increased because of the extent of 
the need.
    OVRDC and I would like to thank you Senator Voinovich and the 
members of the Subcommittee on Transportation and Infrastructure for 
giving us the opportunity to discuss the importance of recent and 
continued ARC assistance to the southern Ohio area.

                    Table I.--OVRDC Region Overview of ARC Distressed County Projects 1996-99
                                  Combined Statistics for All Projects By Year
----------------------------------------------------------------------------------------------------------------
                                                                                                      Estimated
                                                                             Funds        Total      No. of  New
                         Fiscal Year                           ARC Funds   Leveraged  Project Cost    Residents
                                                                                                       Served
----------------------------------------------------------------------------------------------------------------
1996........................................................  $1,644,749  $8,273,669    $9,918,418           180
1997........................................................   1,193,620   5,206,710     6,400,330           410
1998........................................................   1,164,603   4,610,100     5,774,703          1286
1999........................................................   1,474,020   9,602,200    11,076,220           846
----------------------------------------------------------------------------------------------------------------

                                         Statistics on Selected Projects
----------------------------------------------------------------------------------------------------------------
                                                                          Linear                Funds     Fiscal
                      Project Name                         No. Served      Feet   ARC Funds   Leveraged    Year
----------------------------------------------------------------------------------------------------------------
Pike Lake Road Waterline...............................   25 households   10,500   $136,000      $34,000    1998
Walls Road Waterline...................................   25 households   10,300     67,200       16,800    1997
Lucasville Phase 4 Sewer...............................   90 households   11,000    200,000      375,000    1997
West Ports. Phase 7 WWT................................   290 customers   26,000    200,000    1,017,000    1996
County Road 8 Waterline................................   52 households   25,000    200,000       52,150    1997
----------------------------------------------------------------------------------------------------------------

                    Table II.--OVRDC Region Overview of ARC Area Development Projects 1996-99
                                  Combined Statistics for All Projects By Year
----------------------------------------------------------------------------------------------------------------
                                                                                        Other $
                           Fiscal Year                               Jobs     Jobs    Leveraged/   Cost/  ARC  $/
                                                                   Created  Retained     ARC $      Job     Job
----------------------------------------------------------------------------------------------------------------
1996.............................................................     1018      904          7      4409     546
1997.............................................................       25        0          3     28000    8000
1998.............................................................      905        0          4      4277     839
1999.............................................................      190      730          3      3645     982
----------------------------------------------------------------------------------------------------------------

                                         Statistics on Selected Projects
----------------------------------------------------------------------------------------------------------------
                                            Jobs      Jobs                    Funds          Private      Fiscal
              Project Name                Created   Retained  ARC Funds     Leveraged      Investment      Year
----------------------------------------------------------------------------------------------------------------
Zahn's Corner Ind. Park.................      100        n/a   $400,000      $1,960,694                     1998
Gallia County Ind. Park.................       58        n/a    250,000       1,930,000                     1996
New Boston Ind. Park Rail...............      100        224    300,000         199,000     $15,000,000     1996
Wards Corner Access Road................      693        367    250,000         785,000      67,500,000     1996
S. R. 93 Alt. Ind. Park.................      420        n/a    132,200         794,320         975,000     1998
----------------------------------------------------------------------------------------------------------------

  Table III.--OVRDC Region Overview of ARC Revolving Loan Fund Projects
                                1986-2000
        OVRDC ARC RLF History, Combined Statistics for All Loans
------------------------------------------------------------------------

------------------------------------------------------------------------
Number of Loans........................................               24
                                                        ----------------
  Total RLF Dollars Loaned.............................    $1,623,089.20
Jobs Created...........................................              138
Jobs Retained..........................................              859
Private Funds Leveraged................................    $5,143,545.00
RLF Dollars Per Job....................................        $1,627.97
------------------------------------------------------------------------

             Projects Receiving ARC Loans by Business Status
------------------------------------------------------------------------
                      Types                         Number      Percent
------------------------------------------------------------------------
Startups........................................          8         24%
Retention.......................................          2          10
Expansions......................................         14          66
                                                 -----------------------
    Total.......................................         24        100%
------------------------------------------------------------------------

             Businesses Receiving ARC Loans by Business Type
------------------------------------------------------------------------
                      Types                         Number      Percent
------------------------------------------------------------------------
Industrial......................................          7         41%
Commercial......................................          8          28
Service.........................................          9          31
                                                 -----------------------
    Total.......................................         24        100%
------------------------------------------------------------------------

                          ARC PROJECT PROFILE
    Grantee: U.S. Grant Career Center, Clermont County
    Use of funds: Video Conference Equipment and Computers
    ARC Funds = $146,015 (FY 1996)
    State of Ohio = $106,491
    Applicant = $102,464
    Total = $354,970

    Grant Career Center's Keith W. Boys Business and Industry 
Conference Center serves Clermont County as well as Brown and Adams 
Counties. The purpose of the facility is to bring educational 
instruction for both high school and adult students and business, 
industry, and government in the following areas: management, human 
resources, customer service and sales training, communications, small 
business and financial planning, entrepreneurship, and employability. 
This system enables full access to the information highway through an 
interactive audio, video, and data network in Clermont County and 
surrounding Western Ohio Appalachian counties.
    The Grant Career Center satellite down-linked audio-video 
conference center and 25 station computer resource lab help in 
remediation for students needing to pass the 9th grade proficiency test 
with customized software training. The conference center and computer 
lab are linked to share information. Educational access opportunities 
have been maximized with great success for students and business.
    Listed below are users/uses (not inclusive) of the video conference 
center.
    Ohio School Net--Video Conference
    Bethel-Tate High School Employees--Computer Training
    United Way--System Use
    HUD Meeting, Congressman Rob Portman
    OVRDC Interactive Video Conference with Congressman Rob Portman and 
ARC Co-chairman Jesse White in Washington D.C. and vocational students 
from the region
    Clermont County Sheriff's Department--Staff Computer Training
    Clermont County Educational Service Center--System Use
    U.S. Precision Lens--Video Conferences
    Ohio Supreme Court Justice Evelyn Stratton--Video Conference and 
Grant Social Studies Students
    Interactive Video Conference with Fernald Plant, Grant, and 
Anderson High School Students as experiments were done and discussed.
    Interactive Video Conference with Newport Aquarium and approx. 75 
other schools in Ohio regarding the ``Jason Project''.
    OVRDC Video Conference with Northern Ireland.
    
    
                         Introducing the OVRDC
    The Ohio Valley Regional Development Commission is a public 
regional planning and economic development agency that coordinates 
Federal, State and local resources to encourage development in twelve 
southern Ohio counties: Adams, Brown, Clermont, Fayette, Gallia, 
Highland, Jackson, Lawrence, Pike, Ross, Scioto and Vinton.
    Established in 1967 as a not-for-profit corporation, the OVRDC was 
designated by the State of Ohio in 1977 as a Regional Planning and 
Development Organization. The OVRDC also serves as a Local Development 
District for the Appalachian Regional Commission and as an Economic 
Development District for the U.S. Department of Commerce, Economic 
Development Administration.
    The OVRDC is governed by a Full Commission of more than 150 
officials who meet semi-annually. Members include representatives of 
county and local governments, social service and educational 
organizations, minorities and the private sector. Membership in each 
county is referred to as a County Caucus. This Caucus serves as the 
forum for local project planning.
    Routine oversight of the OVRDC is provided by an Executive 
Committee with representation from all twelve OVRDC counties; 
Portsmouth and Chillicothe; and the business/education/minority 
community. The Executive Committee's monthly meetings are open to the 
public.
    The OVRDC receives financial support from a combination of Federal 
and State grants and local service contracts. Member counties also pay 
annual contributions to the OVRDC, with contributions based on each 
county's population.
    This attachment briefly summarizes the services offered by the 
OVRDC.
                                 ______
                                 
                    Development Planning Assistance
    The OVRDC helps localities plan and secure funding for development-
related projects such as construction, repair or upgrade of roads, 
bridges and water and sewer lines, industrial park development, as well 
as projects related to community services, education and workforce 
development. Staff offer expertise in dealing with the following 
funding sources:
     Appalachian Regional Commission.--The ARC is a multi-state 
commission, which fosters development in Appalachia. Eleven of the 
OVRDC's twelve counties (all but Fayette) lie within the Appalachian 
region. ARC funding can assist with a wide variety of project 
activities in the areas of education, infrastructure, civic leadership, 
local economies and health. As a Local Development District, the OVRDC 
provides guidance in the application process, assistance in project 
packaging and in securing funding and participates in assembling the 
State of Ohio's ARC investment package.
     Economic Development Administration.--A part of the U.S. 
Department of Commerce, the EDA provides funding for job-creation 
projects in distressed areas around the nation. Assistance can also be 
provided to communities with plant closures and to industries affected 
negatively by international trade. The OVRDC is a designated Economic 
Development District, serving as a liaison between the EDA and eligible 
applicants in the district, and assists with EDA projects.
    The OVRDC submits a Comprehensive Economic Development Strategy 
(CEDS) annually to the EDA. This CEDS assesses the district's strengths 
and weaknesses and identifies short- and long-term development 
priorities. Any potential project seeking EDA assistance must be 
identified as a priority in the CEDS in order to receive funding 
consideration.
     Ohio Public Works Commission.--The OVRDC coordinates this 
state-level grant/loan program, (also known as the State Issue 2 
program), for the District 15 Public Works Integrating Committee (all 
OVRDC counties except Clermont). Eligible projects include the 
construction, repair or replacement of roads, bridges and water and 
wastewater infrastructure. The OVRDC also coordinates the Local 
Transportation Improvement Program, which funds eligible road 
improvement projects using proceeds from the State gasoline tax.
     Community Development Block Grant Program.--OVRDC staff 
can provide financial packaging assistance with projects involving 
Community Development Block Grant funding. Examples of eligible 
projects include, but are not limited to, the development or upgrade of 
local parks and community centers; sewer, water and road projects that 
protect public health and safety or create jobs; downtown 
revitalization; or the acquisition of fire and rescue facilities and 
equipment. For an administrative fee, OVRDC staff can help subdivisions 
develop and administer CDBG program applications.
     USDA Rural Development.--OVRDC signed a Partnership 
Agreement with the State Rural Development office in 1998. OVRDC staff 
can assist local communities and organizations in better utilizing the 
Rural Development grant and loan programs, including community 
facility, water and sewer and business assistance programs.
     Other Infrastructure Planning Assistance.--OVRDC staff can 
also advise subdivisions that wish to apply to other infrastructure 
funding sources such as the Ohio Water Development Authority and the 
Ohio Department of Development. Assistance with other funding sources 
may also be available; contact the OVRDC office for more information.

                       SMALL BUSINESS ASSISTANCE
     Low Interest Financing.--The OVRDC offers two low-interest 
Revolving Loan Fund programs to provide gap financing for small 
businesses seeking to start up or expand in the district. The two RLFs, 
capitalized by the ARC and EDA, support private businesses that create 
or retain jobs. The OVRDC also helps small businesses find other 
sources of capital for their start-up or expansion needs.
     Marketing Assistance.--The OVRDC provides marketing 
assistance to small and mid-sized businesses in the district, helping 
them grow in both domestic and international markets. Participating 
companies receive regular trade opportunity notices and assistance in 
developing export markets for their products. OVRDC staff can also help 
companies analyze their export-readiness and marketing strategies.
     Other Entrepreneurial Assistance.--Thanks to an ARC 
Entrepreneurial grant, OVRDC staff will offer mini grants and business 
counseling and other critical assistance for new or expanding 
businesses. Such assistance for new businesses includes legal, 
financial, marketing and engineering related assistance.

                            DATA AND MAPPING
    As a regional data center affiliated with the Ohio Department of 
Development's Office of Strategic Research, the OVRDC maintains a 
comprehensive data base of national and State economic and demographic 
statistics, including U.S. Census information. Frequently requested 
data are compiled in easy-to-use profiles for each member county and 
for the entire district. In addition, the OVRDC maintains a data base 
on available industrial and commercial sites and buildings in the 
district.
    These data resources and the agency's geographic computer mapping 
services are available to communities, businesses and the general 
public upon request. A reasonable processing fee may be charged.

                           STRATEGIC PLANNING
    The OVRDC offers its strategic planning expertise to member 
counties and communities. Staff can meet with local leaders to explain 
the strategic planning process and how to adapt it to a community's 
needs.
    The OVRDC released its revised Strategic Plan in 1997 to guide the 
district's development efforts over the next 5 years. The agency 
routinely incorporates plan elements into its work programs and seeks 
to make the plan a responsive document that reflects the district's 
ever-changing opportunities and challenges.

                        INTERGOVERNMENTAL REVIEW
    The OVRDC is a designated Areawide Clearinghouse in Ohio's 
Intergovernmental Review Process. The OVRDC coordinates a preliminary 
review of most applications requesting Federal funds. The review is 
intended to ensure that projects will not duplicate existing services 
or facilities and that those who might be affected have the opportunity 
to offer their input on a proposal. The OVRDC's Executive Committee 
serves as the review committee.

                        TRANSPORTATION PLANNING
    The OVRDC began the process of major highway corridor 
transportation planning in 1998. The agency participated in the U.S. 23 
corridor study and has assisted in the U.S. 35 corridor study. Various 
corridor maps, plans and data are available for a fee upon request. 
OVRDC will continue to offer planning and implementation support to the 
corridor committee and other priority projects.

                     DEVELOPMENT LAND USE ANALYSIS
    Using the resources available in the agency's Geographic 
Information System and local knowledge, staff will perform an analysis 
of the land's physical suitability to support various types of 
development. The end product of such an analysis is a development 
potential map: areas are classified into several categories of 
suitability for different types of development based primarily on 
physical characteristics of the land. The suitability analysis and 
greenway planning services are offered on a contractual basis.

                   HOW DO PROJECTS BECOME PRIORITIES?
    OVRDC staff are ready to assist you with questions regarding 
potential local projects. All local projects are presented to the local 
county caucus annually in order to be prioritized by the county caucus. 
OVRDC's Regional Project Review Committee then meets annually to review 
the priority county projects and to approve a regional project package. 
These projects are ranked objectively based on their urgency of need, 
readiness, economic impact and other factors.
                               __________
  Statement of Jesse L. White, Jr., Federal Co-Chairman, Appalachian 
                          Regional Commission
    Mr. Chairman. Thank you for the opportunity to appear before the 
Subcommittee to discuss the work of the Appalachian Regional Commission 
and to share with you our story of having worked with the Congress to 
turn around and revitalize this agency. I'm particularly pleased that 
you have chosen to hold this hearing in the heart of Appalachia. 
Southeast Ohio shows both the tremendous payoffs of prior ARC 
investments and the continuing need for the Commission's assistance--
assistance that can help create self-sustaining local economies among a 
proud and resilient people who are struggling to accommodate the 
sweeping changes spawned by technological innovation and globalization.
    This hearing affords us a chance to review how ARC's programs 
respond to the economic development challenges facing rural communities 
and small towns in Ohio and across Appalachia. We hope it will also lay 
the groundwork for ARC's reauthorization early in the next Congress.

                              ARC OVERVIEW
    Congress established the ARC in 1965 to bring roughly 400 counties 
in the 13-State Appalachian Region into the mainstream of the American 
economy, to make these 22 million people and their hundreds of 
communities contributors to, rather than drains on, the national 
resources. Through its flexible programs, ARC helps equip communities 
with the basic building blocks of economic development: a trained and 
educated workforce, basic infrastructure, local leadership and civic 
capacity, entrepreneurial local economies, and access to health care.
    The Commission represents a unique partnership between the Federal 
Government and the 13 States we serve. The Federal Co-Chairman of ARC--
appointed by the President and confirmed by the Senate--has one half of 
the votes on the commission and the 13 governors have the other half. 
No policy can be set or any money spent unless the Federal 
representative and the governors reach agreement. The ARC model 
represents neither the dictation of policy from Washington nor the 
abdication of policy to the States; rather, it is a joint policymaking 
model that yields true collaboration.
    The ARC story is one of substantial progress in giving Appalachia a 
full seat at the table of America prosperity. When we were created in 
the 1960s, 219 of our counties were economically distressed. Today that 
number has been cut roughly in half. Other indicators also show marked 
improvement: the infant mortality rate has been cut by two-thirds; the 
regional poverty rate has been cut in half; the per capita income gap 
between Appalachia and the U.S. has been narrowed; the percentage of 
adults with a high school education has doubled; and the percentage of 
Appalachian students completing high school now is slightly above the 
national average.
    In more concrete terms, more than 840,000 Appalachians now have 
access to clean water and sanitation facilities through ARC grants; a 
network of more than 400 ARC-funded primary care health facilities has 
been completed; and ARC grants to revolving loan funds have assisted 
1,234 small businesses in creating over 24,000 new jobs and saving 
28,000 existing jobs. From any perspective, then, ARC's impact in 
Appalachia has been substantial.

                      REVITALIZATION OF THE AGENCY
    I am pleased to represent a President whose commitment to 
Appalachia and to ARC has been unwavering. The Clinton-Gore 
Administration has requested unprecedented levels of funding for the 
Commission's highway and non-highway programs. And the Congress, on a 
bipartisan basis, has responded by providing record funding for our 
highway system and strong support for our non-highway work. This same 
bipartisanship marked the 1998 reauthorization of ARC, the first in 
almost 20 years.
    I am proud to say that we the ARC family of Federal, State, and 
local partners, with great support from the Congress have reformed and 
revitalized the Commission. For example, in 1994 we made the decision, 
with your support as one of our Governors, to mark our 30th 
anniversary, not by having a celebration, but by taking a long, hard 
look at the region and at ourselves.
    We spent a full year engaged in a strategic planning process for 
the Commission because we knew that the region and the world itself had 
changed profoundly in the past thirty years. We did not hire a 
consulting firm to do this plan; we did it ourselves, convening four 
interstate town meetings, listening to focus groups, commissioning 
research, holding consultations with experts, and hammering out a 
shared vision among the Federal, State, and local partners.
    The result of this planning effort was a new vision and mission for 
the ARC. We agreed that we must invest in five essential building 
blocks of economic development for Appalachia, and they are set forth 
in our five goals statements. All ARC projects must clearly advance at 
least one of these goals:
    Goal 1. Appalachian residents will have the skills and knowledge 
necessary to compete in the world economy in the 21st 
century.
    Goal 2. Appalachian communities will have the physical 
infrastructure necessary for self-sustaining economic development and 
improved quality of life.
    GoaL 3. The people and organizations of Appalachia will have the 
vision and capacity to mobilize and work together for sustained 
economic progress and improvement of their communities.
    Goal 4. Appalachian residents will have access to financial and 
technical resources to help build dynamic and self-sustaining local 
economies.
    Goal 5. Appalachian residents will have access to affordable, 
quality health care.
    In addition, the Commission launched special regional initiatives 
with dedicated multi-year funding. These initiatives address challenges 
which span the region and which can benefit from interstate approaches 
to solving problems and capitalizing on opportunities. These 
initiatives have emphasized telecommunications, export promotion, 
leadership development, and entrepreneurship. All have yielded 
impressive results.
    In our 1998 reauthorization, Congress recognized the effectiveness 
of these revitalization efforts, incorporating a number of our internal 
reforms into our statute and, under the leadership of this Committee, 
giving us our first full-fledged reauthorization in almost 20 years. 
Taken together our own reforms and those reflected in our 
reauthorization have enabled the agency to renew its commitment to the 
Region and better seek to complete its job.

                          DISTRESSED COUNTIES
    Just as impressive as these reforms have been to our program, 
however, has been the commitment of the Commission to target our 
resources to the areas of greatest need . . . to our distressed 
counties. The Commission targets its resources in two fundamental ways: 
first, it sets aside funds for use exclusively in economically 
distressed counties; second, it restricts funding in counties that are 
performing at or near national economic norms.
    Currently the Commission reserves 30 percent of its project dollars 
for use solely in the counties that are classified as economically 
distressed. In effect, States with no or few distressed counties 
voluntarily agree to allocate more resources to the distressed counties 
in other Appalachian States. While these funds can be used only in 
distressed counties, States may also use other ARC funds in the 
distressed counties. And they are doing so. During the past three 
fiscal years, States have consistently exceeded the 30 percent set-
aside, spending about half of their total project funds on programs 
that benefit distressed counties. This means that about 50 percent of 
ARC project funds are being spent on programs to benefit the 11 percent 
of Appalachia's population living in distressed counties.
    It should be noted, as well, that our definition of distress is a 
rigorous one. To qualify as distressed, a county must have unemployment 
and poverty rates that are at least 150 percent of the national 
averages and a per capita market income that is no more than two-thirds 
of the national average. These are clearly counties struggling with 
long-term, systemic economic difficulties.
    Mr. Chairman, I think it also important to point out that many of 
Appalachia's counties, while not formally classified as distressed, are 
only a plant-closing away from becoming distressed. Their economies 
remain fragile, often lacking diversification. We informally refer to 
them as ``at risk.'' Our States spend a significant portion of their 
funds on these counties as well.
    At the other end of the economic spectrum are our counties that are 
performing at national averages on key economic indicators. Generally, 
those counties are precluded from receiving ARC project funds. They 
have no need for ARC's special assistance. In addition, counties that 
are approaching national economic norms are limited in the amount of 
project funding that they may get from ARC.
    Taken together, the set aside for distressed counties and the 
limitations on funding projects in economically strong counties ensure 
that ARC's limited dollars go where the needs are greatest. We at the 
ARC have worked very hard on this targeting policy; and I am proud to 
say that there has never been a negative vote on these policies from a 
Federal Co-Chairman or from any of the States, some of whom are net 
``losers'' in this allocation procedure. All have been willing to help 
the neediest of our counties.
    Earlier this year the Appalachian Governors and I launched a 
regional outreach effort to craft an enhanced program for our 
distressed counties. This initiative follows an extensive review of 
ARC's existing policies and programs in distressed counties. To date we 
have had focus groups or town meetings in five of our States--including 
a tri-state town meeting in Ironton last month--and two other States 
plan to hold listening sessions later this month.
    These meetings are designed to identify new strategies to help 
Appalachia's poorest communities become more competitive. While money 
is of course one of the issues, this process attempts to discover ways 
to achieve greater results within distressed counties with existing ARC 
dollars. At its October meeting in West Virginia, the Commission is 
expected to review a proposed strategic plan for distressed counties 
and make recommendations on how to implement the plan. We will keep 
your Committee informed as we create this enhanced program for 
distressed counties.

                   ECONOMIC CONDITIONS IN APPALACHIA
    As our focus on distressed counties suggests, despite robust 
economic growth nationally, some communities have yet to share fully in 
the nation's unprecedented prosperity. Too many rural areas--many of 
them here in Southeast Ohio--still remain cut off by terrain and by 
history from the broad economic currents that are raising American 
standards of living.
    Almost a fourth of the region's counties can be classified as 
economically distressed, suffering the debilitating effects of 
persistently high unemployment, low per capita income, and widespread 
poverty.
    Structural changes in declining sectors such as coal mining, 
manufacturing, textiles, and agriculture--exacerbated by globalization 
and technological change--have hit Appalachia disproportionately hard, 
threatening to reverse the modest economic gains that many communities 
have made. A culture of economic dependency continues to impede the 
drive toward entrepreneurial innovation and risk-taking that is 
reshaping so much of the national economy, while a widening digital 
divide threatens to leave Appalachia's residents disconnected from the 
educational and e-commerce opportunities created by the technology 
revolution.
    These trends are particularly evident in Southeastern Ohio, where 9 
of the State's 29 counties are classified as economically distressed. 
Indeed, while much of the rest of the region has been moving forward, a 
combination of plant and mine closings and depressed agriculture prices 
has hit Appalachian Ohio hard. For example, six counties entered 
distressed status during the mid-1990s, as Ohio's counties have fallen 
further behind on national indicators.

                                HIGHWAYS
    From ARC's inception, highways have been central to the economic 
development of Appalachia. A region unconnected to the transportation 
grid of the nation cannot possibly participate fully in its economy. 
Because the interstate system had bypassed much of Appalachia, Congress 
authorized the Appalachian Development Highway System (ADHS), the only 
major highway system created primarily to foster economic development.
    The ADHS consists of 3,025 miles, reaching across all 13 of our 
States. At the end of FY 1999, 81.2 percent of these miles were open to 
traffic or under construction. In Ohio, there are 201 miles authorized 
for ADHS construction, of which 161 are open to traffic. Changes 
adopted by the Commission in 1999, in response to the request of the 
State of Ohio, shifted mileage along Corridor C, creating a new 
Corridor C1. This will enable the ADHS to better meet the traffic needs 
of this part of Ohio. At the same time, the Commission's action 
reaffirmed that the planned Portsmouth Bypass remains a part of the 
system, linking central Ohio with Kentucky, Virginia, and North 
Carolina.
    TEA-21 for the first time authorized funding for the ADHS out of 
the Highway Trust Fund, authorizing $450 million per year for work on 
the System. With this increased funding our States are making major 
progress toward completing the System. But we are also encountering 
some of the most difficult terrain, which results in higher 
construction costs. When it comes time for your Committee to write the 
next multi-year highway bill, we hope you will continue to provide 
substantial funding from the Highway Trust Fund, accelerating the day 
that the entire system will be completed. At current funding levels 
based on our last cost to complete estimate--the entire system could be 
completed in a little less than two decades.
    Two years ago we commissioned a study of the economic impact of the 
ADHS--the first full-scale, rigorous assessment of the effectiveness of 
the system in contributing to economic growth. Conducted by Wilbur 
Smith Associates, a leading transportation consulting firm, the study 
examined 12 of our 26 corridors, focusing on those corridors that are 
largely complete and therefore should be contributing to job creation 
in the region.
    The results are both dramatic and reassuring:
     Creating jobs.--The report estimated that the 12 corridors 
had produced a net increase of 16,000 jobs by 1995 and projected a net 
increase of 42,000 new jobs by 2015. These jobs would not have been 
created without the ADHS. Only a portion of these were construction 
jobs attributable to the actual building of the corridors.
     Generating economic benefits.--The report estimated that 
the total economic impact of the completed work on the 12 ADHS 
corridors at $5.48 billion from 1965-2005, without considering direct 
construction benefits. When construction benefits are included, the 
total impact rises to $6.9 billion over the same period. Each $1 of 
Federal investment will yield $1.32 in economic impact benefits.
     Making travel easier, safer, and more cost-effective.--The 
ADHS highway corridors are expected to produce travel efficiencies 
nationwide valued at $4.89 billion over the 1965-2025 period.

                            AREA DEVELOPMENT
    While a network of modern highways is essential to Appalachia's 
economic growth, highways by themselves are not sufficient to enable 
many of the region's communities to prosper. Through a flexible 
approach that embraces basic infrastructure, jobs skills training, 
local leadership development, small business assistance, and improved 
health care, ARC offers Appalachia's communities the tools to create 
self-sustaining local economies. Through the years, including your 
tenure as Governor, Ohio has tapped the full range of these options. 
Ohio has been one of a handful of States to emphasize the use of ARC 
funds for jobs skills training and education.
    ARC spends about two-thirds of its annual nonhighway budget on 
infrastructure and public works projects in the region. These typically 
include water and sewer systems, industrial parks, access roads, and 
business incubators.
    We recently released the results of an outside evaluation of ARC's 
infrastructure projects. Examining a representative sample of projects, 
the study shows that these projects are creating more jobs than 
anticipated and are spurring significant economic activity across the 
region. Roughly three-fourths of the sampled projects with specific 
business or job-related goals either met or exceeded their projections.
    The local impact of these ARC projects is dramatic: in 45 of the 65 
counties for which measures could be developed, the report found that 
ARC infrastructure investments created jobs equaling at least 10 
percent of all net employment growth in the counties between 1990 and 
1996.
    Other findings include the following:
     Private investment.--The ARC projects have leveraged a 
total private sector investment of $3.075 billion, in a ratio of almost 
$107 to every dollar invested by ARC. When an unusually large project 
in the study is excluded from the analysis, the private sector 
investment is $1.675 billion, with a ratio of $58 to $1.
     Wages.--The total $32.4 million in ARC support has led to 
$576.9 million of new wages annually for the jobs created by the 
projects. This has led to a net expansion of $950.3 million of personal 
income.
     Tax revenue.--Each year the ARC projects are yielding 
$14.3 million of State income tax revenue, $13.9 million of State and 
local sales tax revenue, and $29.2 million in local property tax 
revenue. The annual property tax revenue alone almost equals the entire 
amount of the ARC investment.

                        ``BOTTOMS UP'' APPROACH
    The secret to much of the success that this study documents can be 
found in the effectiveness of the region's 71 local development 
districts (LDDs), multi-county economic development planning agencies 
that work with local governments, non-profit organizations and the 
private sector to determine local economic development needs and 
priorities. For many communities, these LDDs are the principal source 
of professional guidance in crafting and implementing local economic 
development strategies. They are literally the first stop on a 
community's path to economic self-sufficiency.
    Appalachian Ohio is served by three excellent LDDs--the Ohio Valley 
Regional Development Commission, the Buckeye Hills Regional Development 
District, and the Ohio Mid-East Governments Association. These local 
groups, whose boards contain local elected officials and private sector 
representatives, are responsible for developing most of the projects 
that are submitted to ARC. This local orientation creates a genuine 
``bottoms up'' approach that is the hallmark of ARC.

                    NEW MARKETS AND ENTREPRENEURSHIP
    Appalachia's future economic vitality depends in large measure upon 
nurturing homegrown firms--businesses that create jobs, increase local 
wealth, and ultimately reduce the region's need for outside subsidies. 
Unfortunately, due to Appalachia's longstanding dependence on 
extractive industries and branch plant manufacturing, the culture of 
entrepreneurship in the region is neither broad nor deep, and research 
findings suggest that there are many gaps in the infrastructure needed 
to support entrepreneurship.
    Responding to these conditions, in 1998 the Commission launched a 
multi-year, $15 million initiative to build entrepreneurial economies 
across Appalachia. The initiative has focused on four essential 
components in building sustainable entrepreneurial economies:
     Entrepreneurial education and training
     Technical and managerial assistance to new and expanding 
businesses
     Developing entrepreneurial networks and sectors
     Improving access to debt and equity capital
    To guide its investments, ARC has relied upon working groups 
composed of regional practitioners, State partners, private sector 
investors, Federal agencies, and foundations.
    Some of the most exciting entrepreneurship work is taking place 
right here in Southeastern Ohio. The Appalachian Ohio Development Fund, 
a venture capital fund targeted to the needs of small businesses in 
this part of Ohio, is a creative response to the call for equity 
financing options. ACENet, led by June Holley, has earned a national 
reputation for its specialty foods incubator, benefitting both small 
businesses and agricultural producers in the Athens County area. And 
Junior Achievement, which has an active presence in Ohio, offers one of 
the premier programs for entrepreneurial education in our high schools.
    So far our Entrepreneurship Initiative has funded 133 projects. The 
25 projects that have been completed reported the creation of 198 new 
businesses and creation or retention of 539 jobs. The 108 on-going 
programs are projected to create 342 new businesses and create or 
retain 2,951 jobs.
    ARC's entrepreneurship work complements the President's New Markets 
Initiative, which passed the House with a strong bipartisan majority 
late last month, and which we hope the Senate will consider in 
September. The first stop on the President's New Markets tour last 
summer was Appalachian Kentucky. Taken together, the New Markets 
Initiative and our Entrepreneurship Initiative can provide scores of 
Appalachian communities and businesses with new opportunities for 
private investment and locally based growth.

                       ADVOCACY AND COLLABORATION
    From its creation, ARC's unique Federal-State partnership has had a 
mandate to be an advocate for the region. It has offered a platform for 
galvanizing other Federal, State, and private sector efforts to move 
the region into the nation's economic mainstream. ARC works closely 
with other Federal agencies to avoid duplication while helping ensure 
that these other Federal programs respond effectively to the particular 
challenges that Appalachian communities face. It also seeks to leverage 
investment in the region by non-profit organizations and the private 
sector. Some recent activities suggest the scope of this work.
     Transportation Summit.--Building on their traditional 
highway partnership, ARC and the Department of Transportation last year 
jointly sponsored a regional summit on intermodal transportation and 
laid the groundwork for 10 ARC intermodal grants, including a joint 
Ohio-West Virginia-Kentucky project to capitalize on the potential of 
the Ohio River.
     EPA Brownfields.--In July ARC and EPA entered into a 
memorandum of agreement designed to give Appalachia's communities a 
greater role in EPA's brownfields program. We are hoping this 
collaboration, which includes technical assistance workshops for local 
officials, will result in more brownfields cleanup funds flowing into 
our region.
     Kellogg Foundation.--ARC and the W.K. Kellogg Foundation 
have teamed up for an unprecedented collaboration to harness technology 
in promoting community and economic development. Focused on Northwest 
Pennsylvania and Southeastern Ohio, in June this partnership resulted 
in Kellogg grants of $200,000 each to two community teams from those 
States. This money likely would not have gone to Appalachia if ARC had 
not taken the lead in promoting the region.
     First Union Bank.--First Union Bank has been a key private 
sector participant in our entrepreneurship work. As a result of this 
involvement, last year First Union committed $5 million for small 
business lending and investment in Appalachia, and this year they will 
commit additional dollars for venture capital funds serving Appalachia.
     Diabetes Outreach.--To help lower the risk of diabetes in 
Appalachia, which suffers from a disproportionately high incidence of 
diabetes, and reduce the likelihood of long-term complications of those 
already afflicted by this disease, the ARC and the Centers for Disease 
Control will collaborate on an educational outreach initiative. This 
pilot project will help local health educators conduct a range of 
diabetes prevention and control outreach programs.
    Mr. Chairman, these activities suggest the broad mandate that ARC 
has to address the needs of Appalachia. The economic challenges facing 
Appalachia are difficult; they require a multi-faceted, comprehensive 
approach. With its renewed commitment to the region's most distressed 
areas, augmented by a special focus on entrepreneurship and private 
sector investment, ARC is positioned to help Appalachia's communities 
participate fully in the American economy of the 21st 
century. We look forward to working with you and the Committee in 
accomplishing this task.
                                 ______
                                 
       Statement of Wayne F. White, Ohio Appalachian Center for 
                            Higher Education
    Good Morning!
    I'm Wayne White with the Ohio Appalachian Center for Higher 
Education, often referred to as OACHE. OACHE is a consortium of ten 
public colleges and universities serving the Ohio Appalachian region 
with a mission to increase the college-going rate.
    This mission closely correlates with the first listed goal of ARC's 
Strategic Plan--``Appalachian residents will have the skills and 
knowledge necessary to compete in the world economy in the 21st 
Century.'' The catalyst for the formation of OACHE was a comment from 
famous restaurateur and then-member of the Ohio Board of Regents Bob 
Evans. In 1990 he commented to Dr. Clive Veri, President of Shawnee 
State University that the college presidents in the 29 county Ohio 
Appalachian region needed to do something about our children not 
participating in college.
    Acting on that comment, the college presidents, Ohio legislators, 
the Chancellor of the Board of Regents and Bob Evans met to discuss the 
problem. From these discussions came funding for a study that would 
accurately determine the college-going rate and, importantly, identify 
the barriers to participation in post secondary education. The results 
of that research have become known as the Access and Success study.
    As we all know, Appalachians are proud, patriotic, hardworking, 
honest individuals. However, these attributes are not sufficient for 
Appalachians to fully participate in the current economic growth our 
country is experiencing. In today's fast-paced and technology-driven 
economy, advanced skills and a lifelong commitment to training are 
essential to secure and keep a meaningful, living-wage job. As Bob 
Evans so eloquently puts it, ``The days are gone when hard work alone 
will get you there.'' To help our citizens free themselves from the 
vicious cycle of poverty, unemployment and underemployment, we must 
address the issue of educational attainment. To that end, the Access 
and Success study forces us to reflect on some disturbing facts:
    The college-going rate in Ohio Appalachia was estimated at 30 
percent compared to the State average of 41 percent and the national 
average of 62 percent . Barriers delineated in the study include:
    1. Poverty
    2. Lack of role models (only 8.8 percent of Ohio Appalachian adults 
over age 25 have a 4-year college degree compared to nearly 23 percent 
nationally).
    3. Lack of knowledge about college, including cost. (When asked to 
estimate the cost of college the subjects responded with figures twice 
as high as the actual cost.)
    4. Availability of living-wage blue-collar jobs in the past that 
did not require high educational attainment.
    5. But the primary barrier to college participation by Appalachians 
and probably others living in impoverished areas in our country is low 
self-esteem. Our students have academic ability--they just don't know 
it! Only 29 percent of seniors rate themselves above average compared 
to 58 percent nationally. (These figures correspond closely to the 
college going rate of 30 percent for the region and 60 percent for the 
nation.)
    The low levels of educational attainment in Ohio Appalachia are 
linked to the region's chronic and severe economic distress. The trend 
in living-wage employment over the last several decades has turned away 
from blue-collar jobs and toward higher-skill jobs, especially those 
involving technology. Unfortunately, a high percentage of those Ohio 
Appalachian students who are not college-bound lack the advanced skills 
required by today's increasingly technology-oriented employers.
    Not surprisingly, unemployment in Ohio Appalachia is higher than 
for the State as a whole. Virtually the entire area suffers from 
unemployment rates well above the State (4.1 percent) and national 
averages (4.0 percent for both, as of June 2000). All nine Ohio 
counties with the highest unemployment in June 2000 were Appalachian 
counties, and four reported unemployment rates at or over 10 percent.
    Unemployment figures along under-represent the extent of economic 
hardship truly experienced in the region. Virtually all the region's 
net job growth over the last two decades has occurred in the services 
and retail-trade sectors of the economy; these jobs typically pay low 
wages and/or are part-time positions offering few or no benefits. 
Therefore, major declines in unemployment during economic recovery 
periods of the 1980s and 1990s have not led to comparable reductions in 
economic distress. Instead they have merely increased the number of 
working poor. According to 1995 poverty estimates, Ohio Appalachia is 
now poorer than it was two decades ago.
    For Ohio Appalachia, which lags behind the rest of the State in all 
economic and educational indices, it is clear that increased access to 
affordable higher education is a critical precondition to breaking the 
cycle of poverty, unemployment and underemployment that plagues the 
region.
    The socioeconomic picture is no better in other parts of the 13-
State Appalachian region. A recent New York Times article run on July 
27, 2000 noted that, ``with the national economy bubbling along, 
soaking up workers and spreading wealth, . . . much of Appalachia live 
not only with poverty and unemployment but also with the humiliation of 
being taken for ignorant.'' This article notes that low educational 
attainment not only impacts the individual but also represents a huge 
reservoir of potential workforce talent that is tragically going to 
waste.
    The article also points out that social programs born in the 1960s 
focused on supporting the needy at subsistence levels, making laudable 
efforts to feed, clothe, nurse and shelter the destitute and 
disenfranchised in what is otherwise the richest nation on earth. But 
critics say these programs have also, in many cases, institutionalized 
illiteracy, dependency on welfare and a low standard of living.
    Bob Evans would be quick to tell you that in his 82 years he has 
seen many different development and social initiatives come and go. Yet 
the fact is, few have ever really worked. When things don't work, Bob 
would say, you pull out the directions. And the directions say we need 
to provide people with education, and to help them take advantage of 
that education we need to help them overcome the barriers they face in 
getting that education.
    In an effort to address such challenges the OACHE was established 
by the Ohio General Assembly in 1993 with just that approach in mind. 
The OACHE immediately began addressing the Access and Success barriers 
through programs in member institutions and, on a competitive basis, in 
partner public schools. The results have been better than perhaps 
anyone envisioned.
    Using the Access and Success study as the guide, schools were 
invited to submit to the OACHE Board of Directors a proposal of how 
they could best address the barriers with a $10,000 project. To date, 
79 projects have been sponsored and they have averaged increasing the 
rate 20 percent the first year and 34 percent the first two years 
combined. Let me mention the impact of a few partner school projects, 
all of which are administered by unpaid coordinators at the local level 
(an ``*'' indicates a funded year).
    Newcomerstown High School was one of the first partner school 
projects funded by the OACHE. Before the grant Newcomerstown's college-
going rate was 28 percent .

    Newcomerstown 28% -45%* -56%* -72%* -56%* -58% -80%

    Vocational schools have historically had an even lower college 
participation rate. Swiss Hills, in distressed Monroe County, has 
proven such does not need to be case.

    Swiss Hills Vocational 21% -17% -31% -28% -51%* -57%*

    And Southern Local along the Ohio River in distressed Meigs County 
is now exceeding the State and national average.

    Southern (Meigs) 61% -59% -58% -73% -84%* -82%*-89%*

    Portsmouth East is a good example of a partner school achieving 
immediate results.

    Portsmouth East 35% -39% -33% -29% -55%* -70%*

    Perhaps Bob Evans, in an article published by ARC in its Appalachia 
magazine, best summed up the results of these projects. Bob said, ``I 
can't believe all this has happened. I never thought that just a few 
years we could encourage so many Ohio Appalachians to go to college.''
    In addition to sponsoring very successful partner school projects, 
OACHE has parlayed its State funds into additional dollars to address 
low educational attainment in the region. The ARC has been one of many 
public, private and not-for-profit partners in the OACHE's efforts:
    1. With two ARC grants totaling $126,400, the OACHE leveraged 
additional grant funds from Ameritech, the Honeywell Foundation, GTE 
and the Ohio Board of Regents to plan and pursue implementation of a 
compressed-video network linking OACHE member institutions across the 
29-county region. These additional grants total nearly $582,000, more 
than 4.5 times the original ARC investment. I am pleased to report 
that, with ARC as the catalyst and with the efforts of the presidents 
of the member institutions and OACHE staff, this project has come to 
fruition; this unique multi-institutional network will be operational 
in the fall 2000 academic year to increase access to higher education 
across the region.
    2. In 1994 OACHE successfully competed for an Educational 
Opportunity Center. (A U.S. Department of Education TRIO program) This 
program provides assistance to low-income first generation adults in 
their desire to enter or reenter college.
    3. With support from the Thomas L. Conlan Educational Foundation, 
Ameritech, and other partners, OACHE recently won a five-year, 
$2,060,000 Federal GEAR UP grant.
    4. Something that is very exciting is the decision of the Community 
Colleges of Appalachia to promote OACHE-like centers. The first such 
center, the North Central Appalachian Center for Higher Education 
(NCACHE) at Bluefield State College, opened in fall 1998. And yes, the 
ARC financially supports these projects.
    5. Following the success of the NCACHE, the ARC again stepped up to 
create more OACHE-like centers throughout the rest of the 13-State 
region. In February 2000, the governors of the 13 States, led by 
Governors Taft and Underwood, voted to replicate the OACHE model with 
the use of challenge grants. The OACHE and NCACHE have worked closely 
with the ARC to establish the new program and choose the first 
grantees, which will open their doors in fall 2000.
    The ARC has demonstrated its commitment to Ohio Appalachia in other 
ways besides its two grants to the OACHE. ARC Federal Co-Chairman Jesse 
White addressed the OACHE's Second Annual Conference in 1995, and 
subsequently informed us that the OACHE had inspired him to stress the 
importance of education in the ARC Strategic Plan; as you may know, 
education is the #1-listed goal in the plan.
    Since that time we've also been honored to have Cari Morningstar 
and Jack Russell address our OACHE Conferences. And the Governor's 
Office of Appalachia, Ohio's liaison between the ARC and the Governor 
of Ohio, has been an integral partner with the OACHE in conferences and 
other initiatives for many years.
    I would like to add that the highest-ranking educator in the free 
world, U.S. Secretary of Education Richard Riley, traveled to 
Portsmouth to address the fifth annual conference. His personal 
participation was so uplifting to educators, and more importantly, to 
students of the region. It brought a loud and clear message, that 
children who happen to live in property poor areas are important too!
    In closing, the OACHE strongly supports the ARC as a vital player 
in the socioeconomic development of Ohio Appalachia. Like the OACHE, 
the ARC's efforts go beyond providing for subsistence needs to building 
capacity that will enable our citizens to help themselves. As you have 
seen from my testimony and that of my fine colleagues who are here 
before you today, the needs in Ohio Appalachia are numerous and 
daunting. As a region and State, we certainly could not have 
accomplished what we have without the resources that the ARC has 
invested in our people and infrastructure. But much more remains to be 
done. As the ARC Federal Co-Chairman himself has said, we look forward 
to the day when the ARC will no longer be needed, but that day is not 
yet in sight. Until then, we have a challenging and important job ahead 
of us. The continued partnership of the ARC will be instrumental in 
helping us reach that point.
    Senator Voinovich, I would like to thank you, your staff, and your 
colleagues for conducting this hearing and for providing me an 
opportunity to inform you of the OACHE, on behalf of the presidents of 
the ten colleges that comprise the OACHE consortium, the many educators 
who work so diligently to assist students along a path that will lead 
them from poverty, but I want to thank you especially for the children 
of the region.
                               __________
                                 Hidden Valley Ranch, Inc.,
                                        Bidwell, Ohio, May 6, 2000.

Mr. Wayne F. White, Executive Director,
Ohio Appalachian Center for Higher Education,
c/o Shawnee State University,
Portsmouth, Ohio.

    Dear Mr. White: The continued success of the Ohio Appalachian 
Center for Higher Education (OACHE) and programs like it is the only 
hope I see to help Appalachians and other poor rural areas out of 
poverty. During my lifetime, I have observed many attempts to initiate 
economic development and thus a better quality of life for our 
residents but few have proven successful! The fact is that we now need 
to address the extremely low level of educational attainment before we 
can find a path that leads to economic development for impoverished 
areas.
    I have followed the tremendous success of OACHE and Ohio 
Appalachian partner schools increasing the college-going rate an 
average of 20 percent the first year and 34 percent during the first 
two years. In addition, I was pleased to learn that a pilot project in 
West Virginia, sponsored by the North Central Appalachian Center for 
Higher Education (NCACHE), increased the college-going rate over 50 
percent in one year. Now this is the way to fight poverty!
    I'll always have a warm spot in may heart for West Virginia. My 
grandfather died young and left a large family. My father, who had only 
been able to attend public school four years, enrolled in Rio Grande 
College at age 17 for six weeks then passed the examination to qualify 
as a teacher. He could not get a teaching job in Ohio; however, he was 
employed to teach in Bud, WV, where he was able to provide much-needed 
money for his widowed mother. That's the kind of people who live in 
West Virginia! One just doesn't forget good deeds like this.
    Based on the success of the OACHE and NCACHE partner schools, I 
have decided that I want to help place the West Virginia project on 
solid funding. Although I have not been solicited, please accept this 
donation and place it in a foundation at Bluefield State College for 
NCACHE to sponsor $10,000 OACHE-model partner school projects. As part 
of this contribution I would like the following:
    (1) Have these OACHE Model programs administered by Ms. Sarita 
Gattuso with oversight by Mr. Wayne White. I have seen the way these 
two individuals provide guidance and motivate educators to assist 
students in overcoming barriers to college. Having talented, 
experienced individuals who are dedicated and understand the challenges 
of disadvantaged students is critical to the success of the program.
    (2) I suggest the Board of Directors include the President of 
Bluefield State College, the Governor of West Virginia or his/her 
representative, a school teacher, a guidance counselor and a school 
administrator.
    Once I receive verification that sufficient funding has been 
secured to operate and administer the West Virginia center for a 
minimum of three years, NCACHE is free to award these dollars to 
partner schools in West Virginia using the normal OACHE/NCACHE 
competitive process. If such verification is not confirmed my 
expectation would be to have the donation returned to me in full.
    It is my hope that a National Center also be established at 
Bluefield State College so students in other areas of this country can 
have an opportunity to reach their potential. I am confident funders 
from foundations, business, industry, individuals and government will 
also be interested in giving students in high-poverty areas an 
opportunity to succeed.
    Unfortunately, children from these areas have been told for too 
long that they are somewhat less intelligent and a lot less motivated. 
Although these children do face additional barriers which result in 
low-educational attainment, OACHE has clearly demonstrated these 
barriers can be overcome.
    I am so please to see our kids have a chance to succeed. They are 
proud, hard-working, honest individuals and they too deserve a chance 
to participate in the economic growth our country is experiencing.
            Sincerely,
                                                 Bob Evans.
    ARC's mission is to be an advocate for and partner with the people 
of Appalachia to create opportunities for self-sustaining economic 
development and improved quality of life.
    Goal 1.--Appalachian residents will have the skills and knowledge 
necessary to compete in the world economy in the 21st 
century.
    Goal 2.--Appalachian communities will have the physical 
infrastructure necessary for self-sustaining economic development and 
improved quality of life.
    Goal 3.--The people and organizations of Appalachia will have the 
vision and capacity to mobilize and work together for sustained 
economic progress and improvement of their communities.
    Goal 4.--Appalachian residents will have access to financial and 
technical resources to help build dynamic and self-sustaining local 
economies.
    Goal 5.--Appalachian residents will have access to affordable, 
quality health care.

      Table 1.--Ratio of Total Results per Public Dollar for Non-Residential Economic  Development Projects
----------------------------------------------------------------------------------------------------------------
                                            Project impact        Ratio per ARC dollar   Ratio per public dollar
----------------------------------------------------------------------------------------------------------------
Total Private Investment.............  $3.075 billion.........  107:1..................  29:1
Jobs:
  New Jobs: Direct...................  23,377.................  $1,222/job.............  $4,574/job
  New Jobs: Total....................  44,331.................  $ 645/job..............  $2,412/job
                                      --------------------------------------------------------------------------
    Total New and Retained Jobs......  60,178.................  $ 470/job..............  $1,761/job
Income:
  From New Jobs: Direct..............  $ 577 million..........  20:1...................  5.4:1
  From New Jobs: Total...............  $ 950 million..........  33:1...................  8.9:1
----------------------------------------------------------------------------------------------------------------
Note: All ratios are based on non-residential project funding: ARC $28.6 million, total public $106.9 million;
  see text for important limitations on interpretations of these ratios

                               __________
  Statement of Roger W. McCauley, Executive Director, Corporation for 
                  Ohio Appalachian Development (COAD)
    Dear Chairman Voinovich and Members of the Committee: I am pleased 
to submit this written testimony to your Committee on the Appalachian 
Regional Commission. The Corporation for Ohio Appalachian Development 
(COAD) is private, non-profit community-based organization serving 
rural, mostly Appalachian, counties in eastern and southern Ohio. It is 
comprised of seventeen Community Action Agencies that serve a 30-county 
service area. COAD's mission is to provide a unified voice and 
representation for its member agencies and the constituencies that they 
serve, primarily low-income families, children and the elderly.
    Throughout its 29-year history, COAD and its member agencies and 
the communities they serve, have benefited from the resources and 
assistance provided by the Appalachian Regional Commission. Let me site 
you two recent examples:

                           PROJECT GOOD START
    The Appalachian Regional Commission supported Project Good START 
(Small Town Assessment and Readiness Techniques), from December 1996 
through January 1998, with a modest $52,800 grant under the ARC 
Regional Initiatives Program. Project Good Start set into motion events 
that are still reaping rewards today. As Congress had intended, ARC 
funds acted as a catalyst for Federal agency programming and financial 
support that continues to this day.
    Project Good START, as part of the Ohio Rural Enterprise Project, 
is currently funded by the U.S. Department of Agriculture's Rural 
Development. After five years of operation, the program has provided 
community strategic planning and economic development support in forty 
communities throughout rural Ohio, with twenty of those communities in 
Appalachian Ohio. (See attached map of Project Good START communities 
in Appalachia Ohio.)
    During the eighteen months of ARC funding, Project Good START 
worked in eight communities. For example, in nearby Glouster and 
Albany, both in Athens County, each community is benefiting from the 
activities (community-wide surveys, goal setting, and small business 
support groups) that were undertaken nearly three years ago. Both of 
these villages now have community festivals that grew out of food or 
crop industries that have enjoyed success in these supportive community 
environments. The festivals literally grew from the need of new 
entrepreneurs to bring focus and recognition to their products. In 
Glouster the community supported the newly relocated, but local, Frog 
Ranch Salsa Company, and the Good START Committee helped to form a 
community festival committee with the support and encouragement of Frog 
Ranch Salsa. The result is the first Ohio Chili Pepper Festival.
    In Albany, on the other side of Athens County, a similar 
circumstance has supported the development of an unusual crop, the 
native pawpaw fruit. Local entrepreneur Chris Chmiel has developed a 
thriving pawpaw business that is not only a nursery to propagate the 
distribution of the fruit tree, but also develops and sells numerous 
products from the fruit. Chris became a member of the Good START 
Committee in Albany, now known as the Albany Business and Community 
Development Committee, and encouraged the community support of a Pawpaw 
Festival. The first year was a great success, even attracting outside 
interest from Beffer Homes and Gardens Magazine, and the Washington 
Post. The Good START process in Albany also sparked the development of 
a local Chamber of Commerce.
    The communities that have participated in the Good START process 
constantly refer to the effort as a catalyst'' for renewal, as an 
``organizing'' influence, and as a ``road map'' for community-based 
improvement activities.

                     APPALACHIAN LEADERSHIP ACADEMY
    The Appalachian Leadership Academy (ALA) is a hands-on training 
program to help prepare middle management employees for leadership 
positions within their agencies and communities. ALA's curriculum 
provides leadership and skill building opportunities to professionals 
in local governments and non-profit organizations throughout Ohio's 
Appalachian region. The Academy's goals are:
     Build leadership skills and organizational capacity within 
institutions that serve the region,
     Equip the region's future leaders with the skills 
necessary to guide Ohio Appalachia through change and into the future,
     Motivate future leaders to think strategically about the 
region,
     Deepen the knowledge and understanding of the history, 
opportunities, resources, strengths, and challenges of the Appalachian 
Ohio region.
    The Academy received initial funding from the Appalachian Regional 
Commission during its research and design phase. Working in 
collaboration with the Institute for Local Government Administration 
and Rural Development at Ohio University, the Academy's curriculum and 
program content were developed based on surveys and information from 
agency directors and local government officials. The curriculum is 
based on five core competencies including self-knowledge, visioning, 
human resource management, effective communication and effective 
management. The curriculum is delivered through interactive II learning 
sessions, small group work, individual class work and 
homeworkassignments, site visits, teambuilding exercises, lectures, 
mentoring and individual or group projects during the 12-month program.
    The Appalachian Regional Commission also provided second year 
funding to support the implementation of the Academy's program to the 
charter class of 36 mid-level managers of community action agencies. 
This first class is scheduled to graduate later this month.
    As a result of the initial 2-year funding from the Appalachian 
Regional Commission which ends this fall, COAD has been able to 
leverage other Federal and State funds for on-going support. The 
current State budget includes an appropriation of $75,000 per year for 
the program. The Academy's second class, which begins this September, 
includes representatives of local governments, local school districts, 
colleges and universities, health care organizations, economic 
development organizations and other non-profit organizations.

                                SUMMARY
    Both of these projects are examples of the Commission's commitment 
to civic capacity and leadership----

          ``The people and organizations of Appalachia will have the 
        vision and capacity to mobilize and work together for sustained 
        economic progress and improvement of their communities''

    Although the Commission's financial commitment to the two projects 
was relatively small in comparison to the costs of other projects such 
as infrastructure and highways, the long-term impact will be just as 
important to the region's future growth and development. Leadership 
development and civic capacity are critical to a community's economic 
viability and stability. The Appalachian Regional Commission should be 
commended for its investment in these types of activities.
    Thank you, again, for allowing me to submit this written testimony. 
If further information or clarification is needed, please contact me 
directly.

                 Overview of Ohio Distressed Countries
    This brief report presents an overview of the basic socioeconomic 
and demographic conditions of Ohio's counties, with details provided in 
the attached tables. Table summarizes the data used for the FY 2000 
county-level economic designations. In FY 2000 there are 9 distressed 
counties, and 19 transitional counties, and one competitive county in 
Ohio.
    Demographic features: a few key points emerge about Ohio's 
distressed counties.
     Only on distressed county (Monroe) experienced a 
population decline since 1990, but this was relatively small (-140); in 
contrast two transitional counties experienced larger declines (Belmont 
with -1,899, and Jefferson with -5,700).
     In 1998, four distressed counties had populations between 
10,000 and 25,000, including Meigs (24,006), Monroe (15,357), Morgan 
(14,536), Vinton (12,158) and five counties with populations greater 
than 25,000, including Adams (28,587), Athens (61,490), Gallia 
(33,422), Pike (27,775), and Scioto (80,355).
     Only two counties have been persistently distressed since 
1988, as shown in Table 2 which presents a history of distress status 
since 1988 (Adams and Pike).
     Six counties entered distressed status during the mid-
1990's (Athens, Meigs, Monroe, Morgan, Scioto, and Vinton), and Gallia 
County has entered distressed status after a decade of being classed 
transitional.
     Urban-Rural Characteristics:
         LTwo counties have urban populations of 20,000 or more 
        and are adjacent to a metro area (code 4, Table 1);
         LFour counties are adjacent to a metro area with urban 
        populations of 2,500 to 19,999 (code 6);
         LOne county is not adjacent to a metro area with urban 
        populations of 2,500 to 19,999 (code 7);
         LOne county is completely rural with an urban 
        populations of less than 2,500, but is adjacent to a metro 
        county (code 8);
         LOne county is completely rural with an urban 
        populations of less than 2,500, but is not adjacent to a metro 
        county (code 9);

                    GOAL 1.--EDUCATIONAL ATTAINMENT
    Educational attainment rates within Ohio's Appalachian counties are 
shown in Table 3 of the attachments.
     Two of the distressed counties have relatively high 
educational achievement rates, with double-digit college completion 
percentages, and high school completion percentages above 64 percent 
(Athens and Gallia). Athens has the highest college completion rate (23 
percent), but his is largely due to the presence of Ohio University.
     None of the distressed counties had high school completion 
rates below 50 percent.
     The other seven counties registered high school completion 
rates between 58 percent and 72 percent--all below the national average 
of 75 percent.

                        GOAL 2.--INFRASTRUCTURE
    Measures of Infrastructure needs are based on the 1999 LDD survey 
which provides some detail on water and sewer service, public access 
telecommunications facilities, and the extent of industrial parks and 
business incubators within each county.
Public Water System
    The percent of households served by public water systems in 
distressed counties broke into three groups:
     6 distressed counties had 75 percent or more of their 
households served by a public system;
     2 distressed counties had between 51 percent and 74 
percent of households served by a public water system;
     1 distressed county had 50 percent or less of their 
households served by a public system.
Public Waste Water System
    The percent of households served by public water systems in 
distressed counties broke into three groups:
     None of the distressed counties had 75 percent or more of 
the households served by a public wastewater system;
     1 had between 51 percent and 74 percent of households 
served by a public wastewater system;
     8 other distressed counties had 50 percent or less of 
their households served by a public wastewater system.
     These data indicate a high reliance on private septic 
systems in over half the counties, and probably a high incidence of 
poorly treated or untreated residential waste water.
    Industrial park development is found in seven of the distressed 
counties, but business incubators are located in only one of the 
distressed counties (Athens).
    Public access telecommunications facilities: Seven of Appalachian 
Ohio's distressed counties have public access telecommunications 
facilities, while public access facilities are not found in Meigs and 
Monroe counties.

                     GOAL 3.--COMMUNITY LEADERSHIP
    The 1998 LDD survey indicates the presence of a leadership program 
in 5 of the 9 distressed counties (those without are Adams, Athens, 
Meigs, and Monore).

                    GOAL 4.--DYNAMIC LOCAL ECONOMIES
    An economic profile of the local economies of each of the 
distressed counties is provided in Table 4 which shows the major 
employment sectors by county and industry based on 1996 data. The Table 
also details how a county's employment share in a particular industry 
compares to national employment share in the industry in question (as 
measured by the ``location quotient'' or LQ). Generally Table 4 
identifies those industries with high employment shares and LQs that 
are greater than 1.5.
    Several findings are evident from the county-level employment data.
    Manufacturing sectors are important for 3 of the 9 distress 
counties, accounting for over 20 percent of private, non-farm, 
employment in Monroe, Morgan, Pike, and Vinton. Monroe is the most 
manufacturing dependent with primary metals being the dominant 
industry. Pike is dominated by chemicals, Morgan has a fairly diverse 
manufacturing base, while Vinton has a large presence of chemicals, and 
lumber and wood products.
    Coal mining employment is a major employer in only Meigs, and has a 
smaller presence in Monroe and Vinton.
    Lumber and Wood Products The lumber and wood products industry has 
a presence in 7 of the distressed counties, and 5 counties have over 
250 jobs in these industries (Adams, Morgan, Pike, Scioto and Vinton), 
with Pike (1946), and Adams (456) being the largest employers.
    Apparel and Textiles The apparel and textiles industries has a 
small presence in Adams and Athens.
    Health services is very important in Ohio's distressed counties, as 
seven of the nine distressed counties (Adams, Athens, Gallia, Meigs, 
Morgan, Scioto and Vinton) have 10 percent or more of their private 
non-farm employment in health-related activities. Health services is 
the largest private employment sector in Adams, Gallia, and Scioto 
(which has the largest workforce by far with 4,000 health service 
workers, inclusive of doctors).
    Retail is very important in Adams, Athens and Scioto, suggesting 
that these counties may supply surrounding counties with much of the 
diversity of retail goods and services
    Farming (not shown in Table 4), is only significant in Adams 
county. The high dependency on farming raises a questions about what 
strategies have been adopted by local development efforts to cultivate 
``value-added'' business related to these counties farming specialties.
    Diversified Economies. A couple of these distressed counties have 
fairly diversified economies, with a good mix of manufacturing sectors, 
service sectors, finance, and retail employment, particularly in Adams, 
and Scioto.

                                             Table 1.--Appalachian Counties' Economic and Demographic Status
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Per
                                                                                Capita    Poverty                  Pop
                                                        Econ    Unemployment    Market   Rate 1990  Population    change                         Urban-
             County                     State          Status   Rate 1995-97    Income                 1998       since          Metro99         Ruarl
                                                       FY2000     (percent)      1996    (percent)                 1990                         Code 0-9
                                                                               (dollar)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Adams..........................  Ohio..............          1         12.0       8,881       28.5      28,587      3,216  non-metro                   6
Athens.........................  Ohio..............          1          5.4      11,082       28.7      61,490      1,941  non-metro                   4
Belmont........................  Ohio..............          2          7.1      12,472       17.4      69,175     -1,899  metro                       3
Brown..........................  Ohio..............          2          5.8      13,755       14.2      40,795      5,829  metro                       1
Carroll........................  Ohio..............          2          5.1      13,906       11.7      29,095      2,574  metro                       2
Clermont.......................  Ohio..............          3          4.3      18,135        8.7     175,960     25,793  metro                       0
Columbiana.....................  Ohio..............          2          5.8      13,780       15.9     111,521      3,245  metro                       2
Coshocton......................  Ohio..............          2          6.0      14,157       13.2      36,115        688  non-metro                   6
Gallia.........................  Ohio..............          1          8.6      11,455       22.5      33,422      2,468  non-metro                   6
Guernsey.......................  Ohio..............          2          8.0      11,181       17.5      40,994      1,970  non-metro                   7
Harrison.......................  Ohio..............          2          7.8      10,330       19.7      16,097         12  non-metro                   6
Highland.......................  Ohio..............          2          6.2      12,134       16.5      40,364      4,636  non-metro                   6
Hocking........................  Ohio..............          2          6.8      12,666       15.7      29,004      3,471  non-metro                   6
Holmes.........................  Ohio..............          2          3.4      13,263       17.2      37,841      4,992  non-metro                   7
Jackson........................  Ohio..............          2          7.7      11,268       24.2      32,563      2,333  non-metro                   7
Jefferson......................  Ohio..............          2         10.0      13,211       17.1      74,558     -5,740  metro                       3
Lawrence.......................  Ohio..............          2          6.5      10,690       23.5      64,427      2,593  metro                       2
Meigs..........................  Ohio..............          1         10.8       9,568       26.0      24,006      1,019  non-metro                   6
Monroe.........................  Ohio..............          1         10.2      11,726       21.5      15,357       -140  non-metro                   6
Morgan.........................  Ohio..............          1         13.4      10,992       21.2      14,536        342  non-metro                   8
Muskingum......................  Ohio..............          2          7.5      14,781       14.7      84,470      2,402  non-metro                   4
Noble..........................  Ohio..............          2          7.5      11,302       16.4      12,343      1,007  non-metro                   8
Perry..........................  Ohio..............          2          8.3      10,202       19.1      34,290      2,733  non-metro                   7
Pike...........................  Ohio..............          1          9.0      10,997       26.6      27,775      3,526  non-metro                   6
Ross...........................  Ohio..............          2          5.9      13,807       17.7      75,473      6,143  non-metro                   4
Scioto.........................  Ohio..............          1          9.8      10,942       25.8      80,355         28  non-metro                   4
Tuscarawas.....................  Ohio..............          2          5.4      15,319       11.1      88,608      4,518  non-metro                   4
Vinton.........................  Ohio..............          1         11.2      10,159       23.6      12,158      1,060  non-metro                   9
Washington.....................  Ohio..............          2          6.2      15,212       13.7      63,413      1,159  metro                       3
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                                    Table 2.--Designation of County Economic Status in the Appalachian Region, FY1988-FY2000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
        County                    State              FY1988     FY1989     FY1990     FY1991     FY1992     FY1993     FY1994     FY1995     FY1996     FY1997     FY1998     FY1999     FY2000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Adams................  OH........................          1          1          1          1          1          1          1          1          1          1          1          1          1
Athens...............  OH........................          2          2          2          2          2          2          1          1          1          1          1          1          1
Belmont..............  OH........................          2          2          2          2          2          2          2          2          2          2          2          2          2
Brown................  OH........................          2          2          2          2          2          2          2          2          2          2          2          2          2
Carroll..............  OH........................          2          2          2          2          2          2          2          2          2          2          2          2          2
Clermont.............  OH........................          2          2          2          2          2          3          3          3          3          3          3          3          3
Columbiana...........  OH........................          2          2          2          2          2          2          2          2          2          2          2          2          2
Coshocton............  OH........................          2          2          2          2          2          2          2          2          2          2          2          2          2
Gallia...............  OH........................          2          2          2          2          2          2          2          2          2          2          2          1          1
Guernsey.............  OH........................          2          2          2          2          2          2          2          2          2          2          2          2          2
Harrison.............  OH........................          2          2          2          2          2          1          1          1          1          2          2          2          2
Highland.............  OH........................          2          2          2          2          2          2          2          2          2          2          2          2          2
Hocking..............  OH........................          2          2          2          2          2          2          2          2          2          2          2          2          2
Holmes...............  OH........................          2          2          2          2          2          2          2          2          2          2          2          2          2
Jackson..............  OH........................          2          2          2          2          2          2          2          2          2          2          2          2          2
Jefferson............  OH........................          2          2          2          2          2          2          2          2          2          2          2          2          2
Lawrence.............  OH........................          2          2          2          2          2          2          2          2          2          2          2          2          2
Meigs................  OH........................          2          2          2          2          2          2          1          1          1          1          1          1          1
Monroe...............  OH........................          2          2          2          2          2          1          1          1          1          1          1          1          1
Morgan...............  OH........................          2          2          2          2          2          2          1          1          1          1          1          1          1
Muskingum............  OH........................          2          2          2          2          2          2          2          2          2          2          2          2          2
Noble................  OH........................          2          2          2          2          2          2          2          2          2          2          2          2          2
Perry................  OH........................          2          2          2          2          2          2          1          1          1          2          2          2          2
Pike.................  OH........................          1          1          1          1          1          1          1          1          1          1          1          1          1
Ross.................  OH........................          2          2          2          2          2          2          2          2          2          2          2          2          2
Scioto...............  OH........................          2          2          2          2          2          1          1          1          1          1          1          1          1
Tuscarawas...........  OH........................          2          2          2          2          2          2          2          2          2          2          2          2          2
Vinton...............  OH........................          2          2          2          2          2          1          1          1          1          1          1          1          1
Washington...........  OH........................          2          2          2          2          2          2          2          2          2          2          2          2          2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                        Tabel 3.--Educational Attainment in Appalachian Counties based on the 1990 Census
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                Completed               Total
                                                                     FY2000   Population  8th Grade    Total       High    Associate    Number   Completed                              Dropouts
                 State                            County            EC Level   25 Yrs +   Completed  Number HS    School     Degree    College    College          HS Dropouts         (percent)
                                                                                                       Grads    (percent)               Grads    (percent)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
OH....................................  Adams....................          1      15,569      3,226      9,090      58.4%        549        812       5.2%  6,479....................      41.6%
OH....................................  Athens...................          1      30,179      2,455     22,517       74.6      1,732      7,065       23.4  7,662....................       25.4
OH....................................  Belmont..................          2      48,645      5,637     35,191       72.3      2,496      4,391        9.0  13,454...................       27.7
OH....................................  Brown....................          2      21,769      3,076     14,130       64.9        875      1,614        7.4  7,639....................       35.1
OH....................................  Carroll..................          2      17,124      1,627     12,248       71.5        591      1,348        7.9  4,876....................       28.5
OH....................................  Clermont.................          3      91,613      8,826     66,679       72.8      4,772     13,266       14.5  24,934...................       27.2
OH....................................  Columbiana...............          2      70,249      6,847     50,439       71.8      3,198      5,998        8.5  19,810...................       28.2
OH....................................  Coshocton................          2      22,878      2,450     16,319       71.3        809      1,863        8.1  6,559....................       28.7
OH....................................  Gallia...................          1      19,586      3,235     12,570       64.2        795      2,130       10.9  7,016....................       35.8
OH....................................  Guernsey.................          2      25,188      2,462     17,974       71.4      1,082      2,322        9.2  7,214....................       28.6
OH....................................  Harrison.................          2      10,726      1,182      7,482       69.8        382        750        7.0  3,244....................       30.2
OH....................................  Highland.................          2      22,784      3,018     15,147       66.5        929      1,876        8.2  7,637....................       33.5
OH....................................  Hocking..................          2      16,368      1,659     11,105       67.8        771      1,333        8.1  5,263....................       32.2
OH....................................  Holmes...................          2      17,780      5,863      8,341       46.9        489      1,170        6.6  9,439....................       53.1
OH....................................  Jackson..................          2      19,136      3,042     11,650       60.9        598      1,504        7.9  7,486....................       39.1
OH....................................  Jefferson................          2      54,294      5,766     39,026       71.9      2,713      4,803        8.8  15,268...................       28.1
OH....................................  Lawrence.................          2      39,219      5,180     25,837       65.9      1,553      3,235        8.2  13,382...................       34.1
OH....................................  Meigs....................          1      14,772      2,258      9,458       64.0        651      1,074        7.3  5,314....................       36.0
OH....................................  Monroe...................          1      10,196      1,453      7,081       69.4        383        689        6.8  3,115....................       30.6
OH....................................  Morgan...................          1       8,980        963      6,428       71.6        360        662        7.4  2,552....................       28.4
OH....................................  Muskingum................          2      51,692      4,977     36,774       71.1      2,722      5,199       10.1  14,918...................       28.9
OH....................................  Noble....................          2       7,235        673      5,054       69.9        237        403        5.6  2,181....................       30.1
OH....................................  Perry....................          2      19,411      2,028     13,307       68.6        832      1,130        5.8  6,104....................       31.4
OH....................................  Pike.....................          1      15,099      2,719      9,176       60.8        678      1,201        8.0  5,923....................       39.2
OH....................................  Ross.....................          2      45,531      4,821     30,770       67.6      2,220      4,207        9.2  14,761...................       32.4
OH....................................  Scioto...................          1      51,585      8,456     32,889       63.8      2,727      4,380        8.5  18,696...................       36.2
OH....................................  Tuscarawas...............          2      55,192      5,563     39,693       71.9      2,235      4,986        9.0  15,499...................       28.1
OH....................................  Vinton...................          1       6,963      1,147      4,087       58.7        215        336        4.8  2,876....................       41.3
OH....................................  Washington...............          2      40,411      3,214     31,321       77.5      2,336      5,346       13.2  9,090....................       22.5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                        Table 4.--Economic Base Analysis
----------------------------------------------------------------------------------------------------------------
                                                                                             Percent
           SIC                      Industry                    Sector            Jobs(96)    of Emp       LQ
----------------------------------------------------------------------------------------------------------------
                               Adams, Ohio, FIPS Code: 39001, Distressed Status: 1

8000....................  Health services............  SER                             598      14.9%       1.38
5800....................  Eating and drinking places.  RET                             463       11.5       1.59
2400....................  Lumber and wood products...  MFG                             456       11.3      15.83
5400....................  Food stores................  RET                             306        7.6       2.36
5500....................  Automotive dealers &         RET                             224        5.6       2.51
                           Service Stations.
5300....................  General merchandise stores.  RET                             164        4.1       1.84
5900....................  Miscellaneous retail.......  RET                             157        3.9       1.51
3700....................  Transportation equipment...  MFG                             154        3.8       2.57
3500....................  Industrial machinery and     MFG                             146        3.6       1.93
                           equipment.
8300....................  Social services............  SER                             143        3.6       1.58
0700....................  Agricultural services......  AFF                              87        2.2       3.52
1400....................  Nonmetallic minerals,        MIN                              76        1.9      19.16
                           except fuels.
2300....................  Apparel and other textile    MFG                              68        1.7       2.05
                           products.
5200....................  Building materials & garden  RET                              64        1.6       2.12
                           supplies.
4900....................  Electric, gas, and sanitary  TPU                              55        1.4       1.59
                           services.
4970....................  Administrative and           TPU                              14        0.3       1.95
                           auxiliary.

                              Athens, Ohio, FIPS Code: 39009, Distressed Status: 1

5800....................  Eating and drinking places.  RET                            1867       15.8       2.17
8000....................  Health services............  SER                            1735       14.6       1.36
5400....................  Food stores................  RET                             750        6.3       1.96
5900....................  Miscellaneous retail.......  RET                             646        5.5       2.11
8300....................  Social services............  SER                             543        4.6       2.03
6500....................  Real estate................  FIR                             467        3.9       2.83
3100....................  Leather and leather          MFG                             333        2.8      33.21
                           products.
2300....................  Apparel and other textile    MFG                             333        2.8       3.41
                           products.
2700....................  Printing and publishing....  MFG                             296        2.5       1.71
4900....................  Electric, gas, and sanitary  TPU                             192        1.6       1.88
                           services.
5200....................  Building materials & garden  TPU                             153        1.3       1.72
                           supplies.
3900....................  Miscellaneous manufacturing  MFG                             149        1.3       3.28
                           industries.
0800....................  Forestry...................  AFF                               7        0.1       2.82

                              Belmont, Ohio, FIPS Code: 39013, Distressed Status: 2

8000....................  Health services............  SER                            3288       18.5       1.72
5800....................  Eating and drinking places.  RET                            1905       10.7       1.48
5400....................  Food stores................  RET                            1241        7.0       2.16
5300....................  General merchandise stores.  RET                            1083        6.1       2.76
5500....................  Automotive dealers &         RET                             640        3.6       1.62
                           service stations.
3400....................  Fabricated metal products..  MFG                             600        3.4       2.36
1200....................  Coal mining................  MIN                             545        3.1      33.20
5600....................  Apparel and accessory        RET                             349        2.0       1.90
                           stores.
2300....................  Apparel and other textile    MFG                             317        1.8       2.16
                           products.
5700....................  Furniture and home           RET                             287        1.6       1.88
                           furnishings stores.
4900....................  Electric, gas, and sanitary  TPU                             247        1.4       1.62
                           services.

                              Gallia, Ohio, FIPS Code: 39053, Distressed Status: 1

8000....................  Health services............  SER                            1911       21.4       1.99
4900....................  Electric, gas, and sanitary  TPU                            1014       11.4      13.21
                           services.
3600....................  Electronic & other electric  MFG                             467        5.2       3.46
                           equipment.
8200....................  Educational services.......  SER                             405        4.5       2.20
5500....................  Automotive dealers &         RET                             362        4.1       1.83
                           Service stations.
3700....................  Transportation equipment...  MFG                             255        2.9       1.92
5200....................  Building materials & garden  RET                             122        1.4       1.82
                           supplies.
1200....................  Coal mining................  MIN                              60        0.7       7.27
2900....................  Petroleum and coal products  MFG                              31        0.3       3.27

                             Guernsey, Ohio, FIPS Code: 39059, Distressed Status: 2

8000....................  Health services............  SER                            1835       15.2       1.41
3000....................  Rubber and misc. plastics    MFG                             987        8.2       8.37
                           products.
3500....................  Industrial machinery and     MFG                             454        3.8       2.00
                           equipment.
3600....................  Electronic & other electric  MFG                             438        3.6       2.40
                           equipment.
5500....................  Automotive dealers &         RET                             426        3.5       1.59
                           service stations.
3400....................  Fabricated metal products..  MFG                             386        3.2       2.23
3200....................  Stone, Clay, and glass       MFG                             305        2.5       5.21
                           products.
2800....................  Chemicals and allied         MFG                             268        2.2       2.72
                           products.
4900....................  Electric, gas, and sanitary  TPU                             236        2.0       2.27
                           services.
1200....................  Coal mining................  MIN                             223        1.8      19.97
1600....................  Heavy construction, ex.      CON                             169        1.4       2.01
                           building.
2600....................  Paper and allied products..  MFG                             127        1.1       1.72
1300....................  Oil and gas extraction.....  MIN                              80        0.7       2.63
6700....................  Holding and other            FIR                              68        0.6       1.90
                           investment offices.

                             Harrison, Ohio, FIPS Code: 39067, Distressed Status: 2

8000....................  Health services............  SER                             427       15.1       1.41
2400....................  Lumber and wood products...  MFG                             386       13.7      19.09
1200....................  Coal mining................  MIN                             272        9.6       04.3
5000....................  Wholesale trade-durable      WHL                             189        6.7       1.83
                           goods.
5400....................  Food stores................  RET                             151        5.4       1.66
2700....................  Printing and publishing....  MFG                             131        4.6       3.18
3500....................  Industrial machinery and     MFG                              96        3.4       1.81
                           equipment.
6500....................  Real estate................  FIR                              91        3.2       2.32
3200....................  Stone, clay, and glass       MFG                              50        1.8       3.66
                           products.
4400....................  Water transportation.......  TPU                              14        0.5       3.02
0800....................  Forestry...................  AFF                               2        0.1       3.39

                              Jackson, Ohio, FIPS Code: 39079, Distressed Status: 2

2000....................  Food and kindred products..  MFG                            1841       18.3      12.16
6100....................  Nondepository institutions.  FIR                             846        8.4      15.96
3000....................  Rubber and misc. plastics    MFG                             531        5.3       5.42
                           products.
6000....................  Depository institutions....  FIR                             497        5.0       2.46
2400....................  Lumber and wood products...  MFG                             474        4.7       6.59
5500....................  Automotive dealers &         RET                             383        3.8       1.72
                           service stations.
3300....................  Primary metal industries...  MFG                             211        2.1       3.14
3200....................  Stone, clay, and glass       MFG                             178        1.8       3.66
                           products.
2300....................  Apparel and other textile    MFG                             158        1.6       1.91
                           products.
1200....................  Coal mining................  MIN                             147        1.5      15.85
1400....................  Nonmetallic minerals,        MIN                              29        0.3       2.93
                           except fuels.

                             Jefferson, Ohio, FIPS Code: 39081, Distressed Status: 2

8000....................  Health services............  SER                            3363       15.3       1.42
3300....................  Primary metal industries...  MFG                            3331       15.1      22.65
8200....................  Educational services.......  SER                            1290        5.9       2.85
5400....................  Food stores................  RET                            1232        5.6       1.73
4900....................  Electric, gas, and sanitary  TPU                            1111        5.1       5.88
                           services.
5300....................  General merchandise stores.  RET                             737        3.4       1.51
8600....................  Membership organizations...  SER                             735        3.3       1.54
7200....................  Personal services..........  SER                             503        2.3       1.81
1200....................  Coal mining................  MIN                              73        0.3       3.59
0800....................  Forestry...................  AFF                               8        0.0       1.74

                               Meigs, Ohio, FIPS Code: 39105, Distressed Status: 1

1200....................  Coal mining................  MIN                             772       24.2       61.5
8000....................  Health services............  SER                             451       14.1       1.31
5400....................  Food stores................  RET                             229        7.2       2.22
5500....................  Automotive dealers &         RET                             120        3.8       1.69
                           service stations.
1500....................  General contractors and      CON                              72        2.3       1.84
                           operative builder.
1300....................  Oil and gas extraction.....  MIN                              55        1.7       6.85
5200....................  Building materials & garden  RET                              42        1.3       1.75
                           supplies.
2400....................  Lumber and wood products...  MFG                              36        1.1       1.57
1400....................  Nonmetallic minerals,        MIN                              34        1.1      10.79
                           except fuels.
4400....................  Water transportation.......  TPU                               8        0.3       1.52

                              Monroe, Ohio, FIPS Code: 39111, Distressed Status: 1

3300....................  Primary metal industries...  MFG                            2340       54.9      82.12
1200....................  Coal mining................  MIN                             335        7.9      85.06
3990....................  Administrative and           MFG                             100        2.3       1.77
                           auxiliary.
2400....................  Lumber and wood products...  MFG                              67        1.6       2.19
1400....................  Nonmetallic minerals,        MIN                               9        0.2       2.14
                           except fuels.

                              Morgan, Ohio, FIPS Code: 39115, Distressed Status: 1

2400....................  Lumber and wood products...  MFG                             352       16.1      22.40
8000....................  Health services............  SER                             327       14.9       1.39
3500....................  Industrial machinery and     MFG                             324       14.8       7.86
                           equipment.
3400....................  Fabricated metal products..  MFG                             142        6.5       4.53
5400....................  Food stores................  RET                             131        6.0       1.85
5500....................  Automotive dealers &         RET                              91        4.1       1.87
                           service stations.
6000....................  Depository institutions....  FIR                              76        3.5       1.72
1600....................  Heavy construction, ex.      CON                              40        1.8       2.63
                           building.
2500....................  Furniture and fixtures.....  MFG                              20        0.9       1.87
1400....................  Nonmetallic minerals,        MIN                              17        0.8       7.86
                           except fuels.

                               Perry, Ohio, FIPS Code: 39127, Distressed Status: 1

3300....................  Primary metal industries...  MFG                             665       14.8       22.1
8000....................  Health services............  SER                             581       12.9       1.20
3200....................  Stone, clay, and glass       MFG                             474       10.5      21.74
                           products.
5400....................  Food stores................  RET                             251        5.6       1.73
3500....................  Industrial machinery and     MFG                             233        5.2       2.76
                           equipment.
8300....................  Social services............  SER                             187        4.2       1.84
8600....................  Membership organizations...  SER                             156        3.5       1.60
5500....................  Automotive dealers &         RET                             155        3.4       1.55
                           service stations.
1300....................  Oil and gas extraction.....  MIN                             116        2.6      10.26
5200....................  Building materials & garden  RET                              55        1.2       1.63
                           supplies.
1400....................  Nonmetallic minerals,        MIN                              46        1.0      10.36
                           except fuels.
1200....................  Coal mining................  MIN                              37        0.8       8.90
2900....................  Petroleum and coal products  MFG                              16        0.4       3.35

                               Pike, Ohio, FIPS Code: 39131, Distressed Status: 1
2800....................  Chemicals and allied         MFG                            2500       30.0      36.78
                           products.
2400....................  Lumber and wood products...  MFG                            1946       23.3      32.57
8300....................  Social services............  SER                             331        4.0       1.76
                              Scioto, Ohio, FIPS Code: 39145, Distressed Status: 1

8000....................  Health services............  SER                            4180       23.4       2.18
5800....................  Eating and drinking places.  RET                            2264       12.7       1.75
5400....................  Food stores................  RET                            1037        5.8       1.80
5500....................  Automotive dealers &         RET                             719        4.0       1.81
                           service stations.
5300....................  General merchandise stores.  RET                             678        3.8       1.71
8300....................  Social services............  SER                             653        3.7       1.62
3300....................  Primary metal industries...  MFG                             621        3.5       5.20
7200....................  Personal services..........  SER                             355        2.0       1.57
2200....................  Textile mill products......  MFG                             325        1.8       3.19
3200....................  Stone, clay, and glass       MFG                             282        1.6       3.25
                           products.
2400....................  Lumber and wood products...  MFG                             250        1.4       1.95
4100....................  Local and interurban         TPU                             152        0.9       2.07
                           passenger transit.

                              Vinton, Ohio, FIPS Code: 39163, Distressed Status: 1

2400....................  Lumber and wood products...  MFG                             387       23.5      32.75
2800....................  Chemicals and allied         MFG                             289       17.5      21.50
                           products.
8000....................  Health services............  SER                             173       10.5       0.98
5400....................  Food stores................  RET                             117        7.1       2.20
4200....................  Trucking and warehousing...  TPU                             112        6.8       3.75
1200....................  Coal mining................  MIN                             110        6.7      72.17
6000....................  Depository institutions....  FIR                              70        4.2       2.10
4100....................  Local and interurban         TPU                              26        1.6       3.84
                           passenger transit.
5200....................  Building materials & garden  RET                              26        1.6       2.10
                           supplies.
6700....................  Holding and other            FIR                              11        0.7       2.25
                           investment offices.
----------------------------------------------------------------------------------------------------------------

                      Status of Corridors in Ohio
  Appalachian Development Highway System (ADHS) Ohio Corridors as of 
                           September 30, 1999

                                 Summary
------------------------------------------------------------------------

------------------------------------------------------------------------
Total Number of ADHS Miles................  303.6 miles
Number of ADHS Miles Eligible for Funding.  201.7 miles
Number of ADHS Miles Open to Traffic......  161.6 miles
Miles Remaining to be Completed...........  40.1 miles
                                           -----------------------------
    Total ADHS-Funded Obligations (Federal  $274.4 million
     and State).
Estimated Cost to Complete, Federal and     $391.8 million
 State Funds (as of September 30, 1996).
  Corridor B..............................  $204.8 million
  Corridor B1.............................  complete
  Corridor C..............................  $58.0 million
  Corridor C1.............................  added since the 1997 Cost
                                             Estimate
  Corridor D..............................  $129.0 million
------------------------------------------------------------------------

         FEDERAL FUNDING FOR OHIO CORRIDORS IN FISCAL YEAR 1999
    In fiscal year 1999 Ohio was apportioned $22,008,205 from TEA-21 
for use on their ADHS Corridors. In addition, Ohio received $1,125,000 
in Demonstration Funds from Section 1602 of TEA-21, ($562,500 for 
Corridor B and $562,500 for Corridor C1).

                      FISCAL YEAR 1999 OBLIGATIONS
    During fiscal year 1999 Ohio obligated $19.4 million in TEA-21 
funds on the ADHS.

                  FEDERAL FUNDING FOR FISCAL YEAR 2000
    Ohio's TEA-21 apportionment for FY 2000 was $22,008,205. Ohio also 
received $1,350,000 in Demonstration Funds from Section 1602 of TEA-21 
($675,000 for Corridor B and $675,000 for Corridor C1).
                          status of corridors
Corridor B (State Route 253, U.S. 52, U.S. 23)
    Corridor B runs from the Kentucky State line at Greenup Dam along 
the Ohio River around Portsmouth and northwest to Corridor C near 
Lucasville. The total length of the corridor is 33.6 miles.

------------------------------------------------------------------------

------------------------------------------------------------------------

Authorized for Funding....................  26.0 miles
Open to Traffic...........................  10.1 miles
Design & ROW Under Way....................  15.9 miles
------------------------------------------------------------------------

Corridor B1 (U.S. 23)
    Corridor B1 runs from the Kentucky State line at Portsmouth north 
to Corridor B. The total length of the corridor is 4.7 miles.

------------------------------------------------------------------------

------------------------------------------------------------------------
Authorized for Funding....................  0.5 miles
Open to Traffic...........................  0.5 miles
------------------------------------------------------------------------

Corridor C (U.S. 23)
    Corridor C runs from its junction with Corridor B north of 
Portsmouth to I-270 at Columbus. The total length of the corridor is 
71.7 miles.

------------------------------------------------------------------------

------------------------------------------------------------------------
Authorized for Funding....................  13.4 miles
Open to Traffic...........................  6.0 miles
Location Studies Under Way................  7.4 miles
------------------------------------------------------------------------

    Projects currently under way on Corridor C in Ohio include:
  Location studies of two sections, bypasses of Waverly and 
            Ashville, on U.S. 23.
Corridor C1 (U.S. 35)
    Corridor C1 runs from its junction with Corridor C at Chillicothe 
to its junction with Corridor D at Jackson. The total length of 
Corridor C1 is 24.0 miles.

------------------------------------------------------------------------

------------------------------------------------------------------------
Authorized for Funding....................  9.4 miles
Location Studies Under Way................  9.4 miles
------------------------------------------------------------------------

Corridor D (State Route 32, State Route 124. U.S. 50)
    Corridor D runs from 1-275 east of Cincinnati to the West Virginia 
State line at Belpre and Parkersburg. The total length of the corridor 
is 169.6 miles.

------------------------------------------------------------------------

------------------------------------------------------------------------
Authorized for Funding....................  152.3 miles
Open to Traffic...........................  144.9 miles
Construction Under Way....................  6.9 miles
Location Studies Under Way................  0.5 miles
------------------------------------------------------------------------

    Projects currently under way on Corridor D in Ohio include:
  Construction of 6.9 miles on U.S. 50/State Route 32 east of 
            Athens.

            
            
     Statement of Hocking College Appalachian Regional Commission, 
                           Nelsonville, Ohio
    Hocking College began as Tri-County Technical Institute in 1968. 
The Appalachian Regional Commission (A.R.C.) provided partial funding 
for the construction for the first college building. As the college 
outgrew the Tri-County facility, A.R.C. provided construction funding 
for the first, second and third phases of construction on the 250 acre 
site of the present campus. The funding in all of these instances was 
primarily for bricks and mortar with some targeted instructional 
laboratory equipment. This investment by A.R.C. launched Hocking 
College during the late 1960's and 1970's. Without the A.R.C. 
investment, Tri-County Technical Institute would not have had the 
capability to grow to meet the region's needs.
    Hocking College is the largest technical college in Ohio with 
nearly 5000 students at the Nelsonville campus and over 1500 students 
at other locations throughout the region. Students attend from every 
county in Ohio, 30 different States and over 50 different foreign 
counties. The Athens, Hocking and Perry County service district is the 
smallest population base of any Ohio college district.
    An early and continuing A.R.C. initiative is health care. The 
shortage of trained personnel in such basic health careers as nursing 
was critical. Hocking College began all of its early health education 
technologies with assistance from A.R.C. Today, the Hocking College 
nursing program has received numerous excellence awards, has the top 
average among schools of nursing in Ohio on passage of the State board 
exam and graduates more nurses than any other college in Ohio 
(including Ohio State University.) The Schools of Nursing and Allied 
Health enroll nearly 1000 students annually.
    A.R.C. assisted in funding the Hocking Valley Motor Lodge in 1973. 
During the last week in July 2000, the student chef team of the Hocking 
College Culinary Institute placed second in the nation in the American 
Culinary Association annual competition in Nashville, Tennessee. 
Hocking College probably would not have had a culinary program, if 
A.R.C. had not built what is now the Ramada Inn. In addition to serving 
as the laboratory for hospitality technologies, the Inn has hosted 
countless events that brought people to Nelsonville and expanded the 
service capabilities of the college to its community.
    The uniqueness of Hocking College programs has allowed it to 
develop as a full time residential college. Over 2000 students move to 
the area for residence during their school years. The economic impact 
of the resident and commuter (2500) students is very significant. 
Program uniqueness has also encouraged the college to host many annual 
events. The Paul Bunyan Show, hosted by the forestry technology, is the 
largest annual event in southeastern Ohio with an annual economic 
impact estimate of over $2 million.
    One of the more recent A.R.C./Hocking College projects was the 
water and sewer lines for the Perry Campus in New Lexington. A.R.C. 
also provided the initial laboratory equipment for the startup of the 
Perry Campus. The Ohio Board of Regents does not set aside funds for 
new program startup. Consequently, A.R.C. assistance is critical to new 
program development that requires extensive laboratory investment. Once 
the program has enrollment, Ohio Board of Regents funding is adequate 
to sustain most programs. But, without A.R.C., startup costs are often 
a major impediment. It is important to remember that Ohio is in the 
bottom \1/3\ of States, in terms of support for higher education. 
Participation rates also lag other States. Participation rates in 
Appalachia remains lower than the statewide average.
    A.R.C. and specifically the Buckeye Hills Hocking Valley Regional 
Development District has provided excellent planning and economic 
development assistance. The goals and strategies which are constantly 
updated have assisted Hocking College and all agencies in the region 
with garnering additional private and public funds. The response and 
often the willing partnering of Buckeye Hills Hocking Valley Regional 
Development has provided the strength that individual agencies, even a 
State-assisted college, can't muster by themselves.
    In spite of the good works, and outstanding cooperation on regional 
issues, A.R.C. has not led the region into uniform economic prosperity. 
While the evolution of economic prosperity is somewhat mystic, the 
tangible contributions of A.R.C. are perhaps most recognizable at 
places like Hocking College. Not only have thousands of Appalachian 
youth and adults received the very best career education, but thousands 
more have come to the region, contributed to it and move on because of 
the attraction of the programs of Hocking College. At least, part of 
the mystery of positive regional economics is about creating 
attractions i.e. attractions for commercial investment or attractions 
for individual investments. Individuals invest two years of their time 
in Nelsonville when they attend attractive programs at Hocking College.
    The Hocking Valley Scenic Railroad and Robbins Crossing on the 
Hocking College campus attract over 30,000 visitors annually. Any 
enhancement that A.R.C. can provide to existing attractions will have 
continued long range positive economic impact. Perhaps the greatest 
current attraction is an available labor pool. Appalachians are known 
for their outstanding work ethic. The current problem is lack of 
technology skills. High school completion rates are low. Higher 
education participation is low. Investment in technical education for 
18 to 30 years of age is a no brainer. This investment would be an 
outstanding commercial attraction. An attraction that would bring jobs 
and long term careers
    In looking to the future of the region and reflecting on 
investments of the past, stewardship remains a critical force. Every 
investment will not pay huge economic dividends. There will be 
disappointments. In the long run, the investments made with eye to the 
permanence of their steward will have lasting value. A.R.C. for the 
most part has provided resources to permanent institutions of the 
region. This practice should continue to build the region's economy. 
Overall, ARC has become a keystone in the regional economy. An economy 
that desperately needs to expand. Changing the keystones configuration 
will have a significant regional economic effect.
                               __________
                Social and Economic Status of Appalachia

                               POPULATION
    With a population of 1.5 million (based on 1998 population 
estimates), Appalachia Ohio represents only 13 percent of Ohio's total 
population of 11.3 million. The region, however, makes up one-third of 
the State's total geographic area.
    While the State has seen a net migration of -157,655 from 1987 to 
1998, many Appalachian counties have seen positive net migration.
    The following depicts counties with positive net migrations over 
1,000 persons from 1987 to 1998.

------------------------------------------------------------------------

------------------------------------------------------------------------
Columbiana.................................................         1197
Meigs......................................................         1200
Perry......................................................         1292
Lawrence...................................................         1295
Jackson....................................................         1387
Tuscarawas.................................................         1912
Adams......................................................         2058
Hocking....................................................         2266
Carroll....................................................         2621
Pike.......................................................         3598
Ross.......................................................         4109
Highland...................................................         4119
Brown......................................................         4843
Clermont...................................................        16181
------------------------------------------------------------------------

    The following depicts counties with negative net migrations from 
1987 to 1999:

------------------------------------------------------------------------

------------------------------------------------------------------------
Jefferson..................................................        -5411
Belmont....................................................        -1925
Holmes.....................................................        -1170
Washington.................................................         -921
Scioto.....................................................         -914
Muskingum..................................................         -784
Harrison...................................................         -547
Monroe.....................................................         -515
Athens.....................................................         -322
------------------------------------------------------------------------

    The remaining five counties: Coshocton, Gallia, Guernsey, Morgan, 
Noble and Vinton.

                               EDUCATION
    From 1980 to 1990, the percent of high school graduates increased 
from 59.8 percent to 69.2 percent in Appalachia Ohio. The greatest 
percent increase of 12 percent occurred in both Clermont and Brown 
Counties. The lowest increase, 4 percent, occurred in Holmes County. To 
what extent the large Amish population (who traditionally does not 
attain education beyond the 8th grade) influenced the numbers in Holmes 
County is unknown. Current statistics regarding Ohio's graduation rates 
will not be made available until 2003, when the Census data for 1990-
2000 will be distributed. In addition to the Census data, Ohio will be 
examining student achievement through its mandatory proficiency testing 
systems for 4th, 6th, 9th, and 12th grade students.
    Schools within Appalachia are increasing their percentages of 
students attending college. Beaver Local High School in Columbiana 
County has increased its percentage from 48 percent in FY 1996 to 58.1 
percent in FY 1999. Buckeye Local High School in Jefferson County has 
increased its rate from 53 percent in FY 1994 to 64 percent in FY 1999. 
There are several other examples of this successful increase in 
college-going rate. These schools have participated in an ARC-sponsored 
program known as the Ohio Appalachian Center for Higher Education 
(OACHE). Statistics are not available for the entire area at this time.

                                ECONOMIC
    Per capita income (PCI), as an average for Ohio in 1998, totaled 
$26,073 and a corollary to this PCI dollar amount, the percent change 
from 1993 to 1998 for Ohio was nearly 20 percent. The Appalachian 
region had a Per capita income of $18,538 in 1998, thirty percent lower 
than the State's average. In 1998, the highest Appalachian PCI was in 
Clermont County with $24,828; the lowest was $13,564 in Noble County.
    The State of Ohio's average unemployment was 4.4 percent in 1999. 
Such is not the case in Appalachia Ohio where only two Appalachia 
counties (Holmes and Clermont) fell below the State's rate in 1998. 
Double-digit unemployment rates were observed in Adams (10.9 percent), 
Meigs (10.5 percent), Morgan (13.1 percent), and Vinton (10.9 percent) 
counties. All four of these counties ranked in the top four in the 
State for their high rates.

                              HEALTH CARE
    The three leading causes of death in both the Appalachian region 
and the nation are chronic heart disease, malignant neoplasm and other 
cardiovascular diseases. They account for 2/3 of all deaths in the 
region. ``Of the 398 Counties (In 1994, there were only 398 counties) 
of the Appalachian region, 67 have an age adjusted cancer mortality 
rate that is lower than the U.S. mean, and 37 counties have an age 
adjusted rate higher than the U.S. mean. . . . Cancer is a problem of 
about the same magnitude in Appalachia as in the rest of the United 
States. The exception to this generalization is the string of counties 
beginning in Alabama and extending along the Cumberland Mountains from 
Tennessee through Kentucky and West Virginia and into Ohio and western 
Pennsylvania where cancer mortality rates are significantly higher than 
the rest of the nation''. (National Institutes of Health. Sowing Seeds 
in the Mountains. Pg. 54. September 1994)
    According to the Robert C. Byrd Health Sciences Center at West 
Virginia University in their report ``Heart Disease in Appalachia,'' 
they found that for chronic heart disease mortality from 1983-1993 was 
consistently higher in Appalachia than the entire United States for 
white adults. For African American adults, there was little difference 
between Appalachia and the entire nation. They also reported that high 
rates of chronic heart disease mortality were concentrated mainly in 
central Appalachia counties including southern Ohio.
    Many health programs are not equipped to identify mental health 
issues and Alcoholism, however practitioners in the region do recognize 
that serious problems exist in Southeastern Ohio.
    According to the National Institute of Health's Appalachian 
Initiative on Cancer, programs designed to promote health at the 
community level need to be based on the recognition that the state of 
people's health is deeply rooted in the daily conditions of their 
lives.
    By measuring the infant mortality rates, Ohio is able to assess one 
aspect of health care in its Appalachian counties. To reduce dramatic 
swings in rates, the data were compiled in 3-year cycles. The most 
recent data measuring Infant mortality rates indicate that Appalachia 
Ohio is fairly consistent with the region and the nation. In the three-
year cycle from 1992-1994, Ohio Appalachia's rate was 8.3 percent, 
which was the same as the region and one-tenth of a percent above the 
national average. This figure, however, is deceptive in that the range 
of infant mortality rates among Ohio Appalachian counties vary 
considerably. The highest rate of 16.4 percent is found in Meigs County 
compared to 2.3 percent in Noble County.
    Another indicator of health care in Appalachia is the number of 
Health Professional Shortage Areas (HPSAs). The U.S. Department of 
Health and Human Services designate HPSAs. The designation is 
indicative of a shortage of primary care physicians in a rational 
service area. Shortage areas are identified through analysis of 
physician/population ratios. Twenty-four of the 29 Appalachian counties 
have areas that are considered HPSAs.

                           TRAVEL AND TOURISM
    According to a Travel Tourism Economic Impacts report by 
MarketVision Research, the following data was recorded for Appalachia 
Ohio for 1998:

------------------------------------------------------------------------

------------------------------------------------------------------------
Direct Employment (Jobs).......................                  $20,580
Direct Output (Sales Receipts).................              563,236,000
Direct Payroll.................................              194,325,000
Consumer Sales Tax Receipts....................               26,572,000
Motor Fuel Tax.................................                8,035,000
Personal Income Tax Receipts...................                6,704,000
Corporate Net Income Tax Receipts..............                1,152,000
------------------------------------------------------------------------

    Note: The 1999 report should be available in late August 2000 and 
will provide a clearer picture of county variations in tourism 
activity.

                        PHYSICAL INFRASTRUCTURE
    The overall needs in terms of infrastructure development in 
Appalachia Ohio can be summarized in two broad categories: new/
expansion and repair/replacement infrastructure. In terms of new/
expansion infrastructure, many of Ohio Appalachia's small communities 
lack potable water and sanitary sewer service. This situation is more 
pronounced in distressed counties. Typically, these are residential 
needs that have a community development orientation. Often these 
communities face Environmental Protection Agency (EPA) findings and 
orders and need to make improvements for the sake of public health and 
safety. The job creating economic development projects typically happen 
in or on the fringe of municipalities. In these cases, infrastructure 
expansion which may include extending water, sewer, rail lines, and 
other inter-modal transportation systems, or water and wastewater 
treatment plant upgrades are needed to support the increased usage. New 
and/or expanded access roads are also needed to support industrial/
business/commercial parks.

             APPALACHIAN DEVELOPMENT HIGHWAY SYSTEM (ADHS)
    In 1964, the President's Appalachian Regional Commission (PARC) 
reported to Congress that economic growth in Appalachia would not be 
possible until the Region's isolation had been overcome. Because the 
cost of building roads through Appalachia's mountainous terrain was 
high, the Region had never been served by adequate roads. Its network 
of narrow, winding, two-lane roads, snaking through narrow stream 
valleys or over mountaintops, was slow to drive, unsafe, and in many 
places worn out. When the Interstate system was built, large areas of 
Appalachia were simply bypassed, compounding the problems of the 
Region's troubled economy.
    The PARC Report and the Appalachian governors placed top priority 
on a modern highway system as the key to economic development. Today 
the resulting Appalachian Development Highway System (ADHS') is the 
backbone of ARC's cooperative regional approach to problem solving and 
of all its other development efforts.
    By mid-1965, the 13 States, working together, had mapped out most 
of the system; ground was broken for the first highway corridor in July 
1965. Between 1965 and 1980, Congress authorized a plan for a 3,025-
mile highway system combining new construction with improved existing 
roads.
    The ADHS in Ohio as of September 30, 1999:

------------------------------------------------------------------------

------------------------------------------------------------------------
Total Number of ADHS Miles................  303.6 miles
Number of ADHS Miles Eligible for Funding.  201.7 miles
Number of ADHS Miles Open to Traffic......  161.6 miles
Miles Remaining to Be Completed...........  40.1 miles
Estimated Cost to Complete (Federal and     $391.8 Million
 State Funds as of September 30, 1996).
------------------------------------------------------------------------

    Ohio was apportioned $22,008,205 from TEA-21 for use on the ADHS 
corridors for both Federal fiscal year 1999 and FY 2000. Ohio obligated 
$ 19.4 Million in TEA-21 funds for FY 1999. In addition, Ohio received 
$1,125,000 in Demonstration Funds from Section 1602 of TEA-21, 
($562,500 for Corridor B and $562,500 for Corridor C1) in FY 1999 and 
$1,350,000 in Demonstration Funds from Section 1602 of TEA-21 ($675,000 
for Corridor B and $675,000 for Corridor C).
                               __________
    From 1998 to mid-1999, over 3,000 jobs had been lost or were in the 
process of being lost in Regions 7 and 11. Below is an updated list 
from 1999 through 2001.

----------------------------------------------------------------------------------------------------------------
               Company                          County                 Jobs Lost                  Status
----------------------------------------------------------------------------------------------------------------
Trinity Industries...................  Brown..................  200....................  Closing July 2000
Goodyear.............................  Hocking................  600....................  Closed October 1999
Internet.............................  Lawrence...............  619....................  Closed March 2000
Cabletron............................  Lawrence...............  300....................  Closed March 1999
Allied Signal........................  Lawrence...............  48.....................  Layoffs in May 1999
Southern Ohio Coal...................  Meigs..................  830....................  Tentative closure in
                                                                                          2001
Consol Coal..........................  Monroe.................  300....................  Layoffs 1998; closed
                                                                                          mid-1999
Ormet Corp...........................  Monroe.................  270....................  Layoffs in June 2000
                                                                                          (hopefully temporary)
Central Ohio Coal....................  Noble/Morgan...........  230....................  Layoffs in 1999 closure
                                                                                          planned for 2000
USEC.................................  Pike...................  1,900..................  Closure by June 2001
Kenworth/Paccar......................  Ross...................  300+...................  Layoffs in July or
                                                                                          August 2000
Eramet...............................  Washington.............  70.....................  Layoffs by end of 2000
                                      --------------------------------------------------------------------------
    Total............................   ......................  5,667 Jobs.............

----------------------------------------------------------------------------------------------------------------
We calculate 5,667 direct jobs are being lost, which is over 22 percent of Total Manufacturing Employment in the
  10 affected Counties. The jobs being lost are high paying (mostly union) jobs. Given that these jobs are some
  of the few value-added jobs in the region, they support many retail, service and government jobs (a multiplier
  as high as 5-to-1 for mining jobs). The effect of the loss of these jobs will be devastating to the region.
  Very, very few high-wage jobs are being created in the region to replace these jobs. We cannot state
  emphatically enough just how critical the situation is becoming in southern Ohio. We fear that when the
  economy turns down, the situation will deteriorate further.
```