Promises to coal country aside, Trump’s budget cuts will end an economic lifeline

The Appalachian Regional Commission helps to create jobs and improve economic fortunes of “distressed counties” in West Virginia and Kentucky.

Image credit: Jimmy Emerson via Flickr

Last week, President Trump proposed eliminating 19 federal agencies, including some high-visibility cultural icons like the Corporation for Public Broadcasting and the National Endowment for the Arts. But among the smaller agencies he suggests getting rid of are the economic lifelines for three regions of the country struggling with high levels of poverty and unemployment.

The Appalachian Regional Commission, centering on the coalfields of West Virginia and Kentucky, currently has a budget of $119 million. The Delta Regional Authority, which includes counties on both sides of the Mississippi River from southern Illinois to Louisiana, has a budget of $45 million. The Northern Border Regional Commission, which supports counties along the Canadian border from Maine to New York, has a budget of $7 million.

One of the fundamental ideas behind these regional commissions is that some economic issues, which affect multiple states, are too big for one state government to take on but too localized for traditional federal policy to be effective. A regional commission provides a partnership between the federal government and all the affected states.

So how do these agencies improve the lives of their regions’ people? What’s at stake if Trump’s budget cuts succeed?

Peter Hille has been building projects in eastern Kentucky with funding from the Appalachian Regional Commission for 27 years. He’s currently the executive director of the Mountain Association for Community Economic Development, which is using an ARC grant to help laid-off coal workers transition to jobs in energy efficiency. He spoke to us about his experiences working with ARC.

This interview has been edited for length and clarity.

Trimarco: How did you first hear about the Appalachian Regional Commission?

Hille: In 1990, I took a job at Berea College, with the Brushy Fork Institute, and Brushy Fork was created to do leadership and community development in Appalachia. The Appalachian Regional Commission was one of our early supporters. I was at Brushy Fork for 22 years and was executive director there.

A lot of the funding we had was for a program called the Flex-E-Grant program, which was specifically for what’s called “distressed counties” – places that fall into the bottom 10 percent of counties, nationwide, in terms of per capita income, percentage of families below the poverty level, and the three-year average unemployment rate.

Trimarco: What did Brushy Fork do to help those people?

Hille: The idea with the Flex-E-Grants was to get small amounts of federal funding right down to the grassroots in communities. And those people did all kinds of innovative stuff with that money – everything from park cleanups to walking trails to improving some local facilities, exercise programs, projects with kids. We were always learning that they knew much more than we did about what was important and possible in their communities.

Trimarco: How does that kind of program create jobs?

Hille: You can only do economic development if it is supported by all the layers underneath it – you need leadership development, organization development, and community development first. So when you ask, “Does this create jobs?” – it’s yes and no. It doesn’t create jobs explicitly, but it’s an essential precondition to creating jobs.

Eventually, though, you’ve got to create jobs. You can only do so many park cleanups, beautifications, signs, brochures about the community. If there’s not any jobs, people are going to go away.

Trimarco: Five years ago, you transitioned from Brushy Fork doing economic development work at the Mountain Association for Community Economic Development. What’s that been like?

Hille: It’s been tough. Eastern Kentucky suffers from deep economic distress that is the result of a mono-economy and a resource extraction economy. Economists talk about how resource extraction economies tend to not build durable wealth and assets in a region but actually create poverty because you are literally extracting the value. And they tend to starve out other economic initiatives that would create a more diverse, sustainable, and resilient economy.

We describe our work at MACED as helping to shape the just transition to a new economy for post-coal Appalachia. That means respecting the contribution that regions like this have made to building the economy we have today. We owe a debt to help these regions, so we should approach the economic transition in a way that helps to level the playing field. That’s why the investments that we’re seeing right now from the federal government are so critical. They are based in that understanding of just transition.

In 2015, MACED was fortunate to get just over $2 million for projects that include a series of 12 internships for displaced coal industry workers to be retrained as energy auditors and energy efficiency retrofit installers. But it’s in two phases: The first phase builds a market so that these workers can find jobs once they’re trained.

Trimarco: How do you do something like that?

Hille: We have a residential energy efficiency program called How$mart Kentucky. In that program, we partner with six rural electric cooperatives and we send trained staff to go to a house, literally put a blower-door on the front door – which is a big fan that they attach to the front door of the house. The fan sucks on the house, and they use it to determine what the degree of air leakage is in the house. Then the homeowner can pay for energy efficiency upgrades in payments that appear on their power bill.

We also do energy efficiency audits for businesses. We did a lighting retrofit for a commercial warehouse a couple years ago where they’re now saving a couple hundred thousand dollars a year. And it’s going to pay for itself in two years. They just got a hundred thousand dollars a year in gravy to their bottom line.

Trimarco: What do you think the consequences of cutting or eliminating the ARC’s budget would look like?

Hille: It’s the only federal agency that is really paying attention to Appalachia.

Congressman Hal Rogers represents the 5th District of Kentucky, which is the eastern portion deep in the Appalachian Mountains – the coalfields of Kentucky. Rogers, a conservative Republican, said these cuts are “draconian, careless, and counterproductive.” Sen. Mitch McConnell, just within the last few days, also made a statement to the effect that ARC would not be cut.

Trimarco: What’s it like to work with the Appalachian Regional Commission?

Hille: Most federal grants are a pretty cut-and-dried process. That’s not the way it works with ARC. You can call somebody up and have a conversation about what you’re thinking. This $2 million grant that we got from ARC last year, it started with a whole series of conversations. To have that kind of collaborative approach is rare. It’s special.

Trimarco: The Appalachian Regional Commission was created in 1965 under President Lyndon Johnson. Has it been threatened before?

Hille: When Ronald Reagan was president, he was also trying to zero out the ARC. So there’s been this history of presidents trying to zero out the commission, and powerful forces in Congress keeping it in the federal budget. And that’s included voices on both sides of the aisle.

Trimarco: Are people you know doing advocacy to protect the ARC?

Hille: A friend and colleague of mine runs a housing organization deep in the coalfields. And he put up a post on Facebook, just after the White House budget proposal came out, and he led off with “I voted for President Trump.” Then he proceeded to enumerate all the programs they use for their housing work that are slated to be cut. And it just went on and on and on.

So I think you’re seeing people making these kinds of statements to one another. That’s in many ways as important a form of advocacy as what they’re saying to their elected officials.


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