Herald-Leader Editorial

How can E. Ky. rebuild economy? Plan, gumption, leadership

Plan, political gumption, leadership

October 23, 2013 

Harlan County Judge-Executive Joe Grieshop is right when he says that lots of local people should be involved in economic planning for Eastern Kentucky.

Grieshop also is right when he says the region's "situation will not improve without a major overhaul."

If necessity is the mother of invention, desperation might finally be the progenitor of change in the mountains. Losing more than 5,700 coal jobs in two years is opening minds, even some that belong to beneficiaries of the old status quo.

But how? How do you reverse a century of economic exploitation, outmigration, parochialism and petty corruption? How do you create jobs and opportunity in poor places that have been chained to a single extractive industry?

Can any planning process improve on the patronage-driven decisions and empty industrial parks of the past?

The Mountain Association for Community Economic Development is offering a blueprint that could democratize economic development. The recommendations can be found at maced.org in a report entitled "The Appalachian Planning and Development Fund: Investing in the Economic Future of Eastern Kentucky."

MACED, which has been working on economic development in Central Appalachia for more than 35 years, cites several models for economic planning, including the Kentucky Appalachian Commission that was started in 1993 but defunded in 2004.

Other models are the Big Sky Economic Development Trust Fund in Montana, the Island Coastal Economic Trust in British Columbia and Kentucky's Agricultural Development Fund.

But even if an accountable democratic process could produce a smart strategy, the plan won't fly without money behind it.

MACED proposes diverting coal severance tax money already being spent in Eastern Kentucky to fund regional economic planning. MACED also recommends setting aside part of the severance tax in a permanent trust fund to seed future economic development.

"Severance tax funds spent on one-time expenditures or on projects disconnected from other work in the region do little to promote long-term development. A new strategic plan for Appalachian Kentucky will build on the region's numerous assets, help communities engage in their own planning and guide severance tax and other expenditures. While there may be many worthy projects, public dollars should support investments that connect to a larger development plan."

Kentucky has other ways to generate seed money for a new mountain economy but they would take political gumption.

The legislature could raise the tax on mined coal from the current 4.5 percent of gross value to the 5 percent levied in West Virginia.

The legislature also could modernize the tax code to capture growth in a 21st century economy. Then the state could afford to send more coal-tax money back to the places that produce it.

A functioning Congress would see the value — and justice — in helping a place and a people whose resources and labor fueled a century of American growth. And the federal Abandoned Mine Lands fund also could be better used.

Ultimately, though, the fate of Eastern Kentucky rests with the people who live there.

Appalachian coal towns and New England mill towns might seem to have little in common. But MACED also cites a 2009 study by the Federal Reserve Bank of Boston into why some mid-size manufacturing cities achieved an economic resurgence. It was not because of location, demographics or industrial mix.

What distinguished the places that bounced back was collaboration and leadership.

It also took time. There will be no quick fix.

Eastern Kentucky deserves help — both short- and long-term — from the state and nation. And the region should borrow best practices from other places.

But success will depend on involving lots of people in home-growing leadership, cooperation and ideas. Nothing else can work. Kentuckians should insist on it.

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