Impoverished portion of southeast Kentucky to get priority for federal money

bestep@herald-leader.comJanuary 8, 2014 

An area of southeast Kentucky struggling with chronic poverty and the loss of thousands of coal jobs will get priority when seeking federal money for job training, education, housing and other programs, the White House announced Wednesday.

An eight-county area of Eastern Kentucky has been chosen for the Promise Zone program, according to the White House.

The designation will not include a big pot of new federal money, but it will give the counties priority for funding through existing programs and special help from federal officials in applying for money and coordinating efforts to fight poverty, according to the White House.

Obama also has proposed giving tax breaks to businesses in such zones as a tool to boost hiring, though Congress has not approved such incentives.

The counties in the zone are Bell, Harlan, Letcher, Perry, Leslie, Clay, Knox and part of Whitley, according to Jerry Rickett, president and chief executive officer of Kentucky Highlands Investment Corporation.

Kentucky Highlands took the lead in applying for the program and will work with several partners, including the University of Kentucky, Eastern Kentucky University, Berea College and the East Kentucky Concentrated Employment Program.

The zone had to meet certain poverty levels and have fewer than 200,000 residents, which is why part of Whitley County was not included.

President Barack Obama announced the Promise Zone program a year ago, saying the country needs to "build new ladders of opportunity" in poor areas. The zone in Kentucky is among the first five announced. The others are in Los Angeles, Philadelphia, San Antonio and a Native American reservation in Oklahoma.

The announcement Wednesday was chosen to correspond with the 50th anniversary of President Lyndon B. Johnson's 1964 State of the Union speech in which he called for "unconditional war on poverty in America."

Gov. Steve Beshear, who was briefed on the designation ahead of Wednesday's announcement, said the Promise Zone program will be part of a broad combination of actions needed to boost the region's economy.

"The Promise Zone is a very exciting and important component of that path for success that will make an accelerated positive impact on the future of Appalachia," Beshear said in a statement. "This is a rare opportunity, and I am excited about the prospects for our people and our state."

Beshear said the initiative will complement another called SOAR, for Shaping Our Appalachian Region, that he and Republican U.S. Rep. Harold "Hal" Rogers set up with the goal of drafting a development strategy for Eastern Kentucky.

Bell County Judge-Executive Albey Brock said he was thrilled his county was included in the Promise Zone program. The area needs help to deal with the downturn in the coal industry, he said.

"Something like this is a shot in the arm,'' said Brock, a Republican.

The plan for Kentucky's Promise Zone includes a $1.3 million loan fund for small businesses; expanded job and entrepreneurship training; college- and career-readiness programs in high schools; and increased technical-education programs, according to the White House.

The program also envisions working to improve housing and reduce crime.

Berea College already is working in Clay County — as well as Jackson and Owsley — to try to boost student achievement under a federal grant of up to $30 million that it won in 2011.

The federal departments of Housing and Urban Development; Education; Justice; and Agriculture, which funds infrastructure projects, are participants in the Promise Zone program, so there are several potential sources of money the eight counties can tap.

Part of the idea is to better coordinate federal, local, non-profit and private-sector investments.

Administration officials said a total of 19 urban areas, eight rural areas and four tribal areas applied for the first set of Promise Zone designations.

The administration plans to choose a total of 20 areas over the next few years.

The need in Eastern Kentucky is evident. The poverty rate in the area is significantly lower than when Johnson announced the War on Poverty in 1964, but is still much higher than the national level.

From 2007 through 2011, the national poverty rate averaged 14.3 percent, but it was 24.8 percent in Eastern Kentucky, according to the Appalachian Regional Commission.

It was even higher in most counties included in the new Promise Zone designation.

The poverty rate in seven of the eight counties exceeded 25 percent from 2007 through 2011, with several topping 30 percent, the ARC said.

Most of that period was before a sharp downturn in the Eastern Kentucky coal industry wiped out 6,000 jobs the last two years.

Rickett said the ultimate value of the Promise Zone program to the eight counties won't be known for some time, but it represents a real opportunity to boost the region.

"We'll do our dead-level best to exploit the opportunities they give us," he said.

Bill Estep: (606) 678-4655. Twitter: @billestep1

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