An initiative aimed at boosting the hard-hit economy of Eastern Kentucky held its annual meeting Friday to showcase the region’s potential even as a new report spelled out the big challenges it faces.
Of the 54 counties in Kentucky classified as part of Appalachia, 37 are economically distressed, the Appalachian Regional Commission said in a report released Thursday.
That means they rank in the bottom 10 percent of the 3,113 counties in the United States, based on a comparison of factors that include the poverty and unemployment rates, the report said.
The poverty rate in Appalachian Kentucky from 2011 to 2015 was 25.8 percent, compared to 15.5 percent nationally, and per-capita market income in the region in 2015 was $19,204, when the national level was $39,778.
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One reason for the region’s continued economic malaise is the loss of about 10,000 coal jobs since early 2011. That’s more than half the coal jobs that existed that year. Those losses have spread through the economy to hurt other employers and local government revenue.
That is the landscape facing the regional development initiative called Shaping Our Appalachian Region, or SOAR.
“It’s a huge challenge,” said U.S. Rep. Hal Rogers, a Republican who represents Eastern and Southern Kentucky.
Employers in the region would have to hire 30,000 people to move counties out of distressed status, said Jared Arnett, executive director of SOAR.
The initiative held its annual meeting Friday in Pikeville, with an estimated 1,200 people attending to discuss ways to improve the region.
Rogers and then-Gov. Steve Beshear, a Democrat, set up the initiative in 2013 to generate ideas to diversify the regional economy as coal jobs plummeted.
Competition from cheap natural gas for power plant customers, proposals for tougher rules to protect air and water quality, tepid demand from China, and other factors have hurt the coal industry.
The job losses have been concentrated in Central Appalachian counties that have relatively few other good-paying jobs in the private sector.
But SOAR participants said there is promising work going on to train workers, increase cooperation on diversifying the economy and bring in new jobs.
“We have people coming from our own ranks, people coming forward with their own ideas,” said Gov. Matt Bevin, a Republican who now co-chairs SOAR with Rogers. “The reality is we’re putting seeds in the ground.”
Some of those ideas were showcased at the meeting Friday, including efforts to expand substance-abuse treatment, add jobs in tourism and food production, and improve health.
For instance, Jonathan Webb, head of AppHarvest, said he hopes to begin construction soon on the company’s project to build a giant greenhouse in Pike County on a surface mine that was reclaimed as an industrial site. The goal is to produce the first tomato crop in fall 2018, Webb said.
When the state approved incentives earlier this year for the project worth as much as $2.5 million, officials said it would create 140 jobs.
Another initiative, Teleworks USA, has created more than 1,000 jobs since early 2015 for people to work from their homes or from local hubs fielding customer-service calls, said Jeff Whitehead, head of the Eastern Kentucky Concentrated Employment Program.
One key push of the SOAR initiative is a project to build a high-speed internet network across the state, called KentuckyWired. The project will provide an access point to broadband in each county, but other providers will have to extend the service to individual homes and businesses — what's called “last mile” service.
Supporters say the network will help improve education and health care and help businesses and individuals better compete as the digital economy becomes more important.
“There are countless numbers of opportunities” that come with access to broadband, Whitehead said.
Officials first estimated the network would be up and running in Eastern Kentucky by April 2016, but that was overly optimistic. Getting agreements to install fiber-optic cable for the network on existing utility poles has been more time-consuming than officials first thought.
Phillip Brown, head of the Kentucky Communications Network Authority, said engineering work on the network is nearly complete and there are agreements in place covering all but 4,400 of the 88,000 poles that will carry the wire.
“We are going to finish the project,” Brown said.
The timetable, though, is not yet clear.
In addition to increasing broadband access, SOAR’s blueprint includes training workers; creating and expanding small businesses; improving health in a region beset by high rates of diabetes, heart disease and other problems; boosting industrial employment; creating a local-foods movement; and establishing the state’s Appalachian region as a tourism destination.
The initiative fosters collaboration to tackle that work, Arnett said.
Arnett said he sensed more optimism about the future of the region at Friday’s meeting. Hope has grown from “cooperation, multiple successes and a vision with a workable plan to make it a reality,” he said.