Article – Southeast Kentucky’s Promise Zone officially announced by President Obama28 January 2014
9 January 2014
James R. Carroll
A new special economic development zone for eight high-poverty counties in southeastern Kentucky announced by President Barack Obama on Thursday can be a key part a broad strategy to reverse decades of distress in the region.
That’s the hope of community leaders and public officials.
But they cautioned that the problems are deeply rooted and will require considerable time to change.
“This is a tough area we’re trying to address,” said Jerry Rickett, president of Kentucky Highlands Investment Corp., a 45-year-old community development financial institution that will serve as the lead entity in the new zone.
“The challenge has been multiplied by the loss of energy jobs we’ve had in Eastern Kentucky,” he said. “This will certainly give us an advantage and a rallying point as we try to address that.”
Before local officials gathered in the White House’s East Room, Obama announced that southeastern Kentucky and four other areas would be the nation’s first “Promise Zones,” areas that would get federal priority for economic assistance, job creation, student training and other initiatives. The others are in San Antonio, Philadelphia, Los Angeles and the Choctaw Nation of Oklahoma.
The designated communities will receive preferential consideration for 25 federal grant programs and the federal government will provide direct technical support.
“It’s one thing to say we should help more Americans to get ahead, but talk is cheap,” the president said. “This should be a challenge that unites us all.”
Kentucky’s zone will cover Bell, Clay, Harlan, Knox, Leslie, Letcher, Perry and Whitley counties. The counties, which have a combined population under 200,000, have an average poverty rate of more than 30 percent, according to Rickett’s firm.
Officials said there was not a specific job-creation or investment goal as of yet. But being a Promise Zone should prove an asset in attracting government and private resources, they said.
“The broad ranging partnership can’t simply be qualified by dollars and cents,” Kentucky Gov. Steve Beshear said. “The designation is akin to gaining a vocal and effective advocate in the federal government to help our region rewrite its future.”
“We need short-term attention, short-term investment and acknowlege that it’s a long game,” said Justin Maxson, president of the Mountain Association for Community Economic Development, which serves 54 counties in Appalachian Kentucky. “It’s encouraging, it’s hopeful, it’s important that the federal government is willing to make additional investments in the region.”
Senate Minority Leader Mitch McConnell and Sen. Rand Paul, as well as Rep. Hal Rogers, all Kentucky Republicans, attended the White House announcement.
McConnell and Paul are sponsoring legislation to create “economic freedom zones” in distressed areas, a concept similar to the Obama administration’s program.
Under their proposal, small businesses would be exempt from some federal regulations and be subject to more favorable tax treatment.
McConnell said in a floor speech Thursday that much of the economic trouble in Eastern Kentucky is due to Obama’s “war” on coal.
“But the Promise Zone designation is a step in the right direction nonetheless,” the senator said. “… We’re encouraged that the president is finally focused on a concrete approach to jobs that members of both parties can support.”
Paul said Obama’s motives are good but the program should put more emphasis on tax cuts than on government grants. He said “dramatic” reductions of taxes across the board would enable communities to keep more of their own money and invest in themselves.
“I’m not asking Houston to bail out Appalachia,” Paul said. “I’m allowing Appalachia to bail themselves out.”
Rogers, whose district includes the eight counties, praised the zone designation, saying: “This program shows promise for recruiting private industry in several of our hard-hit counties.”
Obama is also calling on Congress to establish tax breaks for companies that establish businesses or hire workers in the Promise Zone communities. Such breaks are critical to the success of the new zones, his advisers said.
Courtesy of Courier Mail