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Inside Information: July–December 2003 Issue


ARC Fiscal Year 2004 Funding Approved; New ADHS Funding Legislation Under Way

On December 1, President George W. Bush signed into law the Energy and Water Development Appropriations Act, 2004 (P.L. 108-137), which includes $66.0 million for the Appalachian Regional Commission's area development programs in fiscal year (FY) 2004. ARC's FY 2003 area development funding was $70.9 million.

On November 12, the Senate Environment and Public Works Committee approved a new multi-year highway bill that would authorize $590 million per year for work on the Appalachian Development Highway System (ADHS). The measure would replace the Transportation Equity Act for the 21st Century (TEA-21), which has been extended through February 29, 2004. The annual ADHS funding level under TEA-21 was $450 million per year. Action by the full Senate on the highway bill is expected in early 2004. The House has not yet taken up the bill.

ARC Launches Planning Process For Five-Year Strategic Plan

In December, the Commission formally launched a new comprehensive strategic planning process to help guide economic and community development work in the Appalachian Region over the next five years. The process, which will culminate in the adoption of a written strategic plan by the Commission in July 2004, will solicit input from citizens and state and local partners on the challenges and opportunities facing Appalachia to help the Commission determine regional investment strategies. In the first stage of the process, to be completed in late April, Commission partners will gather information and input by conducting a comprehensive review of socioeconomic changes in the Region; researching key development issues; holding consultations with ARC state partners and advisory councils; and conducting field forums across the Region and in Washington, D.C., with citizens, representatives of private, public, and nonprofit organizations, and local development district officials. Updates on the strategic planning process will be provided on ARC's Web site at

Interagency Coordinating Council on Appalachia Meets in Washington

The new Interagency Coordinating Council on Appalachia, chaired by ARC Federal Co-Chair Anne B. Pope, held its first meeting December 3 in Washington, D.C. Attendees included representatives from 15 federal agencies that conduct national economic development programs. The council, whose creation was mandated by ARC's 2002 reauthorization legislation (the Appalachian Regional Development Act Amendments of 2002), aims to help agencies work together to maximize the benefits of resources they invest in the Region. The initial meeting included an ARC overview of the state of the Appalachian economy and a review of participating agencies' initiatives in the Region. The council's next meeting will be held in Washington in April.

ARC and Federal Communications Commission Partner to Expand Telecommunications Access in Appalachia

A partnership between the Appalachian Regional Commission and the Federal Communications Commission (FCC), announced October 16 at the ARC Telecommunications and the Future of Appalachian Communities conference, will help expand Appalachian access to telecommunications services, including high-speed broadband Internet access. As a first step, the two agencies will work together to identify distressed areas of the Appalachian Region in which low-income households would qualify for the FCC's Lifeline Assistance and Link-Up America outreach programs. These programs provide discounts on telephone installation and basic monthly phone service to qualifying consumers.

As part of the new ARC-FCC effort to establish and expand modern telecommunications services in the Region, ARC Federal Co-Chair Anne B. Pope, FCC Chairman Michael K. Powell, and other officials attended a demonstration of telemedicine applications at the University of Virginia in Charlottesville on November 7. The event included a demonstration of health-care services provided through the Commonwealth of Virginia's 47-site telemedicine network, a system of hospitals, community health centers, schools, clinics, and other facilities that provide access to specialty care and preventive health services not locally available to rural and Appalachian citizens. ARC and the FCC are working to hold field hearings and other activities to address access issues in Appalachia.

ARC Helps Launch New Southern Appalachian Venture Capital Fund

A new $12.5 million venture capital fund, supported in part by ARC, will provide equity capital and operational assistance to emerging and expanding businesses in southern Appalachia. The Southern Appalachian Fund's launch was announced October 7 at the Tennessee Valley Corridor Regional Economic Summit by U.S. Senate Majority Leader Bill Frist, U.S. Congressman Zach Wamp, Tennessee Valley Authority Director Bill Baxter, and ARC Federal Co-Chair Anne B. Pope. The fund, which focuses specifically on companies in Kentucky, Tennessee, and the Appalachian counties of Georgia, Alabama, and Mississippi, is one of six New Markets Venture Capital Companies in the United States. In addition to ARC, investors include the Tennessee Commerce Bank, the Tennessee Valley Authority, the U.S. Small Business Administration, the F.B. Heron Foundation, and the John D. and Catherine T. MacArthur Foundation. The fund will invest from $200,000 to $600,000 in each of its portfolio companies.

New Kentucky, Mississippi Governors Join Commission

As a result of November's gubernatorial elections, the Appalachian Regional Commission will have two new members in 2004. Kentucky Governor Ernie Fletcher, who took office on December 9, is ARC's newest member. On January 13, Mississippi governor-elect Haley Barbour will join the Commission as he takes office.

Governor Fletcher began his career in public service in 1994, when he was elected to represent Kentucky's 78th district in the state House of Representatives. During his term in office he served on the Kentucky Commission on Poverty and on the Task Force on Higher Education. Fletcher was elected to represent Kentucky's Sixth Congressional District in 1998, serving on the House Committee on Energy and Commerce and as chairman of the House Policy Committee's Subcommittee on Health. Prior to his political career, Fletcher was a family-practice physician for 12 years and also served for two years as CEO of the St. Joseph Medical Foundation. He graduated from the University of Kentucky College of Engineering in 1974, and, after serving in the United States Air Force, received his medical degree from the University of Kentucky College of Medicine in 1984.

Governor-elect Barbour was formerly chairman and CEO of the government-relations firm Barbour, Griffith, and Rogers, which he founded in 1986. He began his career in law, serving as an attorney with the firm Henry, Barbour, and DeCell from 1973 until 1985. He was the Republican nominee in Mississippi for the U.S. Senate in 1982. Barbour served as director of the White House Office of Political Affairs for two years under President Ronald Reagan. From 1993 until 1997 he chaired the Republican National Committee. A former senior adviser and regional coordinator for the presidential campaigns of George H.W. Bush and Gerald Ford, respectively, Barbour chaired George W. Bush's presidential campaign advisory committee in Washington in 2000 and was one of ten members of then-Texas governor Bush's presidential exploratory committee in 1999. Barbour received a law degree from the University of Mississippi in 1973.

Commission Welcomes New States' Washington Representative, Program Operations Division Director

ARC's Washington, D.C.–based Program Operations Division and its Office of the States' Washington Representative have recently gained new leadership.

The Commission will welcome new States' Washington Representative Cameron Whitman on January 5, 2004. Whitman takes the post vacated by George W. "Bill" Walker, who retired from the Commission in October. She has most recently served as director of the Center for Policy and Federal Relations at the National League of Cities in Washington, D.C., managing federal advocacy and policy development programs on issues including economic and community development, housing, natural disaster relief, and tax incentives. Whitman had previously served as the National League of Cities' chief legislative counsel and as field director for the Federation for American Immigration Reform in Washington.

Faye Kann, former executive director of the Northeast Council of Governments in Aberdeen, South Dakota, joined the Commission staff on October 27 as the new director of the Program Operations Division. She replaced director Judy Rae, who retired from the Commission in May. In her Northeast Council of Governments post, which she had held since 1989, Kann oversaw the provision of planning, management, and professional development services to local governments in 12 counties, as well as the administration of local programs and projects in areas including job creation and business development, health care, infrastructure, telecommunications, and water and sewer services.

Commission to Publish Fiscal Year 2003 Performance and Accountability Report

On January 30, 2004, ARC will release its fiscal year 2003 performance and accountability report (PAR), prepared in accordance with Office of Management and Budget guidelines. The PAR replaces ARC's annual report. It will be available to the public on ARC's Web site at

For current news updates, visit ARC's Web site at

Conference Showcases K–12 Education Resources

Eighteen federal agencies and other organizations shared information on resources they can offer Appalachian schools and educators at the Federal Showcase of K–12 Education Resources, held November 7 on the campus of Morehead State University in Morehead, Kentucky. The conference drew more than 160 attendees from 12 Appalachian states, most of them educators from rural areas and two-thirds of them from economically distressed counties.

The showcase included presentations highlighting 22 different programs. Several of the programs offer grants; others offer technical assistance, materials, and other forms of nonfinancial aid at little or no cost. The conference was sponsored by the Appalachian Regional Commission and the Federal Interagency Committee on Education (whose members include 10 Cabinet-level federal agencies), in cooperation with the Kentucky Association of School Administrators, the professional organization for more than 2,500 educational leaders across Kentucky; and AEL, Inc., which operates a U.S. Department of Education Regional Educational Laboratory in Appalachia.

ARC Alternate Federal Co-Chair Richard J. Peltz opened the conference sessions with a reminder that coordinating interagency resources and helping economically distressed areas take advantage of them has been, and remains, an important part of ARC's mission. He was introduced by Ronald G. Eaglin, president of Morehead State University.

"We want to get the word out," Peltz said, "about all the opportunities that exist through the federal government. We are about communications and partnerships. We're about relationships, interactions, and laboratories."

Commenting on billboards along Kentucky highways that say, "Education Pays," Peltz said that Kentucky during the past decade had confirmed its commitment to that assertion. He added that many of the ideas and programs now available nationally had been tried and tested within Appalachian counties of that state.

Since its founding, Peltz reminded his audience, ARC has been charged with promoting economic development by creating opportunity. Just as highways and other material infrastructure provide physical resources, education and related community initiatives provide intangible resources.

Tom Luna, executive director of the U.S. Department of Education's Rural Education Task Force, provided the intellectual and policy framework for federal education efforts with a description of the No Child Left Behind Act of 2001 (NCLB) and information on how a record level of over $53 billion in federal support for education would be targeted. He emphasized the NCLB's implications for rural areas.

NCLB, Luna said, is based on four principles: accountability, local control of federal education funding, funding what works, and increasing parental choice when schools fail to deliver acceptable results. He cited historical evidence that the kinds of accountability mechanisms in place at state levels tend to shape local educational institutions. For example, simply enforcing school attendance was once a major challenge, especially in rural areas where children and young people were needed for work on family farms and other family-owned enterprises. That problem was solved in large part because state funding formulas reward high average daily attendance rates and penalize toleration of delinquency. Today's challenge, Luna continued, is to reward high academic achievement and penalize low achievement.

"We have perfected 'attendance' [as a measure of school performance]," Luna said. "If my daughter misses one high school period today, I'll get a phone call. But if she gets a 'D' or an 'F' on a test, I may not find out about it for weeks. That's because we have a system of education in which attendance is mandatory but learning is optional."

Luna commented on the circular relationship of quality education and a strong local economy and how the two reinforce each other. Adequate support for education requires a strong economy, but a strong economy depends in turn on a strong K–12 educational system. Increasingly, he added, the public and policy makers must think in terms of a K–14 or K–16 system.

Dan Branham, dean of the College of Education at Morehead State University, speaking at the conference luncheon, encouraged participants to appreciate how much progress rural Appalachia has made within recent decades. Branham drew on 30 years' experience in education as a teacher, a school superintendent, and a staff member of the Appalachia Educational Laboratory in Charleston, West Virginia. He began by describing a small rural school where, roughly 20 years ago, personnel decisions were based on politics and favoritism.

Citing the dramatic impact of the Kentucky Education Reform Act, Branham offered an optimistic assessment that high expectations are prevailing and that schools will continue to "move beyond looking at status indicators to looking at outcomes."

He closed with an account of a recent meeting at that same rural school. The school atmosphere had changed: trophies awarded for high scholastic achievement filled display cases in the school lobby, and talk among parents was about academic performance rather than sports. That school was already only a few percentage points away from hitting performance goals that would not become mandatory until 2014.

"Money makes a difference," Branham concluded. "Dedicated school leaders make a difference. Clear goals make a difference."

Agency-sponsored presentations at the conference's concurrent sessions provided information on resources to match a wide range of local educational needs and interests.

Resources for upgrading science, math, and technology curricula are extensively available. They include instructional materials, lesson plans, and support for hands-on activities from the Department of Defense, the Department of Energy, and the Department of the Interior, as well as from the National Science Foundation and NASA. Still other agencies promote institutional partnerships (for example, the Institute of Museum and Library Services).

For schools and communities prepared to tackle difficult problems, the Department of Justice offers both grants and help with technical assistance. These include programs to mentor at-risk youth and to combat substance abuse. Non-governmental organizations, including the National Science Center (Augusta, Georgia), which brings a mobile hands-on science learning center to schools; the Erma Ora Byrd Center for Educational Technologies (Wheeling, West Virginia); and the National Science Teachers Association (Arlington, Virginia) focus on education outreach, teacher training, and professional development.

Agencies and Organizations Represented
at the Federal Showcase of K–12 Education Resources

U.S. Department of Agriculture
U.S. Department of Defense
U.S. Department of Education
U.S. Department of Energy
U.S. Department of the Interior
U.S. Department of Justice
Institute of Museum and Library Services
U.S. Mint
National Aeronautics and Space Administration
National Science Foundation
Erma Ora Byrd Center for Educational Technologies
Challenger Learning Center of Kentucky
Challenger Learning Center at Wheeling Jesuit University
The GLOBE Program
Lewis and Clark Rediscovery Project
MarcoPolo Education Foundation
National Science Center
National Science Teachers Association