A Stronger Appalachian Regional Commission Vital to Economic Progress

By Ted Boettner and Stephen Herzenberg 

Ted Boettner is a Senior Researcher at the Ohio River Valley Institute
Stephen Herzenberg is Executive Director of the Keystone Research Center

For much of its history, the Appalachian region has lagged the rest of the nation in measures of economic prosperity, health, education, and infrastructure. The region, especially central Appalachia, has been rich in natural resources like coal, timber, oil, and gas. Much of the wealth generated by these resources, however, left the region.  As such, much of Appalachia has undergone a process of “growth, without development” that resulted in intense poverty and economic struggles that made Appalachia “a region apart- geographically and statistically.”  

In the late 1950s, these challenges led the governors of Appalachia to push for the creation of a new regional development program and federal agency to address the need for economic diversity, more infrastructure, better health and education, and more jobs. These efforts culminated in the creation of the Appalachian Regional Commission (ARC) in 1965. The purpose of the ARC is to make substantial investments in the region to improve infrastructure, reduce dependency on natural resource extraction, and enhance the ability of the region to achieve economic prosperity. 

A new brief written as part of the ReImagine Appalachia campaign shows that the economic gap between Appalachia and the rest of the country has closed dramatically since the creation of the ARC. The poverty rate in the region has been cut in half from nearly 31 percent in 1960 to 15.2 percent in 2015-19 (compared a U.S. drop of 22 percent to 13.4 percent) and the counties in the ARC region have closed the gap with the nation as a whole on many other social and economic indicators. 

Despite this progress, as the chart shows, ARC funding has fallen dramatically over time—from over $800 million (in inflation-adjusted 2021 dollars) in the early 1970s to under $200 million in recent budgets. (While the chart shows non-highway funding, highway funding has also fallen although not quite as much.) If ARC funding had kept pace with the growth of GDP, which has more than tripled since the early 1970s, it would now be over $2.5 billion annually, not less than $200 million. The dramatic reduction in ARC funding is despite the agency’s reputation in its heyday as a “can-do” agency that improved hospitals, roads, and vocational schools, and created jobs. Funding cuts forced the ARC since the 1980s to narrow its focus mostly to job creation.

In the final step of federal infrastructure debates, an opportunity exists to provide additional funding to ARC. Congress could incorporate in the omnibus Build Back Better Act the substance of a bipartisan bill introduced by Pennsylvania Representative Conor Lamb (PA-17) and Kentucky Representative David McKinley (WV-01), the REPOWER Act (Resources to Expand Partnerships for Opportunity and Workforce and Economic Revitalization Act). This would provide $1 billion more over five years for ARC “POWER” grants, which provide federal resources to help communities affected by job losses in the coal industry. That $200 million per year is a modest amount compared to the $600 million per year reduction over time in annual funding of ARC through the budget—and even more modest compared to $2.5 billion per year.

Incorporating the REPOWER Act within a final Congressional package would help ensure that coal country Appalachia receives its due share of resources from federal infrastructure legislation. In this legislation and in the entire package, Appalachia deserves a due share that recognizes the region’s remaining persistent poverty, the loss of fossil-fuel and manufacturing jobs, and the damage from extraction to land, air and water. Making sure that the REPOWER Act’s $1 billion are part of the final deal is also another opportunity for Senator Joe Manchin of West Virginia to exercise his leverage in final negotiations to change the future of his state for the better. 

Read the full brief: