Funding Appalachia’s future
Recommendations for Ohio’s new Appalachian Community Grant Program
Over the past century, the Appalachia region of Ohio helped fuel the prosperity of the nation. I mean that literally. Natural resources from the Ohio River Valley states of Appalachia, including Ohio, powered the industrial revolution in this country. However, having long been exploited by absentee corporations in the extractive industry, the region itself remains in poverty, with its lands damaged, and many of its workers and residents left sick.
A new development strategy and vision for Appalachia is long overdue — one that is good for workers, communities and the environment. One that builds local wealth. Given the high poverty rates, low incomes and relatively high unemployment in the region, state and federal resources will be required, and well deserved.
To give credit where credit is due, we must applaud Gov. Mike DeWine for signing into law House Bill 377. The bill creates the Appalachian Community Grant Program that will send $500 million in federal resources to the region, resources initially allocated to the state from the American Rescue Plan Act (ARPA). The law tasks the Ohio Department of Development with using those federal resources to support development of “sustainable, transformational” infrastructure projects across Ohio’s 32 Appalachian counties.
On signing the bill, Gov. DeWine encouraged Appalachians to “let [their] imaginations go.” As the co-director of the Project to ReImagine Appalachia, I kind of wanted to high five the governor. Of course, not all the state’s ARPA dollars allocated by Gov. DeWine share such laudable goals.
Right before he cut off $300 a week from people’s unemployment checks, the governor recommended putting $1.5 billion into the state’s Unemployment Compensation Fund to save employers from having to pay additional unemployment taxes in the future. The General Assembly approved the move, taking the largest share of flexible state ARPA money that could have gone toward better uses, such as building community-labor training programs that enable low-paid workers to get better-paying jobs or making child care more affordable for struggling parents.
Nevertheless, the Appalachian Community Grant Program can help lay the foundation for broadly shared prosperity in the region. It’ll require a major effort from advocates and everyday residents to make sure the money is spent well. We expect the Ohio Department of Development to roll out program criteria soon. I have some thoughts on what those criteria should look like. Most of them relate to what I believe makes a project “economically sustainable” and “transformative,” language used in the enabling legislation of this program.
Background on the Appalachian Community Grant Program
Of the $500 million in ARPA funds allocated to the Appalachian Community Grant Program, up to $30 million will be used for Appalachian planning grants. The remainder will be spent on project development grants, with the bulk going to applicants that first went through the planning grant process.
For Appalachian planning grants, House Bill 377 requires applicants to provide an overview of how their proposed projects will incorporate 1) infrastructure such as main street redevelopment or improvements to outdoor recreational space; 2) workforce training; or, 3) community-based health care services, including those designed to address the region’s ongoing opioid epidemic. These directives are in keeping with federal guidelines for spending ARPA dollars (the source of funds for the program). Federal policymakers designed ARPA to promote an equitable recovery from the pandemic, recognizing low-income households and high-poverty communities were “disproportionately impacted” by COVID-19. A relatively high proportion of Appalachian residents and Appalachian communities qualify as such.
For Appalachian implementation grant applications, House Bill 377 requires the Ohio Department of Development to develop requirements and scoring criteria to evaluate grant applications. It also mandates the Department give priority to projects that 1) have a region-wide impact; 2) are evidence based; 3) include a public-private partnership; 4) are economically sustainable; and 5) would be transformative for the region.
Leveraging federal funds for local success
Since Congress passed a series of infrastructure bills over the past year (which I will collectively refer to as the “climate infrastructure package”), the federal government is in the process of rolling out its own infrastructure resources. Ohio’s Appalachian Community Grant Program can and should be used in a way that helps leverage these federal infrastructure resources. When coupled with the federal climate infrastructure package, and the Biden administration’s commitment to coal communities, there will be very real opportunities to build a 21st century sustainable Appalachia and shared prosperity in the region.
Since the federal government has its own scoring criteria for its competitive grant funds, the state of Ohio would do well to mirror those criteria. This will increase the likelihood that successful state applicants will also be successful federal applicants. Under its Good Jobs Initiative, the Biden administration is prioritizing infrastructure project applications that significantly reduce greenhouse gas emissions, use responsible contractors who pay family-sustaining wages, prioritize coal industry workers for new opportunities, and build career pathways for historically marginalized groups. The state of Ohio should do the same.
In the report Maximizing Value: Ensuring Community Benefits from a Federal Climate Infrastructure Package, I and my coauthors describe a few best practices for how to achieve the goals of the Good Jobs Initiative. For instance, to ensure jobs created from publicly-funded projects are good-paying jobs, the state of Ohio can award points to applicants that incorporate the use of a Project Labor Agreement (a collective bargaining agreement for the duration of construction). One such labor agreement is now being used on the publicly-subsidized Intel project.
In order to build career pathways into jobs with family-sustaining wages, additional points can be awarded to projects offering paid on-the-job training opportunities for apprentices in registered training programs and pre-apprentices from low-income households and high-poverty census tracts. Policy Matters Ohio once worked with a few of our labor, community and environmental partners to draft a win-win community benefit policy for then Cuyahoga County Executive Ed Fitzgerald. It includes a collection of best practices for maximizing the community benefits from publicly subsidized construction projects. While Fitzgerald went on to run for governor before the policy could be enacted, and his successor failed to take up the ordinance, the Community Benefit and Opportunity Initiative is exactly the kind of approach to project development the Biden administration is now seeking as it looks to award competitive grants from the federal climate infrastructure package.
I’m particularly excited about the federal Department of Energy’s recent request that all proposals include community benefit plans, something Ohio officials should also consider doing as part of the Appalachian Community Grants Program in order to promote successful federal applications. In essence, a community benefit agreement is an agreement between project developers and community stakeholders who will be affected by the project. Agreements can include a project labor agreement for fair wages and safety standards, targeted hiring provisions and on-the-job training opportunities for historically marginalized workers and communities, transit accessibility requirements, and offsets for anyone harmed by the project, among other things. Community benefit agreements are designed to ensure the project actually benefits the community where it will be located. A good community benefit agreement has labor, environmental and racial justice representatives at the negotiating table with project developers. The state of Ohio can offer bonus points for applicants that have the right people at the project development table.
Using state grants to help draw down federal funds can help makes a project “economically sustainable.” Encouraging projects that promote good-paying jobs while reducing greenhouse gas emissions and building career pathways for residents living in high-poverty areas can help make a project “transformative.”
Another “transformative” priority for the program would be to encourage the redevelopment of shuttered coal plants and former steel facilities into environmentally friendly industrial parks making the sustainable products of the future—such as battery technology for electric vehicles and renewable energy storage, bio-based alternatives for single-use plastics, and eco-bricks for green building purposes made from the fly ash in coal waste fields. Doing so would help create jobs equivalent to those lost from the decline in the coal industry while promoting local wealth creation within the region rather than reliance on absentee corporations in the extractive industries.
I suspect Gov. DeWine’s Ohio Department of Development is now mulling over similar program requirements and scoring criteria. Let’s let them know that the people of Ohio want them.