(09/04/2018)
Wetzel County in the middle of the Marcellus Hub has been added to West Virginia's most distressed counties.

More WV counties economically distressed than last year, commission says

By Max Garland Staff writer for the wvgazettemail

Three more counties in West Virginia are now considered economically distressed by the Appalachian Regional Commission than the year before, running counter to the region’s overall trend, according to recent data from the federal-state agency.

Counties in Appalachia are divvied up into five levels of economic status by the agency, from best to worst: attainment county, competitive county, transitional county, at-risk county and distressed county.

Fayette, Summers and Wetzel counties have been moved from at-risk counties to distressed counties. In West Virginia, they join Roane, Calhoun, Gilmer, Braxton, Webster, Clay, Boone, Lincoln, Logan, Wyoming, McDowell and Mingo counties in that category.

Now, 272,571 West Virginians live in distressed counties, a hike from the last fiscal year’s 205,068 total, per the commission.

“I think what’s happening is the data is catching up with the reality of the situation,” said Wendy Wasserman, the ARC’s communications director, adding that West Virginia being so dependent on the declining coal economy has played a role.

The ARC, an economic development agency which provides grants and project support in the region, uses three economic indicators in making its county classifications: three-year average unemployment rate, per capita market income and poverty rate. It then compares those indicators with national averages and creates an index value, making economic designations annually based on that value.

Economic challenges aren’t unheard of elsewhere in the region, like in the more than 20 Mississippi counties the ARC says are part of Appalachia.

“[Mississippi’s] grown at a very modest pace -- we’re a relatively small and poor state, and those problems that come from being a poor state are always present,” said Darrin Webb, director of the University Research Center under the Mississippi Institutions of Higher Learning.

But there are now fewer distressed counties in Appalachia as a whole (81) compared to last year (84), even with the increase in West Virginia. For the entire region of Appalachia, 1.44 million people live in distressed counties compared to 1.65 million in the previous fiscal year.

The new designations come at a time in which some state officials, like Gov. Jim Justice, claim West Virginia has made an economic comeback.

“I think this is just another reason and another tipping point for West Virginia communities to diversify their economy, and another opportunity,” Wasserman said.

The ARC uses the designations to set rates for project funding contributions. According to its website, its maximum funding contribution usually tops out at 50 percent of costs, but that can jump to as high as 80 percent in distressed counties like Summers County.

Jack David Woodrum, a Summers County commissioner, said he’s seen his county’s economic decline firsthand -- more houses for sale, people moving elsewhere for a new job. There’s been a recent uptick in new business licenses, Woodrum said, but the decline of Summers County’s flagship rail industry has made recovery a tall order.

The newfound distressed designation is certainly not a positive, Woodrum said. Yet it does allow the county to lean on the ARC more for infrastructure project funding that has been a recent local priority, he said.

Woodrum believes drawing more attention to the county’s tourism industry -- including efforts to rebrand the New River Gorge National River as a National Park -- will give its communities a better shot at economic stability.

“Everyone wants some industry located in their county, and we certainly continue to look for that, but at the same time, this is what I’ve got right now that works,” Woodrum said of tourism. Summers County was anything but distressed earlier in its life, Woodrum said. The Chesapeake & Ohio Railroad’s construction -- while steam power was still prominent -- brought a booming economy along with it, concentrated in the county seat of Hinton.

But eventually diesel engines took over, which shifted the industry and put the county’s economy into tailspin. They weren’t prepared, Woodrum said.

“There were other industries that tried to come in, and the local government wouldn’t allow that, because they thought the railroad was always going to be here and they didn’t need anything else,” he said.

Also in West Virginia, Raleigh, Monroe, Lewis, Upshur and Randolph counties were downgraded from transitional counties to at-risk counties. The only West Virginia county with a rank above transitional is Jefferson County, which is considered a competitive county.

Some of West Virginia’s distressed and at-risk counties are under the purview of the Region VII Planning and Development Council. Shane Whitehair, its executive director, said an influx of workers have made their way through the region to construct the Atlantic Coast Pipeline and Mountain Valley Pipeline in the past six months. The designations’ data aren’t recent enough to reflect that, he said.

Whitehair said the energy industry has always played a role in his council’s region, which contains Barbour, Gilmer, Lewis, Randolph, Braxton, Tucker and Upshur counties. Coal mining activity has largely dissipated, but natural gas is now playing a significant role, he said.

“When you see the energy sector go down, our economy goes down. When it goes back up, the economy shows and the statistics show that rise in activity,” he said. “We kind of live and breathe by the energy sector, it seems, for the last five or ten years.”

There are other wrinkles to the region’s economy, Whitehair said, like the burgeoning hardwoods industry which features Randolph County’s Armstrong Flooring and a pocket of emerging entrepreneurship in Buckhannon.

“Small business seems to be the more realistic stability that we could have in our region, because we’re very rural,” he said.

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