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Tue January 28, 2014
Kentucky Highlands Becomes Both 'Promise' And 'Empowerment' Zone
Earlier this month, parts of southeastern Kentucky were named a “Promise Zone” by President Obama. Twenty years ago, President Bill Clinton named neighboring parts of the Kentucky Highlands an “Empowerment Zone.”
Both programs target the economically depressed region for extra federal help. But how effective are they? Here & Now’s Meghna Chakrabarti asks Jerry Rickett, a local leader who’s been instrumental in both programs.
Interview Highlights: Jerry Rickett
On the effect of Empowerment Zone
“We took $11 million of the $40 million and put it in a developmental venture capital or revolving loan…. We’ve loaned almost $50 million with that $11 [million]. You know, we lend it, recapture it, re-lend it. And as of January the 15th, companies we had loaned those funds to that are in that empowerment zone area had 3,594 people working. The empowerment zone, when it was originally designated, had just over 27,000 people living in the census tracks that were designated. So that’s a pretty good percentage of the folks… And the poverty rate within the empowerment zone declined from 39.7 percent down to 26.1 percent, which we think is a very significant number for a program like this to impact an area.”
On his hopes for the Promise Zone
“This really gives us a kick start, you know, a rallying point. There’s a lot of enthusiasm when something like this is announced. You know, if you continually monitor your progress and continue to tell the success stories of folks working together to provide employment and improve education, I think we can maintain the enthusiasm.”
MEGHNA CHAKRABARTI, HOST:
This is HERE AND NOW.
Ahead of President Obama's State of the Union address tonight, we want to take a few minutes to look back at a program he proposed in his speech last year. He talked about creating Promise Zones that would help struggling communities with a combination of business tax breaks and direct assistance in applying for federal money. The first five Promise Zones were named earlier this month, and one of them is in southeastern Kentucky.
But do these federal anti-poverty programs really work? It turns out, there's an interesting comparison also in Kentucky. Twenty years ago, parts of the state were named Empowerment Zones by then-President Clinton, and $40 million in federal money came along with that designation. The question is: Did it make a difference? Well, with us is Jerry Rickett. He runs the Kentucky Highlands Investment Corporation and was instrumental in helping his region become both Empowerment Zones, and now a Promise Zone. Mr. Rickett, welcome. And, first of all, let me ask you: Are you excited about your area being named a new Promise Zone?
JERRY RICKETT: We're extremely excited. We're working in an area that has a great deal of distress. And we have a group of partners that have committed to, you know, 10 years of working together on regional basis. You know, this is a huge challenge that's before us.
CHAKRABARTI: Let me ask you: 20 years ago, several parts of Kentucky were named an Empowerment Zone by President Clinton, including Clinton County and Jackson County and a couple other places in Kentucky. Are those areas of the state better off today than others that weren't named an Empowerment Zone 20 years ago?
RICKETT: Yes, ma'am. We believe they are. We did our final report on Empowerment Zone in 2009. And at that time, we've made significant progress, you know, in the demographics and in the employment. And the communities had been able to do several projects from set-aside funding, you know, waterline extensions and infrastructure development and that sort of thing. You know, those projects are still there.
CHAKRABARTI: Now, I understand that some 3,000 new jobs were created in the Empowerment Zone, and that it brought in $70 million in matching funds, both of which are pretty impressive numbers. But that overall, what, one in 10 people, so just 10 percent in the Empowerment Zone are still employed because of the program?
RICKETT: Yes, ma'am. We took $11 million of the 40 million and put it in a - we call it a developmental venture capital, or a revolving loan, put the 11 million in. We've loaned almost 50 million with that 11. You know, we lend it, recapture it, relend it. And as of January the 15th, companies that we had loaned those funds to that are in the Empowerment Zone area had 3,594 people working.
The Empowerment Zone, when it was initially designated, had just over 27,000 people living in the census tracts that were designated. So that's a pretty good percentage of the folks that, you know, if all the employees came from the zone, that would have gotten the job and still have a job. And the poverty rate within the Empowerment Zone declined from 37.9 percent down to 26.1 percent, which we think is a very significant number, you know, for a program like this to impact an area.
CHAKRABARTI: Is that number better than in other parts of the state that weren't designated an Empowerment Zone?
RICKETT: Yes, ma'am. The zone reduced the percentage by 19.7 percent, compared to the state of the Kentucky. That was 15.3 for the same time frame.
CHAKRABARTI: Huh, interesting. Well, this is exactly the reason why we're delighted that you could join us today, because you've got a special, if not unique experience both in helping to administer an Empowerment Zone 20 years ago, and today, a Promise Zone that President Obama recently designated. So let me ask you: One of the main differences between the two programs is that a Promise Zone doesn't bring in those millions of dollars that the Empowerment Zone did under President Clinton. The Promise Zones just basically tax breaks and other forms of government assistance in applying for grants and other types of funding. Do you worry about that, that there's no direct dollar input?
RICKETT: Well, the 40 million was wonderful, but the tax credits you mentioned, the president has asked Congress to implement those. And to my knowledge, those haven't passed yet. So we don't have a tax credit advantage for the Promise Zone. And that helped us get a lot of the big companies to, you know, consider and locate in the Empowerment Zone. So we're anxious that that will pass.
CHAKRABARTI: You know, finally, Mr. Rickett, the area of southeastern Kentucky that's been named a promise zone, as we've sort of touched upon, has really been hit hard by job losses from the coal industry. And on the day that President Obama named the promise zones, we actually spoke with Bell County, Kentucky, judge executive Albey Brock. And he said he was cautiously optimistic about his county being named one of the promise zones. And we have a little bit of tape from him, so let's listen to that.
ALBEY BROCK: We're beat down pretty bad. There's, you know, high employment. You know, folks are desperate for help. And I don't want to give them a false hope in believing that this announcement from the president means that, you know, magically, all our troubles will go away when that's probably not going to be the case.
CHAKRABARTI: You know, and Mr. Block ended up saying that he's concerned that those one-time grants might just, quote, "kick the can down the road." So I'm wondering, you know, what you might tell him, given your 20 years experience dealing, you know, with the empowerment zones and your thoughts on what places like Bell County might actually be able to do with the new promise zone designation.
RICKETT: Well, this is a 10-year designation. It took us a long time to get to this point. It's going to take us a long time to get out. But I think this really gives us a kick start, you know, a rallying point. You know, there's a lot of enthusiasm when something like this is announced. You know, if you continually monitor your progress and continue to tell the success stories of folks working together to provide employment and improve education, you know, I think we can maintain the enthusiasm.
CHAKRABARTI: Well, Jerry Rickett is president and CEO of the Kentucky Highlands Investment Corporation which helped to win the promise zone designation for southeastern Kentucky. And 20 years ago, it won the empowerment zone designation for other Kentucky counties. Mr. Rickett, thank you so much for your time today.
RICKETT: Thank you.
CHAKRABARTI: Interested to know what you think about this story, especially if you live in a part of the country that was an empowerment zone 20 years ago. Go to hereandnow.org and leave a comment there. Or you can click on contact us to send us an email. A more direct route is also through Twitter. We're @hereandnow. Jeremy Hobson is @jeremyhobson. And I'm @meghnawbur. You can also find us on Facebook as well. We're everywhere. We're at facebook.com/hereandnowradio. You're listening to HERE AND NOW. Transcript provided by NPR, Copyright NPR.