Commonwealth of Pennsylvania
Annual Strategy Statement for the
Appalachian Regional Commission
Fiscal Year 2008
Edward G. Rendell, Governor
November 2007
Prepared by:
PA Department of Community and Economic Development
Appalachian Development Center
Commonwealth Keystone Building
400 North St, 4th Floor
Harrisburg, PA 17120
Table of Contents
I. Letter of Transmittal
II. Overview of the Region
III. Goals, Objectives and Strategies
IV. Pennsylvania ARC Program and Policies
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Section II: Overview of the Region
Pennsylvania is proud of its Appalachian heritage, culture and natural beauty. Fifty-two of
our sixty-seven counties are located within the vast Appalachian Region. It is a region
dominated in many respects by one large central city of national prominence, Pittsburgh, but
also contains much smaller communities and rural areas in varying degrees of distress.
Pittsburgh, as well as cities such as Erie, Johnstown, Altoona, and Wilkes-Barre/Scranton
continue to adjust to significant declines in what were once major industries—(e.g. coal and
iron and steel production). In addition, many of the smaller communities are still struggling to
identify and develop an economic structure that will hopefully provide the vibrancy needed to
provide good jobs, physical infrastructure, and social structure in order to sustain growth and
entrepreneurial development.
Pennsylvania’s rural counties as defined by the U.S. Census Bureau nearly mirror the
Appalachian portion of the Commonwealth.
The Center for Rural Pennsylvania
commissioned the Rural Pennsylvania Current Population Survey (RuralPA-CPS) which
provides baseline data on the state’s rural households and individuals. The annual RuralPACPS is modeled after the U.S. Census Bureau’s Current Population Survey (CPS). Unlike the
federal survey and the decennial census, the RuralPA-CPS focuses solely on Pennsylvania’s
3.4 million rural residents.
Pennsylvania Rural Counties
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The 2007 RuralPA-CPS highlights some of the following economic and demographic
conditions across the region:
Households
The typical rural household has an average of 2.5 persons. However, households in rural
eastern Pennsylvania are slightly larger than households in rural western Pennsylvania (2.7
persons and 2.5 persons, respectively). There is no significant difference between rural and
urban areas in the number of persons in households. A married couple heads 66 percent of
rural households and 63 percent of urban households. Unmarried couples living together
make up 6 percent of households in both rural and urban areas. The second most common
type of household in both rural and urban areas is a single person living alone. In rural areas,
19 percent of households are made up of single persons who are typically female (67
percent), and, on average, 64 years old. In urban areas, 21 percent of households are made
up of single persons, 69 percent of whom are female and, on average, 63 years old. Other
types of rural households include: single parent households (4 percent); female-headed
households, no husband or children present, (3 percent); and male-headed households, no
wife or children present (1 percent.)
Children
Children make up 22 percent of the rural and 23 percent of the urban population. Rural and
urban households with children have an average of 1.8 children per household. About 80
percent of rural and urban children live in married couple households, about 13 percent live
with a single parent, and 7 percent live in a household comprised of two unmarried persons.
The average rural and urban child is nine years old. In rural areas, 14 percent of children live
in households with incomes at or below poverty, and in urban areas, 12 percent of children
live in such poverty households. One striking difference between rural and urban children is
the percent eligible for the Free and Reduced School Lunch Program, as 36 percent of rural
school-age children and 23 percent of urban school-age children are eligible. A small ruralurban difference among children is the percentage of teenagers with jobs. In rural areas, 35
percent of rural teenagers between the ages of 16 and 18 are employed compared to 38
percent of teenagers in urban areas. In both rural and urban areas, more than 91 percent of
these teenagers are employed part-time.
Senior Citizens
A significant difference between rural and urban senior households is income. In rural
households headed by a senior citizen, the median annual income is $29,000. In urban
senior households, the median is $38,400, a difference of $9,400. Another rural-urban
difference is in computer and Internet access. In rural areas, 48 percent of senior-headed
households do not have a computer. Among urban senior-headed households, 43 percent do
not have a computer. Among the 52 percent of rural senior-headed households with a
computer, the majority has Internet access (83 percent). Fifty-six percent of these rural
seniors connect to the Internet through a broadband connection (cable modem or DSL) and
44 percent use a dial-up modem. In urban areas, 57 percent of senior-headed households
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have a computer. Among these households, 88 percent have Internet access: 63 percent
connect through a broadband connection and 37 percent connect through a dial-up modem.
Poverty Households
In 2007, a family of three with a total income of less than $17,170 is living in poverty. Ten
percent of rural households and 9 percent of urban households are in poverty. Poverty
households are more likely to have more females (58 percent vs. 51 percent for non-poverty
households) than males (42 percent vs. 49 percent, respectively.) Of the rural households in
poverty, a single person heads 35 percent, married couples head 34 percent and single
parents head 18 percent of households. Seven percent of rural poverty households are
comprised of unmarried couples and the remaining 6 percent are made up of male- or
female-headed householders with no children. Forty percent of rural households in poverty
have children. Among all rural children in poverty households, 44 percent live in married
couple households, 42 percent are in single parent households, and 14 percent are in
unmarried couple households. In rural areas, 52 percent of households in poverty own their
own home and 48 percent rent. Compared to urban households in poverty, those in rural
areas are less likely to receive Temporary Assistance for Needy Families (TANF), as 8
percent of urban households received TANF payments compared to 5 percent in rural areas.
However, rural households are more likely to receive food stamps (51 percent rural vs. 44
percent urban); Supplemental Security Income (SSI) (27 percent vs. 16 percent); and
unemployment compensation payments (9 percent vs. 7 percent). Forty-one percent of rural
adults are in the labor force. Twenty-eight percent of rural adults in poverty and 25 percent of
urban adults in poverty do not have a high school diploma. Fourteen percent of rural adults in
poverty have an associate’s degree or higher.
Uninsured
Eight percent of rural residents and 6 percent of urban residents do not have health
insurance. In both rural and urban areas, the average age of an uninsured person is 38 years
old. Approximately 3 percent of the rural uninsured are children under 18 years old. About 11
percent of rural adults and 9 percent of urban adults between the ages of 18 and 64 do not
have health insurance. In terms of households, 4 percent of rural households and 3 percent
of urban households have no members with health care insurance. Ten percent of rural
households and 9 percent of urban households are mixed, in which one member may have
health insurance and the other member(s) does not. The median household income for rural
individuals without health care insurance is $32,500. In urban areas, the median household
income is $36,250. Eighteen percent of the rural uninsured live in poverty. Seventy-five
percent of uninsured rural adults are in the labor force. However, 24 percent of these
individuals are unemployed. Among those who are employed and uninsured, the top four
rural employment industries are: retail, 21 percent; food service, 14 percent; manufacturing,
11 percent; and transportation and warehousing, 11 percent.
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College Graduates
For the analysis, a college graduate is 25 years old and older and has at least a bachelor’s
degree. In rural areas, 23 percent of persons 25 years old and older have a bachelor’s
degree. Among those with a bachelor’s degree, 38 percent also have a graduate degree. In
urban areas, 38 percent of persons 25 years old and older have a bachelor’s degree and 43
percent have a graduate degree.
Unemployment
The unemployment rate in rural areas is 8 percent and in urban areas it is 6 percent. These
rates include all adults who are not employed but looking for work. At the household level, 9
percent of rural households have one or more unemployed person. The average age of an
unemployed person in rural Pennsylvania is 37 years old. Sixty-one percent of the rural
unemployed have health care insurance, and 39 percent do not. Some of the significant
differences between the rural and urban unemployed include: the percent who are minorities
(25 percent in urban areas vs. 6 percent in rural areas); and educational attainment (20
percent of the urban unemployed have a bachelor’s degree or higher vs. 11 percent of the
rural unemployed.) Forty-seven percent of rural households with an unemployed person have
children, and a single parent heads 17 percent of these households. The typical rural
household with an unemployed person has a total median income of $40,000; in urban areas
the median is $47,500. In rural areas 20 percent of the households with an unemployed
person are in poverty, and in urban areas, the rate is 17 percent.
Working Poor
Seventeen percent of rural Pennsylvania workers may be classified as “working poor.” This
group includes adults who are employed but whose total household income is 200 percent of
poverty or less. In 2007, a family of three would be considered “working poor” if its income
was less than $34,340. The top three industries employing the rural working poor are retail,
manufacturing, and food services. In urban areas, the top three industries employing the
working poor are retail, transportation and warehousing, and health services. Sixty-five
percent of the rural working poor, and 61 percent of the urban working poor are employed
full-time.
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Population
Pennsylvania’s population growth has slowed to one of the lowest rates in the nation due in
great part to our challenge to retain and attract the workers. We continue to lose ground on
the number of new businesses being created. Nationally, Pennsylvania ranked 48 among the
50 states in the percent change in population between 1990 and 2000. The Commonwealth
grew faster than only two other states: West Virginia and North Dakota. Despite the slow
growth, Pennsylvania is the sixth most populated state in the nation.
States Ranked by Rate of Population Growth, 1990-2000
Rank
1.
2.
3.
4.
5.
46.
47.
48.
49.
50.
51.
State
Nevada
Arizona
Colorado
Utah
Idaho
Percent Growth
66.27%
39.98%
30.56%
29.62%
28.53%
Maine
Connecticut
Pennsylvania
West Virginia
North Dakota
District of Columbia
3.83%
3.60%
3.36%
0.83%
0.53%
-5.74%
(Source: Census 2000)
Venture capital and international investment rates are much less than our competitor states
and our housing stock is among the oldest in the nation with over 30% built before 1940 –
safe and affordable housing is a key component for companies and their workers looking to
relocate or expand.
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Our colleges and universities are producing above average numbers of advanced degree
students who are forced to take their intellectual capital elsewhere because we do not have
the jobs to employ them. According to the U.S. Census, Pennsylvania lost more young
people than any other state from 1990 – 2000:
300,000
250,000
200,000
150,000
100,000
50,000
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-50,000
-100,000
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The health care delivery system remains critical to the overall economic and community
viability of rural Pennsylvania. Integral to this system is the availability of health care
professionals and the affordability of services. Over the past few years, personnel shortages
and insurance costs have been important topics for discussion.

Of the Commonwealth’s 41,500 doctors, 10% practice in rural counties, serving 21%
of the state’s total population. The remaining 90% of physicians serve the 79% of the
population living in urban counties.

The numbers of hospitals and nursing homes as well as the number of beds in them
are important indicators of access to health care. Rural Pennsylvania had just two
fewer hospitals from 1990 to 2000, a very small drop from 58 to 56. The number of
beds, however, fell by more than 30%. Over the same period, hospital admissions
also fell by 8%
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Appalachia Pennsylvania is making strides in the delivery of fresh water and the collection
and treatment of wastewater and storm water. According to Census data, 58 percent of the
total housing units in rural Pennsylvania get water from a public system or private company,
36% have individual wells and the balance use some other source.
For the disposal of wastewater, 49% of rural housing units have public sewer, 48% have a
septic tank or cesspool and the remainder use “other means.” The rural situation is
significantly different from urban Pennsylvania, where 86% of households have public water
and 84% have public sewer.
In Pennsylvania’s rural counties, there are nearly 10,000 drinking water systems, more than
40% of which are inactive. Of the 5,697 active community systems, 21% are community
systems. Sixty-seven percent are transient non-community systems, while 11% are nontransient, non-community systems. Seventy percent of rural systems are owned by investors
or private individuals as opposed to municipal authorities or governments. There are nearly
3,300 wastewater systems in Pennsylvania’s rural counties. Municipal or public sewage
systems account for 17% of this figure, while non-municipal sewage systems make up the
majority or 59%. Industrial waste systems are the remaining 23%
The automobile is the dominant means of transportation in Pennsylvania’s rural counties and
is becoming increasingly important. While the general population of those aged 16 and older
increased by 7% between 1990 and 2000, the number of licensed drivers increased by 8%
and the number of registered vehicles increased by 21%. At the same time, highway miles
grew by a fraction of 1% but daily vehicle miles of travel (DVMT) climbed 22%. These
changes are much more significant than in urban counties.
Commuting patterns derived from 2000 Census data show that, in 1990, fewer than 74% of
rural workers drove alone to work; in 2000, the percent of lone drivers rose to 80.
Accordingly, carpooling dropped from 15% to 11% and walking to work fell from 6% to 4%.
Rail transportation, both passenger and freight, is important to the Commonwealth.
Pennsylvania is served by all three major eastern railroad systems and 70 regional and shortline railroads, more than any other state.
Access to broadband Internet service is as necessary as roads and highways for most rural
businesses. In today's communication era where instant access to people and information
has become the norm, rural Pennsylvania has a distance to go before it catches up with its
urban and suburban neighbors.
According to research conducted by the Center for Rural Pennsylvania, several of PA’s
telecommunications providers are among the country's leaders when it comes to providing
broadband and deploying advanced telecommunications infrastructures. The research also
indicates that many businesses in rural Pennsylvania are effectively using the Internet to
conduct business. In certain respects, many of the state's rural residents and businesses are
fully participating in what has become a broadband-driven, digital era. However, the research
also revealed that while broadband services were virtually everywhere in the state's
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metropolitan areas, there was demonstrably less availability in the state's non-metropolitan
areas and small towns, and even less availability in the more rural areas of Pennsylvania. In
some rural and small town communities, for example, broadband is not available at all.
The research also indicates a lack of competition for broadband services in rural areas, which
results in problems, such as low speeds and poor service quality. So, while some of the
state's telecommunications providers were clearly cutting-edge, others were far less so, and
a deficiency of broadband deployment among some of the state's cable and telephone
companies results in a spotted landscape of broadband availability throughout rural
Pennsylvania. In relation to this, many of the state's rural businesses indicated that Internet
use was becoming increasingly important.
Broadband has arrived in parts of rural Pennsylvania, but many areas have a long way to go
to truly participate in the economic and social benefits of the modern, digital age. While their
counterparts in metropolitan areas typically have a range of broadband options, a great deal
of those living and working in rural Pennsylvania still have relatively limited or no options in
broadband service. Some rural communities are significantly disadvantaged in terms of
service availability.
Governor Rendell’s Plan for a New Pennsylvania and the associated Keystone Principles
for Growth, Investment and Resource Conservation remain the foundation for the
Commonwealth’s ARC strategy for FY 2008 to reverse the negative economic trends. It is a
strategy that helps prepare our children to prosper in the 21st century, and restores our
economy and creates the jobs and business growth that sustain our communities. This FY
2008 Strategy Statement was developed with input from Pennsylvania’s seven Local
Development Districts representing citizens and elected officials throughout the entire
Appalachian Pennsylvania region. It reflects our commitment to continuation of relationships
with other state and federal agencies, and also builds upon a longstanding partnership with
the Appalachian Regional Commission. It also puts into action the initiatives outlined in
Pennsylvania’s Appalachian Development Plan.
Through bipartisan efforts, our economic development stimulus package was passed to
enable a New Pennsylvania where opportunity is present from border to border.
This comprehensive stimulus program, coupled with resources from the ARC, invests $2.8
billion as a magnet to attract at least $5 billion in private investment in the following target
areas:



Site preparation, infrastructure and construction
Community revitalization
Business investment
By partnering with community and economic development organizations throughout our
seven Appalachian districts, Pennsylvania is implementing a stimulus program that creates
an aggressive opportunity for investment in our future. The following is a recap of social and
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economic conditions in those seven regions as prepared by Pennsylvania’s Local
Development Districts.
Regional Profiles:
SOUTHWEST REGION
The southwest region spans nine counties—Allegheny, Armstrong, Beaver, Butler, Fayette,
Greene, Indiana, Washington, and Westmoreland—and 529 municipal governments.
Geographically, the region covers 6,745 square miles and is situated in the southwestern
portion of the state.
At the time of the last decennial count, the region had a population of 2,514,570 making it the
largest metropolitan area in the 13-state Appalachian Region. In terms of population, the SPC
region would be the 35th largest state in the country. However, recent estimates from the
Census Bureau however, continue to show population decline at the regional level for
Southwestern Pennsylvania and most of its close regional neighbors.
From 2000-2005, the Southwest region saw a population reduction of 1.8%. Butler and
Washington were the only counties to experience population gains, 4.3% and 1.7%,
respectively while Allegheny County had the largest population decrease, with a loss of 3.4%
(or 43,976 people). The lingering effect of the population decline related to steel industry
reductions in the region remains a factor in current population statistics. The distribution of
population decline and increase varies around the region with the bulk of population decline
in the older urbanized industrial centers corresponding to economic shifts in the last several
decades. The percentage of urban dwellers in 2000 had declined to the levels in the 1930s.
Household sizes in the region continue to get smaller as has the rest of the country.
Reduction in average household size in the region from 3.52 persons per household in 1950
to 2.38 persons per household in 2000 mirrored a national trend of decreasing household
size. Furthermore, the region has not seen the significant increase in immigration that
characterizes many growing regions. While the steel industry attracted waves of immigrants
from Europe in the late 18th and early 19th centuries, particularly from European nations,
Census figures from 2000 reported that only 2.5% of all current residents were born outside
of the United States, with only 1.0% of those arriving since 1990, well below the U.S. rate.
The region also is lagging in terms of young adults with only 16.5% of the total population
falling into the 21-34 year old age bracket while the average for the state and the nation are
17.4% and 19.4% respectively. On another note, the University of Pittsburgh’s Center for
Social and Urban Research has indicated that the rate of net out-migration among the
working age population is now approaching some of the lowest levels in the last two decades
Manufacturing still employs a large portion of the regional labor force, but large shares of the
region’s jobs and growth are now within the services sector, including education and
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healthcare services. Financial services, education, government enterprise, retail trade, and
transportation /warehousing are also important industries as well.
Sectors cited by workforce and economic development agencies as key growth opportunities
include advanced manufacturing, financial and back office services, information technology
and life sciences. Energy and transportation will remain important parts of the regional
economy as well due to continuing demand for coal as a regional export commodity.
Additionally, the region’s approximate 10,300 working farms are well positioned to benefit
from the growing interest in alternative fuels.
NORTHWEST REGION
Bordered on north by New York and on the west by Ohio, the Northwest Region is comprised
of Clarion, Crawford, Erie, Forest, Lawrence, Mercer, Venango, and Warren Counties. U.S.
Census data indicates that the Region had a 2000 population of 734,284. Between 1990 and
2000, the Region’s population remained relatively stable. However, between 1980 and 1990,
the Region’s population decreased by 34,500 or 4.5 percent. Census estimates for 2006
indicate a regional population loss of 10,617 since 2000.
The Region is highly diversified in terms of urban and rural. For example, 2006 population
estimates indicate that Erie is Pennsylvania’s fourth largest city, while Forest County is the
second smallest county in terms of population. Approximately eighty percent of the population
is located in the western portion of the Region, with heavy concentrations in and around the
City of Erie, the Shenango Valley in Mercer County, and the City of New Castle in Lawrence
County. The eastern portion of the Region is predominately rural and forested.
Manufacturing employment still accounts for a sizable portion of the employment in
Northwest Pennsylvania. In 2004, manufacturing employment accounted for twenty percent
of the Region’s employment. However, between 2001 and 2004, 11,606 jobs were lost in the
manufacturing sector. Durable goods account for a significant portion of the Region’s
employment with high concentrations in the primary metals, fabricated metals, and nonelectrical machinery groupings. These concentrations are much higher than those of the
United States and Pennsylvania. Regionally, much of the heavier manufacturing is located in
the western portion of the Region, especially in the New Castle, Shenango Valley, and Erie
urban areas. Employment in durable goods manufacturing has been declining since the
1980’s. Manufacturing clusters include plastics, fabricated metals, industrial machining, and
wood products. Identified potential clusters include bio-technology and distribution centers.
The service sector is the largest source of employment in the Region. Statistics for 2004
indicate that 149,378 persons are employed in the service sector. This is 93,809 more
employees than currently in manufacturing. Between 2001 and 2004, employment in the
service sector increased by 6,088. The largest sub-grouping of the service sector is the
health care and social assistance segment at 33 percent.
With regard to the other non-manufacturing sectors, the wholesale and retail trade sectors
employed 46,579 persons. These sectors experienced a decline in employment of 3,329
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between 2001 and 2004. Employment in the transportation sector remained approximately
the same at 8,430, and employment in construction decreased by 1,511 to 10,629. Public
service employment stayed relatively the same at 11,326.
For the past six years, the Region’s unemployment rates have been higher than those of the
State and Nation. In 2006, the Region’s rate was 5.3 percent as compared to Pennsylvania
at 4.7 percent and the U.S. rate at 4.6 percent.
In the past several years, two regional studies have identified some core economic and
community development needs for Northwest Pennsylvania.
They include basic
infrastructure, telecommunications infrastructure, post secondary occupational and technical
college facilities, regional marketing efforts, equity funds for expanding new businesses, and
increased efforts to improve global competitiveness.
NORTHERN TIER REGION
The Northern Tier Region covers more than 4,000 square miles in rural Pennsylvania
consisting of Bradford, Sullivan, Susquehanna, Tioga and Wyoming Counties, three of which
border New York State to the north. While outside the Northern Tier, four cities act as
supporting regional service centers to the Northern Tier: Elmira and Binghamton, NY to the
north; Williamsport, PA to the southwest; and Scranton/Wilkes-Barre, PA to the southeast.
Each of the counties is influenced by the respective cities to which they are closest. Because
of the region’s highly rural nature and its historic economic growth problems, the area
continues to lag behind in many regards.
The 2006 Population Estimates indicate a slightly declining population base for the Northern
Tier at 179,876; down 716 people from 2004. The area’s population base is spread over
large tracts of agricultural land, forests, open space, and mountainous/hilly terrain; with a low
population density of 45 people per square mile (Pennsylvania’s average is 274 people per
square mile). Primary highway access is afforded by US Route 15 (future I-99 Corridor) in
the western part of the region, US Route 220 in the central portion, and I-81 in the eastern
section of the region. US Route 6 is the major east – west corridor through the region. Also,
I-89 located just to the north along the New York State border provides close access to
another major east-west corridor.
The Northern Tier’s economy is generally continuing to following the trend of the state and
national economy. As of June 2007, the Northern Tier region recorded an unemployment
rate of 4.4% (down from 4.7% in May 2006). During that same period, Pennsylvania’s
unemployment rate stood at 4.3% and the national unemployment rate was 4.7%.
Historically, unemployment rates in the region’s five counties have run higher than many
other Pennsylvania counties and the state and nation as a whole, but for the past year, it has
been on par with the state and national statistics.
While the Northern Tier Region has historically been fortunate to have a stable economic
base, the regional economic continues to change in response to converging local, national,
Pennsylvania FFY 2008 Strategy Statement
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and global economic factors and trends. Twenty years ago, manufacturing accounted for over
34% of total employment. Although manufacturing still has a strong influence at 14% of total
regional jobs, the Healthcare and Social Assistance industry cluster has surpassed it at 16%
of the total regional jobs. In addition, Lumber and Wood products industry cluster accounts
for 8% of the regional jobs, and Building and Construction at 6%.
With the severe changes taking place across the national economy, the region has begun to
feel the economic pinches. The economic diversification that has occurred is partially a
function of the decline in older manufacturing industries and because of the stronger growth
occurring in other regional industries.
It must be noted that any significant layoffs within the region can cause a dramatic effect in
the unemployment statistic. On a positive note, this slackening of the workforce will create a
more highly skilled available workforce and help give other businesses in the region a
competitive advantage.
The homogenous, rural, and sparsely populated region has maintained a steady to slightly
declining population base over the past several years. Pennsylvania’s growth rate also lags
behind that of the nation as a whole.
NORTHEAST REGION
The seven (7) county Northeastern Pennsylvania (NEPA) Region contains an area of
approximately 4,400 square miles. The major urban centers within this region are primarily
concentrated in the 87 miles stretching from Carbondale in Lackawanna County through the
Wyoming Valley to Nanticoke and then following Interstate 81 south to Hazleton and
Pottsville. Major cities within this belt are Scranton and Wilkes-Barre.
According to the U.S. Census Bureau, the population of Northeastern Pennsylvania in April
2000 was 974,394 and in July 2006 the estimated population was 1,007,529. This population
growth was concentrated in Pike (25.7% increase), Monroe (19.5% increase), Wayne (6.7%
increase) and Carbon counties (6.4% increase). In Pennsylvania counties that have at least
10,000 residents, Pike and Monroe counties are the first and second fastest growing counties
in percent increase, respectively. Interim population estimates basically support the same
trends with growth concentrated in the Pocono Mountains counties. Overall, this region
continues to experience a relatively high median age. According to the 2000 Census, the
median age in the U.S. was 35.3 years, in Pennsylvania it was 38.0 years and the average in
the region was 40.0 years.
The average per capita personal income in this region is ($28,919) is below state and
national average and the 2004 estimated median household income average of $41,280 also
falls below state ($47,314) and national ($44,334) averages.
As a result of people moving to the region from the states of New York and
New Jersey, some of the major geographic areas of this region, such as the Pocono
Mountains, are rapidly changing character. This continues to occur although much of NEPA
remains rural from a land-use perspective.
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According to the Pennsylvania Labor Market Information Database System, unemployment
rates in this region are higher than national and state averages. The 2006 unemployment
rate in Northeastern Pennsylvania was 5.4% and it was higher than the state (4.7%) and
national (4.6%) averages.
Northeastern Pennsylvania’s business base is overwhelmingly dominated by small
businesses. According to County Business Patterns, there were approximately 23,654
businesses in this region and 74.6% of these businesses employed between 1-9 people in
2005. The single largest industry sectors by employment are: 1) Services 2) Retail Trade
and 3) Manufacturing. Employment in the manufacturing sector is dominated by the needle
trades, printing and publishing, electronics and fabricated metal products.
Northeastern Pennsylvania’s economy continues to remain somewhat imbalanced by
demonstrating a high reliance on manufacturing among its western counties (Carbon,
Lackawanna, Luzerne and Schuylkill) and a high reliance on the retail trade and services
industry dominated by lodging and recreation among its eastern counties (Monroe, Pike and
Wayne).
As with national trends, employment in the manufacturing sector continues to decline.
Historically, most of the decreases in employment were attributed to the decline in the
region’s needle trades, tobacco products and textile mill products industry sectors. However,
according to County Business Patterns, in the period 1998-2005, employment in the
manufacturing sector declined by 14,051 jobs or 22.0%, as compared to the state with an
18.9% decrease and the nation with a 19.3% decrease. One hundred eighty-one
manufacturing businesses closed during that period. This reflects a 14.6% decrease as
compared to a 9.5% decrease in the state and a 9.0% decrease in the nation. In recent
years, specific industries in the manufacturing sector that have declined include furniture,
pressed and blown glass, and glassware manufacturing. This has been influenced by
outsourcing, as well as technology. However, there were several significant announcements
of companies locating plants within the region during the past year.
The NEPA Region has diversified its economic base over the past thirty years. In recent
years, it has been extremely competitive and successful as a location for warehousing and
distribution centers, financial services operations, light assembly, food and plastics
manufacturers. Employment reflects diversification efforts and is not concentrated in any
business sector.
NORTH CENTRAL REGION
North Central Pennsylvania is rural, non-farm, and small-town in character. Manufacturing
(especially powdered metals and metal fabrication), forest products, limited oil and gas
extraction, tourism, and transportation/distribution services (especially in the Interstate 80
corridor of Clearfield and Jefferson counties) are major employment sectors of the region.
Employment is concentrated in four major clusters: telecommunications, manufacturing,
forest products, and transportation/distribution. These clusters occur in different counties.
Pennsylvania FFY 2008 Strategy Statement
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Economic transformation/consolidation has affected Potter County in a big way in the past
twelve years (1995-2007). Adelphia Communications became the fifth largest cable
television company in the nation in the mid-1990’s, employing 2300 at its company
headquarters in Coudersport. A subsequent bankruptcy and later buyout of the assets
between Time-Warner, Inc. and Comcast has essentially dissolved the corporation and
reduced employment. On July 18, 2007, Empereon Marketing from Phoenix, Arizona,
announced they would be establishing a call center in a former Adelphia building and would
employ 450 in the near future.
McKean County has seen a rebound in the extractive industries as high oil and gas prices
have contributed to employment gains and additional exploration. Firm prices in lumber, new
saw logs, and veneer continue to positively impact production and employment in the forest
products sector for both McKean and Potter counties.
Manufacturing, especially in the metal fabricating and powdered metal cluster tends to
fluctuate with the demand for durable goods products in the national economy. A
concentration of over 7,000 jobs in the powdered metal manufacturing sector can be found in
Elk and Cameron counties alone. Yet, both counties, while similar in the manufacturing of
powdered metal parts, have substantial differences in employment, with unemployment in Elk
County being generally two to three percentage points lower than Cameron County.
Strong growth in the transportation/distribution cluster in Clearfield and Jefferson counties is
due in part to Interstate 80 bisecting these counties in an east-west manner. It is estimated
that trucking firms employ over 2,000 people in Clearfield County and 1,200 to 1,500 in
Jefferson County.
The Appalachian Regional Commission recently designated all six counties in the region as
“transitional.” Transitional counties compose the largest economic status designation of
Appalachian counties and consist of counties transitioning between strong and weak
economies. These counties have a composite index value that ranks between the worst 25
percent and the best 25 percent of counties in the nation.
Following five years of region wide weakness, fiscal year 2007 appeared to be a stronger
period where some lay-offs were reduced, new hiring began, and there were fewer plant
closures or Chapter 11 bankruptcies and lower unemployment. Manufacturing, while not
robust, seemed to stabilize during fiscal year 2006 and now into 2007. The favorable impact
of lower interest rates stimulated small pockets of new housing and contributed to small
company expansions. Higher fuel prices had a small impact on the transportation/distribution
cluster in the I-80 corridor (counties of Jefferson and Clearfield), yet demand for trucking and
related transportation services remained strong. This enabled transport firms to raise prices
and pass along higher fuel costs. Sluggish demand for automobiles, trucks, and lawn/garden
equipment enabled powdered metal manufacturing to remain somewhat stable.
Unemployment continues to be a problem, but not as severe as in the prior five years.
CENTRAL REGION
Pennsylvania FFY 2008 Strategy Statement
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The 11-county SEDA-COG region (Centre, Clinton, Columbia, Juniata, Lycoming, Mifflin,
Montour, Northumberland, Perry, Snyder, and Union counties) is predominately rural, and is
situated in Pennsylvania’s Heartland. Scattered across the region are a number of mostly
small urban centers. Its topography, chiefly the Susquehanna River system and the ridges of
the Appalachian Mountains, have markedly influenced the region’s economic development.
The urban centers are overwhelmingly found along the Susquehanna and its tributaries,
where most of the region's economic activity, development, and growth have also occurred in
the form of industry, commerce, and services. These same centers are subject to significant
periodic flooding which has served as a barrier to long-term economic growth.
The region has a favorable geographical location and is in close proximity to 50% of the U.S.
population. It also has an abundance of land potentially available for development; seven
institutions of higher education; a large amount of recoverable anthracite coal; and significant
deposits of other mineral resources. Forest resources are extensive and increasing,
providing timber for an expanding wood industry as well as a natural setting that favors the
increasingly important tourism and recreation sectors of the economy, particularly along the
river corridors.
The SEDA–COG EDD covers a land area of 6,317 square miles, which represents 14.1% of
Pennsylvania’s total land area of 44,187 square miles. In contrast, the region's 2006
population estimate of 666,724 represents only 5.3% of the total population of Pennsylvania.
The 2006 population estimate density in the region is 105.5 persons per square mile,
compared to a statewide density of 281.5 persons per square mile. The population change
from 1990 to 2006 was 4.3% for the region and 4.5% for the state. During this same time
period, Lycoming, Mifflin, and Northumberland County experienced a population decline of
.9%, .3%, and 5.6%, respectively.
According to the 2004 Pennsylvania County Industry Trends (the most recent version of
Industry Trends available), manufacturing jobs accounted for slightly over 20% of all jobs in
the region. It should be noted that the SEDA-COG region is considerably more dependent on
the manufacturing sector than is the state as a whole at 13%. Diversified manufacturing has
been identified as a prominent industry cluster in the Central Pennsylvania region.
SEDA-COG’s 12-month average unemployment rate ending June 2007 is 4.6%. This figure
is higher than both the state and national average of 4.4% and 4.5%, respectively, for the
same timeframe.
The SEDA-COG region is fortunate in having within its borders seven institutions of higher
education, including the Commonwealth’s largest such facility, Penn State University.
Unfortunately, the abundance of educational opportunities in the region appears not to have
resulted in a comparably high level of educational attainment. According to the 2000 Census,
the percentage of residents of the region age 25 or older who have completed high school is
78.9%, slightly lower than the statewide percentage of 81.9%.
Pennsylvania FFY 2008 Strategy Statement
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At the end of calendar year 2009, deregulation of the electricity industry is projected to result
in at least a 30% immediate increase in electricity costs for businesses, local governments,
residents, schools, hospitals, and other entities in our region. The cost of electricity will join
the skyrocketing transportation and heating fuel prices reflecting full market cost of
development and production. Introducing best energy efficiency and pollution prevention
practices to clients will result in cost savings beneficial to the region’s economy while
contributing significantly to the preservation of the region’s environment and quality of life.
SOUTHERN ALLEGHENIES REGION
The mission of the Commission is to improve the economy of the region and the quality of life
for its residents. The Southern Alleghenies Local Development District (LDD) is composed of
six counties (Bedford, Blair, Cambria, Fulton, Huntingdon, and Somerset) in south-central
Pennsylvania. The majority of the region is rural and forested, with a total land area of 3,400
square miles. The common geographic factor linking all counties in the region is the
Allegheny Mountains region of the Appalachian Mountains Range. In April, 2006 the LDD
branded the region as “The Alleghenies”.
In economic terms the Alleghenies Region is far greater than the sum of its six counties when
those counties are viewed individually. The primary reason is that the counties are distinctly
different. They have different physical characteristics and resources, different land uses,
settlement patterns, and social characteristics. They also have different economic structures
and specialization. Blair and Cambria Counties with the Johnstown and Altoona metropolitan
areas are urban centers with a wide range of high-order central place functions. Bedford,
Fulton, Huntingdon, and Somerset are rural counties with a strong agricultural bases and
varying levels of light manufacturing. All the counties have extensive tourism and recreation
destinations.
The region has strengths for economic development and an equal number of weaknesses. It
is very important to nurture the existing businesses located in the region and pursue
additional opportunities for economic and community growth.
Strengths:




Low cost of living and low business costs are advantages in attracting firms to the
area.
Affordable housing.
Strong push for redevelopment of idled land, buildings, and industrial space.
Quality of life that includes plentiful quality outdoor recreation opportunities.
Weaknesses:



Weak demographic trends will limit labor force growth, constrain consumer demand,
and subdue housing market activity.
Below average per-capita income limits retail expansion.
Lower educational attainment rates make it difficult to attract new businesses.
Pennsylvania FFY 2008 Strategy Statement
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
Branch operations are prevalent rather than headquarter operations making it easier
for corporations to downsize in the region.
The history of the region is tied to coal, steel, railroads, and agriculture. The region had
numerous mines and huge steel mills during peak periods in those industries. The coal and
steel industry in the region declined sharply in the 1980s, with only limited activity in these
industries remaining. Of significance, coal is having a limited come back in Cambria and
Somerset counties through re-mining and reprocessing. A stronger, more diversified regional
economy is emerging. The region today features a mix of jobs in manufacturing, service
industries, retail and wholesale trade, transportation, tourism, agriculture, bio-technology, and
government.
The industrial markets of the 1990’s and early 2000’s were not strong enough to establish a
stable local economy.
Thus, continued economic diversification, while not easily
accomplished, is required. A new approach being taken is the use of regional assets under
the assets-based economic development concept. Economic growth and stability over the
next five to ten years must be based on local initiatives, not outward expansion from nearby
metropolitan areas. The entire region has a declining manufacturing base but desires to
maintain and expand existing manufacturing jobs. An analysis of the employment data shows
that the regional unemployment rate continues to remain above the national and state
unemployment rates
Diversification efforts are having an effect. Blair County has been especially noticeable with
the county’s unemployment rate below the national and state average during FY 2006-2007.
Fulton County has done well, but continues to rely on one major industry to employ the bulk
of its workforce. The other counties, Bedford, Cambria, Huntingdon, and Somerset, have
consistently remained above federal and state unemployment averages.
APPALACHIAN DEVELOPMENT HIGHWAY SYSTEM
In Pennsylvania, the 544.9-mile Appalachia Development Highway System consists of seven
routes, identified as Corridors M (US 22), N (US 219), O (US 220/I-99), O1 (US 322), P (US
220/I-180), T (I-86), U and U-1 (US 15). It should be noted that portions of Corridors O, P
and U will be a part of future I-99 which is under development. This route is considered a
vital north/south corridor that responds to the increased commercial traffic and development
opportunities arising from the North American Free Trade Agreement.
All Appalachian corridor project needs in Pennsylvania are developed in the identical manner
as regular federal projects, through an integrated and consensus reaching programming
process which involves input from Metropolitan Planning Organizations, Rural Planning
Organizations, State Transportation Commission, elected officials, the Governor’s Office and
the general public. Project need is based largely on levels of traffic, safety concerns and
economic development initiatives. Once consensus is reached on the need for a project,
ADHS funds are programmed based on project readiness, schedule and financial constraints.
Every Appalachian Development Highway System project must be detailed in the Cost to
Pennsylvania FFY 2008 Strategy Statement
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Complete Estimate and approved by ARC. The Cost to Complete Estimate is required by
ARC and the Federal Highway Administration every five years. The most recent estimate was
completed in 2007.
Today, construction is on going or will soon start on several ADHS Corridors, such as,
Corridor U and U-15 (US 15, Tioga and Lycoming Counties), Corridor M (US 22, Lewistown
Area and also in Westmoreland, Indiana and Cambria Counties) and Corridor O (US 220 / I99, Centre County). Furthermore, one entire corridor of the ADHS System in the
Commonwealth is complete: Corridor T in Erie County.
The Commonwealth’s portion of the Appalachian Development Highway System is estimated
to cost more than $2.7 billion to complete, based on the 2007 Cost to Complete Estimate.
Pennsylvania will continue to utilize ADHS funds to meet the challenge of completing the
ADHS System which coincides with the state’s efforts to ensure economic stability in the
Appalachian Region of Pennsylvania. PA will encourage each LDD region to give special
consideration to potential ARC investments with a direct or indirect connection to an ADHS
corridor.
DISTRESSED COUNTY DESIGNATIONS
One of the Region’s counties, Forest County, has been designated a distressed county by
ARC. With a 2006 population of 6,506, Forest County has the second smallest population of
any county in the State. It is also one of the State’s most rural counties. The County’s
population has a per capita income which is only 73 percent of the State’s per capita income.
Almost 50 percent of the County’s land mass is a part of the Allegheny National Forest. In
2004, the County had only six manufacturing firms, which employed 171 persons or ten
percent of the workforce. Forest County generally has high unemployment rates. The June,
2007 unemployment rate was 6.2 percent, third highest among all counties in Pennsylvania.
As the second consecutive year as a distressed county, PA will continue to work with LDD
representatives and local officials to identify priority projects for potential ARC investment. In
FY08, PA will focus on using flex-e-grant tools to help develop the civic capacity to undertake
more extensive ARC-funded activities in Forest County.
TRANSITIONAL COUNTY DESIGNATIONS
The majority of Pennsylvania’s ARC counties (45) are designation as transitional counties:
Allegheny, Armstrong, Beaver, Bedford, Blair, Bradford, Cambria, Cameron, Carbon, Centre,
Clarion, Clearfield, Clinton, Columbia, Crawford, Elk, Erie, Fulton, Greene, Huntingdon,
Indiana, Jefferson, Juniata, Lackawanna, Lawrence, Luzerne, Lycoming, McKean, Mercer,
Mifflin, Monroe, Northumberland, Pike, Potter, Schuylkill, Snyder, Somerset, Sullivan,
Susquehanna, Tioga, Union, Venango, Warren, Washington, Wayne, Westmoreland, and
Wyoming.
Pennsylvania FFY 2008 Strategy Statement
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COMPETITIVE COUNTY DESIGNATIONS
Allegheny, Butler, Montour, and Perry counties are Pennsylvania’s four competitive counties.
Allegheny County, home to the City of Pittsburgh, forms the core of the regional economy in
Southwestern Pennsylvania. In 2005, economic activity in Allegheny County is estimated to
have produced over $77 billion in value added product. In 2006, the county’s labor force
included an average of 631,994 people - a very slight increase over 2005’s average of
630,821. However, the average unemployment rate decreased more notably from 5.0% in
2005 to 4.6% in 2006. In May 2007, the County’s workforce was estimated to be 624,400
while the unemployment rate was 3.9%.
Between the decennial censuses of 1980 and 2000, Allegheny County experienced one of
the largest population losses in the nation, falling from 1,450,195 in 1980 to 1,281,666 in
2000, for a total loss of 11.6%. During July 2000 to July 2005, Allegheny County had a further
population loss of 43,976 people, thus experiencing a 3.4% decrease countywide. While
some municipalities in the county are experiencing growth and economic advancement, the
majority of those that are experiencing population loss and economic decline can be
characterized as old industrial centers along the rivers.
Butler County, located directly north of Allegheny County was the fastest growing county in
southwestern Pennsylvania during 1990 – 2000, with a population increase of 14.5%.
However, developed lands only represent 5.1% of the county’s total land area.
The county workforce averaged 95,465 persons during 2006, a very slight increase of 2005’s
average of 95,267. The counties unemployment rate continues to be among the lowest in the
region at 4.8% in 2005 and 4.5% in 2006.
Much of the county’s growth has occurred in Cranberry Township at the very southeast
corner along the Interstate 79 corridor with easy access to Pittsburgh, less than 20 miles
away. Additional growth is expected. In 2007, Westinghouse selected a business park in
Cranberry as its new headquarters. This project is expected to bring 3,000 jobs to the site by
2010, with most as relocations from their current facility in Monroeville, Allegheny County.
Montour County is located in Central Pennsylvania - a semi-agricultural region with slightly
over 50 percent in crops and pasture lands and 36% in woodlands. Manufacturing is the
major industry, and health care services employ a considerable portion of the population in
and around the county. Montour County remains relatively stable in population and
economy, with the development of a number of diverse industries and branches of national
manufacturing corporations.
Perry County, with a land area of 554 sq miles and a population density of approximately 80
people per sq mile, is situated in the southern most portion of the SEDA-COG region and is
located in close proximity to the state’s capital, Harrisburg. According to the 2000 Census County to County Worker Flow Files, approximately 70% of the employed residents in Perry
County travel outside of their county for work, as a result, Perry County’s monthly
Pennsylvania FFY 2008 Strategy Statement
21
unemployment rate has, for the most part, remained below both the state and the nation’s
unemployment rate. The average annual unemployment rate for the county as of July 2007
is 3.9%, while the Commonwealth stands at 4.4% and the nation stands at 4.5%. The
county’s top employers are in the transportation and warehousing, public administration, and
education sectors.
AT-RISK COUNTY DESIGNATION
Pennsylvania has two counties designated as At-Risk in FY 2008 - Fayette and Greene.
Located in southwestern Pennsylvania, Fayette County residents continue to encounter longterm obstacles affecting their economic quality of life. Persistent challenges remain in the
development of basic infrastructure and employment opportunities. The county is facing a
delicate balance, where remnants of the past need to be constructively linked to opportunities
of the future.
During 2005 and 2006, the county’s average per capita income was $17,561 well below the
state and national averages of $24,642 and $25,151 respectively. Also during the past two
years, the county’s unemployment rate of 6.7% was well above the state and national
average of 4.8%.
Located in the far southwestern corner of the state, Greene County’s economic state has
experienced little improvement due to limited access and development opportunities as a
result of its topography. Additionally, most of the county lacks adequate sewer infrastructure
for possible business developments and its current residents.
During 2005 and 2006, the county’s average unemployment rate was 6.1% well above the
state and national average of 4.8%. At the time of the 2000 census, the county’s poverty rate
was 18% while the state and national average were 11% and 12% and respectively.
Pennsylvania FFY 2008 Strategy Statement
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Section III: Goals, Objectives and Strategies
Pennsylvania’s FY 2008 strategy statement continues to reflect the Commonwealth’s
Keystone Principles for Growth, Investment & Resource Conservation developed by
Governor Rendell’s Economic Development Cabinet. They include a set of principles and
criteria that will be used by state agencies to guide investment and support local growth and
economic development across the commonwealth.
The principles and criteria realize Governor Rendell’s vision that the state needs to offer
vibrant, clean and beautiful communities if families and businesses are going to call
Pennsylvania home.
The principles build on the recent success of Governor Rendell’s Growing Greener II
initiative, which takes as a core precept that, in this era of mobile capital and intense global
competition, the state needs to offer a higher quality of life to win the race for new business
development. Those values are now part of every investment decision the Commonwealth
makes.
The 10 principles are:

Redevelop first -- Support revitalization of Pennsylvania’s many cities and towns and
give funding preference to reuse and redevelopment of “brownfield” and previously
developed sites in urban, suburban, and rural communities.

Provide efficient infrastructure -- Fix it first: use and improve existing infrastructure.
Make highway and public transportation investments that use context sensitive design
to improve existing developed areas and attract residents and visitors to these places.
Require private and public expansions of service to be consistent with approved
comprehensive plans and consistent implementing ordinances.

Concentrate development -- Support infill and “greenfield” development that is
compact, conserves land, and is integrated with existing or planned transportation,
water and sewer services, and schools. Foster creation of well-designed
developments and neighborhoods that offer healthy life style opportunities for
Pennsylvania residents.

Increase job opportunities -- Retain and attract a diverse, educated workforce
through the quality of economic opportunity and quality of life offered in Pennsylvania’s
varied communities. Integrate educational and job training opportunities for workers of
all ages with the workforce needs of businesses. Invest in businesses that offer good
paying, high quality jobs, and that are located near existing or planned water & sewer
infrastructure, housing, existing workforce, and transportation access (highway or
transit).
Pennsylvania FFY 2008 Strategy Statement
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
Foster sustainable businesses -- Strengthen natural resource based businesses
that use sustainable practices in energy production and use, agriculture, forestry,
fisheries, recreation and tourism. Increase our supply of renewable energy. Reduce
consumption of water, energy and materials to reduce foreign energy dependence and
address climate change.

Restore and enhance the environment -- Maintain and expand land, air and water
protection and conservation programs. Conserve and restore environmentally
sensitive lands and natural areas for ecological health, biodiversity and wildlife habitat.

Enhance recreational and heritage resources -- Maintain and improve recreational
and heritage assets and infrastructure throughout the commonwealth, including parks
and forests, greenways and trails, heritage parks, historic sites and resources, fishing
and boating areas and game lands offering recreational and cultural opportunities to
Pennsylvanians and visitors.

Expand housing opportunities -- Support the construction and rehabilitation of
housing of all types to meet the needs of people of all incomes and abilities. Support
local projects that are based on a comprehensive vision or plan, have significant
potential impact (e.g., increased tax base, private investment), and demonstrate local
capacity, technical ability and leadership to implement the project.

Plan regionally, implement locally -- Support multi-municipal, county and local
government planning and implementation that has broad public input and support and
is consistent with these principles. Provide education, training, technical assistance,
and funding for such planning and for transportation, infrastructure, economic
development, housing, mixed use and conservation projects that implement such
plans.

Be fair -- Support equitable sharing of the benefits and burdens of development.
Provide technical and strategic support for inclusive community planning to ensure
social, economic, and environmental goals are met.
These principles have been aggressively conveyed to our partners charged with helping
us identify and develop projects throughout Appalachia PA and will serve us the basis for
project selection and implementation. Projects considered for ARC funding will be given
highest priority when based upon the Keystone Principles for Growth, Investment &
Resource Conservation.
Pennsylvania FFY 2008 Strategy Statement
24
ARC GOAL # 1
INCREASE JOB OPPORTUNITIES AND PER CAPITA INCOME IN
APPALACHIA TO REACH PARITY WITH THE NATION
Pennsylvania’s Appalachian region continues to demand family-sustaining jobs through
additional market development and aggressive entrepreneurial development. Traditional
manufacturing, along with an emphasis on new technologies will continue to be major areas
of emphasis. In addition, opportunities centered on cultural, historical, natural and
geographic assets will be actively promoted.
State Objective 1.1:
Pennsylvania will promote a high growth, diverse economy
by creating more opportunities for higher-wage jobs by
increasing the number of successful small businesses and
gazelle firms.
PA Strategy (1.1.1) Target increased technical and financial assistance to
Pennsylvania’s two largest industry segments – agriculture and
tourism.
PA Strategy (1.1.2) Support the transfer of new processes and product technologies
that increase productivity and create new entrepreneurial
opportunities.
PA Strategy (1.1.3) Support strategic alliances with institutions of higher education,
local economic development organizations and private sector
representatives to encourage joint entrepreneurship activities.
PA Strategy (1.1.4) Support economic activities designed to promote increased
venture capital and international investment in Appalachian
Pennsylvania
PA Strategy (1.1.5) Provide targeted incentives, technical assistance and other riskreduction activities designed to encourage job growth and
entrepreneurial activities in the fields of energy conservation, as
well as the conventional and renewable energy sectors.
State Objective 1.2:
Businesses in Appalachia Pennsylvania will have access to a
broad range of regionally-based and need-driven enterprise
development assistance for the purpose of market expansion
and diversification resulting in increased sales and job
growth.
Pennsylvania FFY 2008 Strategy Statement
25
PA Strategy (1.2.1) Promote one-on-one consulting in the field of international
business development, government marketing, and business
financing.
PA Strategy (1.2.2) Utilize Internet-based technologies to deliver training and
instruction for business creation and expansion.
PA Strategy (1.2.3) Pennsylvania’s enterprise development strategy will include
regional initiatives developed through the strategic planning
process of the Local Development Districts. This may include
workforce
development,
planning,
e-commerce,
telecommunications, energy independence, etc.
PA Strategy (1.2.4) Initiatives will be supported that are designed to target strategic
business clusters.
PA Strategy (1.2.5) Provide technical, financial and infrastructure assistance to those
communities facing the loss of a region’s major employer.
PA Strategy (1.2.6) Implement
recommendations
from
the
IBM
Global
Competitiveness Initiative to promote business development in the
integrated biopharmaceutical manufacturing, biotech research,
alternative energy, agro-food processing, digital media, and prefabricated housing segments.
PA Strategy (1.2.7) Support business development activities that promote the
expansion of supply chain activities among businesses capable of
serving the energy sectors.
State Objective 1.3:
Appalachian residents in rural area will have access to
enhanced entrepreneurial opportunities.
PA Strategy (1.3.1) Support regional entrepreneurial networks designed to promote
collaboration among public/private service providers.
PA Strategy (1.3.2) Support web-based initiatives designed to provide prompt and
practical entrepreneurial information to citizen and business
owners.
PA Strategy (1.3.3) Encourage business ownership as a career vocation to students
by supporting youth entrepreneurship activities.
PA Strategy (1.3.4) Support activities such as business plan competitions and
incubation programs to fuel the expansion and growth of
entrepreneurial activity.
Pennsylvania FFY 2008 Strategy Statement
26
PA Strategy (1.3.5) Promote asset-based entrepreneurial development based upon
historical, cultural, structural and geographic resources.
State Objective 1.4:
Appalachian communities will increase community and
economic activity by developing and marketing local
strategic assets.
PA Strategy (1.4.1) Develop initiatives to support heritage and eco-tourism
development through assessments, technical assistance and
marketing campaigns.
PA Strategy (1.4.2) Promote asset-based development opportunities by encouraging
economic and community development organizations to utilize
their historical, environmental and cultural resources.
PA Strategy (1.4.3) Promote regional development along PA’s vast river network and
greenways.
State Objective 1.5:
Pennsylvania will have citizens and local leaders capable of
working with local, state and federal resources to effect
positive economic change.
PA Strategy (1.5.1) Initiate training activities to increase the skills of individuals and
groups to effectively identify community needs and develop plans
to improve economic viability.
PA Strategy (1.5.2) Promote regional partnerships and joint activities among
government, business, and nonprofit organizations to reach
common goals.
State Objective 1.6
Pennsylvania will expand the market for clean, indigenous
energy resources, and enhance energy diversity and energy
security, while stimulating economic development and job
creation in an environmentally beneficial manner.
PA Strategy (1.6.1) Promote energy security and job creation through the support of
advanced energy technologies. Through programs such as
Energy Harvest, PA will support initiatives that promote
awareness and build markets for cleaner or renewable energy
technologies
PA Strategy (1.6.2) Foster economic development by encouraging the transfer and
commercialization of innovative energy technologies and the use
of fuels indigenous to the Commonwealth.
Pennsylvania FFY 2008 Strategy Statement
27
ARC GOAL #2
STRENGTHEN THE CAPACITY OF THE PEOPLE OF APPALACHIA TO
COMPETE IN THE GLOBAL ECONOMY
Pennsylvania’s Appalachian residents will be provided with the tools and resources to reach
economic parity with the rest of the nation. Local government and community leaders will
develop the capacity to move our region forward, and affordable health care will expand to
our neediest citizens.
State Objective 2.1:
The percent of Appalachian students and teachers
participating in school-readiness, college preparatory
courses, vocational training, and school incentive programs
will increase thereby raising the college going rate, and
preparing students and teachers for challenges in the 21st
century.
PA Strategy (2.1.1) Promote early childhood education programs for pre-school
training.
PA Strategy (2.1.2) Support student achievement programs and Family Resource
Centers to improve reading and math scores of Appalachian
students.
PA Strategy (2.1.3) Incentivize schools by providing resources for the development of
teacher improvement plans.
State Objective 2.2:
Appalachian residents will receive advanced skills training to
acquire and maintain family-sustaining jobs.
PA Strategy (2.2.1) Utilize Pennsylvania’s community college system and other
educational institutions to improve the workforce training delivery
network along with other public/private providers.
PA Strategy (2.2.2) Promote employer-led consortia to identify critical job vacancies
and needed skills.
PA Strategy (2.2.3) Increase the accountability of workforce training providers by
developing common performance measures.
PA Strategy (2.2.4) Promote the use of high-technology tools for the education of
students as a means to deliver workforce training.
Pennsylvania FFY 2008 Strategy Statement
28
PA Strategy (2.2.5) Train Appalachian residents on the methodologies needed to
develop and expand our natural, cultural, historical and
energy-related resources.
State Objective 2.3:
Appalachian residents and business owners will have access
to
institutions
of
higher
learning
that
promote
entrepreneurship and innovation as well as continuing
education.
PA Strategy (2.3.1) Create and support Keystone Innovation Zones (KIZs) to spur
innovation and entrepreneurial activity.
PA Strategy (2.3.2) Target investment in the knowledge-based communities where
educational institutions are located.
PA Strategy (2.3.3) Promote the development of critical job skill training programs to
address workforce shortage issues.
PA Strategy (2.3.4) Expand or establish technical training centers designed to
improve workforce skills in rural Appalachia.
State Objective 2.4:
Pennsylvania will provide planning, technical assistance, and
management services to local governments and community
and economic development organizations to promote
efficient and effective local leadership and improved civic
capacity.
PA Strategy (2.4.1) Utilize the Governor’s Center for Local Government Services and
other organizations to provide training and program coordination
to local officials in areas such as administration, finance,
management, land use planning, transportation, zoning, energy
conservation, security, broadband and community and economic
development. This may also include activities that promote
regional consolidation of services.
PA Strategy (2.4.2) Provide technical assistance to communities involved in the
process of identifying and creating Tax Increment Financing (TIF)
districts for the purpose of developing blighted areas.
PA Strategy (2.4.3) Community and economic development service providers will be
encouraged to provide staff with professional development
training with an emphasis on Governor Rendell’s Plan for a New
Pennsylvania.
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PA Strategy (2.4.4) Assist local governments with technology implementation through
the ongoing Municipal Technical Assistance Program (MTAP)
offered by the Local Development Districts.
PA Strategy (2.4.5) Provide consolidated technical assistance to community and
economic groups for the purpose of developing and administering
projects in the region.
State Objective 2.5:
Pennsylvania will empower community leaders throughout
the region to serve as sparkplugs for community and
economic development projects and general capacity
building.
PA Strategy (2.5.1) Support local and regionally-based leadership development
programs to encourage cooperation and collaboration as well as
strategic planning and information sharing.
PA Strategy (2.5.2) Partner with state and federal organizations to disseminate
information on the types of resources available to small and rural
communities.
PA Strategy (2.5.3) Utilize models such as the Appalachian Community Learning
Program (ACLP) and the Pennsylvania Downtown Center to
increase civic capacity.
PA Strategy (2.5.4) Promote youth leadership activities to introduce our young people
to the concepts associated with healthy community involvement.
PA Strategy (2.5.5) Promote the principles of asset-based development to encourage
local leaders to integrate the natural, cultural, historical and
energy resources in community and economic development
activities/projects.
PA Strategy (2.5.6) Support initiatives designed to educate Appalachian residents on
the benefits and means of effective energy conservation.
State Objective 2.6:
Pennsylvania will foster an integrated health-care system
designed to provide Appalachian children, adults and elderly
citizens with access to quality care at a reasonable cost.
PA Strategy (2.6.1) Continue to support the J-1 Visa program as a tool to recruit
physicians to our neediest areas.
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PA Strategy (2.6.2) Employ the use of the latest technological resources such as
remote monitoring devices to lower health care costs while
maintaining a high degree of quality care.
PA Strategy (2.6.3) Analyze specific health care need of Appalachian residents for the
purpose of directing resources to combat illness, disease and
spiraling costs.
PA Strategy (2.6.4) Support organizations specializing in addressing the health care
needs of rural areas to identify and develop wellness programs
and other activities to combat areas of health-distress.
PA Strategy (2.6.5) Develop and expand programs designed to help rural businesses
offer affordable health-care coverage to employees and
dependents.
ARC GOAL # 3
DEVELOP AND IMPROVE APPALACHIA’S INFRASTRUCTURE TO MAKE
THE REGION ECONOMICALLY COMPETITIVE
Pennsylvania will deliver clean drinking water to its communities while providing affordable
housing, modern places to start and maintain businesses, and access to the entire world via
broadband.
State Objective 3.1:
All Appalachian communities will have access to safe
drinking water; sanitary sewer and waste disposal systems;
and basic infrastructure.
PA Strategy (3.1.1) Support efforts to provide a safe and secure water/sewer system
for residents of Appalachia through collaborative projects with
state and federal agencies such as EDA, USDA, PennVest, etc.
PA Strategy (3.1.2) Promote multi-county approaches and partnerships with public
and private sector entities to manage solid waste disposal, water
and wastewater treatment. Support waste recycling and new
disposal technologies.
PA Strategy (3.1.3) Support the PennStep program which educates small, rural
communities on the processes to meet water/sewer needs
through local involvement and action (self-help).
Pennsylvania FFY 2008 Strategy Statement
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PA Strategy (3.1.4) Provide housing and redevelopment assistance to ensure a basic
standard of living and improved economic potential for our
communities.
State Objective 3.2:
There will be a new or renewed active industrial site,
business park or business incubator within a reasonable
commute of all Appalachians for enhanced job creation and
business development opportunities.
PA Strategy (3.2.1) Support the Pennsylvania Business in our Sites program which
creates site-ready properties focused on generating economic
growth in needy areas.
PA Strategy (3.2.2) Stimulate
business
infrastructure
development
along
Pennsylvania’s Appalachian Development Highway System
(ADHS) corridors.
PA Strategy (3.2.3) Coordinate regional planning efforts to serve commercial and
industrial purposes.
PA Strategy (3.2.4) Engage in infrastructure and construction activities that will
generate value-added job creation and business expansion. This
may include, but is not limited to business incubators, multi-tenant
facilities, industrial parks and ancillary infrastructure needs such
as parking and access roads.
State Objective 3.3:
Pennsylvania will rebuild our communities by focusing on
housing, site acquisition, preparation, and redevelopment.
PA Strategy (3.3.1) Support Main Street projects that will lead
improvements in downtown business districts.
to
physical
PA Strategy (3.3.2) Through the Elm Street program, provide resources to encourage
improvements in Appalachian residential communities.
State Objective 3.4:
Pennsylvania will bridge the digital divide in the Appalachian
region by delivering broadband resources to residents and
businesses.
PA Strategy (3.4.1) Support the deployment of affordable access to advanced
communications through the use of multiple technologies.
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PA Strategy (3.4.2) Develop initiatives such as training programs, consulting and
demonstration projects to increase the readiness of industry
groups and businesses to engage in e-commerce.
PA Strategy (3.4.3) Sponsor demand aggregation programs to encourage private
sector investment of broadband technology.
PA Strategy (3.4.4) Support the installation of telecommunication conduit during
construction or renovation of public infrastructure.
State Objective 3.5:
Pennsylvania will provide communities with the resources
needed to spur locally-driven economic development.
PA Strategy (3.5.1) Utilize ARC resources to leverage projects that qualify for the
HUD 108 Loan Pool. Uses may include the provision of matching
dollars or related technical assistance.
PA Strategy (3.5.2) Support revitalization efforts that re-use brownfields and existing
infrastructure to create new businesses, homes and community
resources.
PA Strategy (3.5.3) Promote infrastructure investment that compliments and utilizes
the region’s natural beauty, landscape and historical/cultural
heritage.
PA Strategy (3.5.4) Improve and expand our intermodal methods of transportation to
more effectively move people and goods.
PA Strategy (3.5.5) Continue to allocate resources for development and improvement
of access roads for economic and community activities.
PA Strategy (3.5.6) Support community infrastructure improvements designed to
retain major employers or newly-formed companies originating
from management buyouts.
State Objective 3.6:
Pennsylvania will invest in the future by turning existing
infrastructure into vibrant new business, cleaning up the
environment and creating lively towns and neighborhoods
through the Growing Greener II initiative.
PA Strategy (3.6.1) Clean up Pennsylvania's polluted streams and improve the health
of our rivers and streams affected by runoff from mines and other
pollution, restoring these waters to full use for our communities
and outdoor enthusiasts.
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PA Strategy (3.6.2) Reclaim abandoned mines and toxic waste sites for productive
uses.
PA Strategy (3.6.3) Invest in alternative energy production including wind farms, solar
cells and alternative fuels.
PA Strategy (3.6.4) PA will support programs that preserve working farms, open
space and natural areas, and improve state parks and
infrastructure that support fish and wildlife habitat so tourists and
Pennsylvanians can fully enjoy these treasures again.
PA Strategy (3.6.5) Restore communities and expand affordable housing by improving
community parks, and investing in housing and community
redevelopment.
ARC GOAL # 4
BUILD THE APPALACHIAN DEVELOPMENT HIGHWAY SYSTEM
TO REDUCE APPALACHIAN ISOLATION
Pennsylvania’s and its visitors will transverse the state via a modern highway system that
effectively and efficiently promotes global commerce.
State Objective 4.1:
Pennsylvania will develop a balanced transportation system
which is supportive of economic growth and investment
potential in the region.
PA Strategy (4.1.1) Identify for completion, critical Appalachian Development Highway
System (ADHS) interchanges and priority miles.
PA Strategy (4.1.2) Effectively and efficiently continue to develop the ADHS by
soliciting input from local private and public officials.
PA Strategy (4.1.3) Pennsylvania’s Department of Transportation will adhere to all
federal statutes to ensure accountability of funds and cooperate
with contiguous member states.
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Section IV: Pennsylvania ARC Program Policies
PROJECT SOLICITATION & SELECTION
All project pre-applications are screened initially to determine if they are eligible for funding
consideration. The screening process determines consistency with the Commission’s four (4)
goals and reviews the pre-application for completeness, accuracy and project feasibility. This
process also evaluates whether the project is consistent with Pennsylvania’s objectives and
strategies. As stated previously, projects will be evaluated and selected utilizing the
Keystone Principles for Growth, Investment and Resource Conservation.
The Commonwealth will look favorably at projects where there are new business start-ups
and job creation and those projects that will enhance the community and economic vitality of
the state. Support of projects that represent aggressive, comprehensive economic and
community development opportunities will allow Pennsylvania’s ARC program to directly
compliment the strategies of the Rendell Administration. When approving a particular project,
the state will also consider whether the project will improve, on a continuing rather than a
temporary basis, the opportunities for employment, and the average level of income or
economic and social development of the area served by the project.
General Policies
1. Each application for funding must contain detailed output and outcome
measurements by which grant expenditures may be evaluated.
2. Applications must identify the ARC Goal(s) being met along with the
corresponding state strategy.
3. Priority is given to those projects which demonstrate a high degree of readiness,
i.e. other funding sources committed, firm cost figures, Basic Federal Agency
involvement, etc.
4. Grants funded under Section 214 of the Appalachian Regional Development Act
(ARDA) shall include cost estimates valid not more than twelve (12) months prior
to project application submission to ARC.
5. Deliverable impact shall be identified prior to funding additional phases of projects.
6. Pennsylvania will not establish dollar caps for ARC projects.
7. Grants funded under Section 214 of the ARDA that have a commitment from a
company will be reviewed in the highest of priority when recommendations for
funding are made.
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8. Pennsylvania will generally not fund a specific initiative for more than three years.
However, exceptions may be granted on a case-by-case basis as need dictates.
9. Pennsylvania will utilize the annual priority lists submitted by the Local
Development Districts and ranked by their Boards of Directors as a primary, but
not exclusive, basis for project identification and selection.
10. Pennsylvania may invite the submission of back-up projects which may be
selected to replace projects that fallout during the course of review in situations
such as ineligibility, loss of matching funds, etc.
APPLICATION DEADLINES
Applicants invited to submit full applications must meet all deadlines established by the
Center for Appalachian Development. Applications are not considered complete and timely
unless all pertinent documentation is included in the project package. This includes match
commitment letters. Pennsylvania supports ARC’s efforts to obligate all available funds by
the end of the fiscal year and will act accordingly if applications are not submitted in a timely
fashion.
MATCHING REQUIREMENTS
In general, the Commonwealth expects a recipient of an ARC grant to contribute its own
resources to a project to the extent it is able to do so and seek additional non-ARC funding
assistance in a tenacious manner. Matching funds should be identified by amount and
source with evidence of assurance that such funds are available. In addition to the ARDA
match requirements described in the ARC Project Guidelines, Pennsylvania’s ARC
participation costs will be limited to 50 percent of project costs, with the following exceptions:
Section 7.6 of the ARC Code restricts ARC assistance to 30% of eligible project costs on
most projects located in an ARC designated competitive counties (Allegheny, Butler Montour,
Perry) except for projects noted in Section 7.6d of the code. This restriction may also be
waived, or modified in accordance with the code.
Projects located in an ARC designated attainment county (currently none in PA) are ineligible
for any ARC assistance. This restriction may be waived, or modified by a demonstration in
accordance with Section 7.6f of the code.
Grants funded under Section 302(a) will comply with the terms of the ARDA, which require a
50%-50% matching requirement.
Funding for work on the Appalachian Development Highway System is allowed at 80%
wherever the project is located.
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When funding for an access road project is under section 214, the project will be subject to
the general funding limits (80% distressed, 50% transitional, and 30% competitive. When
funding for an access road project is under 201 (Federal Highway Administration) the project
may be funded at 80% in transitional and distressed counties and 30% in competitive
counties.
Pennsylvania may use the discretionary grant authority contained in section 302 of ARDA to
increase ARC participation above the statutory limits in projects implementing Regional
Initiatives. The discretionary authority, however, cannot be used to eliminate the funding
restrictions on projects in competitive and attainment counties. Pennsylvania may use all or
a portion of its allocated authority for projects involving emergency economic distress upon
approval of the Co-chair’s Committee.
Multi-County Projects - Matching Requirements:
Special matching rules apply to projects that are carried out in more than one county.
Projects may be funded at the average match limits for the counties if at least one county is
competitive and there are no distressed or attainment counties.
Examples:
Seven transitional @ 50% and two competitive @ 30%
50+50+50+50+50+50+50+30+=380/9=42.2%
Project may be funded at 42%
Two transitional @ 50% and two competitive @ 30%
50+50+30+30+=160/4=40%
Project may be funded at 40%
The portion of project costs attributable to an attainment county in multi- county project not
including a distressed county will be considered ineligible for ARC assistance and may not be
considered for matching purposes. After excluding the attainment portion of the project, the
match should be calculated as in the example below but using only the eligible counties and
costs.
Example:
Seven transitional counties, one competitive county, and one attainment county in a training
project with a total project cost of $100,000.
It is estimated that 30% of the individuals receiving the training will be from the attainment
county; therefore, 30% of the project can be considered as attributable to the attainment
county's participation.
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Exclude this 30% from the ARC eligible project, and then allow ARC participation for the
remainder as follows:
Total project cost less ineligible participation for attainment county = eligible project cost.
$100,000 - $30,000 = $70,000 eligible cost
Seven transitional counties @ 50% and one competitive county @ 30%
50+50+50+50+50+50+50+30 = 47.5%
Project may be funded at 48% of eligible cost
WAIVERS
Waiver to Proceed - Pennsylvania: Commission approval of a project for construction,
renovation or equipment pursuant to Section 303 of the Act must take place prior to the
letting of any contract. Pennsylvania may waive this requirement prior to such contract letting
upon a finding that conditions warrant such action. The waiver approval does not relieve the
applicant of the responsibility to obtain necessary authorization from the basic agency to
award a contract under the agency’s rules and regulation.
Project Waiver Restriction-ARC: The restrictions on projects located in competitive and
attainment counties can be waived by the Commission upon a showing of (1) the existence of
a significant pocket of distress in the part of the county in which the project is carried out or
(2) the existence of a significant potential benefit from the project in 1 or more areas of the
region outside the designated economically strong county in which the project is carried out.
Waiver requests are made by the State Alternate representing the potential grantee and such
requests must be approved by the Federal Co-Chairman and the Alternates.
COST OVERRUNS/UNDERRUNS
When project cost underruns occur, ARC funds will generally be de-obligated and made
available for other eligible projects. Cost overruns will be considered as separate projects
and will be subject to normal project selection criteria.
PROJECT MONITORING AND PROGRESS EVALUATION
ARC projects will be monitored by staff on a regular basis to assess progress in meeting
scheduled milestones and to identify and resolve any problems that may have occurred in
project performance. On-site inspections may be done at the midpoint and at project
completion to ensure compliance with approved project scope by State and ARC staff.
Interim monitoring will usually be done by telephone. These monitoring reports will be
incorporated into an electronic project management system to generate project status reports
on all ARC funded projects.
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Statistical Sources
PA statistical data used in the preparation of this Strategy Statement was collected from the
following sources:
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A Rural Economic Reality Check - Center for Rural PA
County Business Pattern, U.S. Census Bureau
Industry Trends, Department of Labor and Industry
Decennial Census
Infrastructure Makes It All Work – Center for Rural PA
Building a High Growth Economy – PA Office of the Budget
Transportation: The Road Rules – Center for Rural PA
Health Care Access and Affordability – Center for Rural PA
The Plan for a New Pennsylvania
About Rural PA – Center for Rural PA
Newsletters – Center for Rural PA
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