Kentucky coal and energy communities are in prime position for transformation. For centuries, the picturesque landscapes of the state have been intertwined with the coal and fossil fuel industry, serving as the backbone of the nation’s energy demands and shaping the economy over generations.
Now, as the tides of energy policy change, the Bluegrass State’s coal and energy communities find themselves at a turning point and an unprecedented opportunity for revitalization.
Recognizing the far-reaching impact of fossil fuel job losses, the federal government has prioritized more than $900 billion to support 25 regions across the country, including two critical areas of the commonwealth: a collection of 21 counties in Eastern Kentucky and 20 counties in Western Kentucky.
The goal of this immense funding is to spur economic development, STEM (science, technology, engineering and math) education programs, infrastructure improvements, housing, agriculture projects, substance-use recovery programs—the list goes on.
Much of the funding comes in the form of federal grants, so while the opportunities are broad and sweeping, there is a significant hurdle to accessing these dollars.
Most federal grants require a local match, with applicants expected to contribute funding in order to qualify for the award. This matching component can range from 10 to 20 to even 50% percent of the total grant. For multimillion-dollar projects, the matching component can be a challenging or even impossible task for economically distressed areas.
It’s a vicious cycle: Where the need is greatest, the local funding for the match is most scarce.
So, what’s the solution?
Neighboring states like Indiana, West Virginia and Ohio have created pools of funding to leverage towards federal grants. Early successes in Indiana have shown a near 20:1 return. Billions in federal and private investment are pouring into our northern neighbor as a result of their READI grant program.
Where’s Kentucky in this effort?
Upon learning about the federal prioritization, the Kentucky General Assembly sprang into action. Championed by Rep. Richard Heath (R-Mayfield) and Rep. Jason Petrie (R-Elkton), the 2023 session’s House Bill 9 created the GRANT Program, which stands for Government Resources Accelerating Needed Transformation.
The GRANT Program creates a fund and framework for local governments, area development districts, nonprofits and coalitions of these groups to apply to the state for the matching components of federal grants. Applicants must demonstrate the federal grant opportunity’s public impact for at least one of the 41 federally identified counties.
The Department for Local Government plays a primary role in administering the GRANT Program, with support from the Area Development Districts, which will help local partners identify grant opportunities and assist with the application process.
“HB 9 and the GRANT Program have the power to reshape the state’s economy at the community level,” said Petrie.
“Success hinges on collaborating effectively so that communities can identify and pursue federal grant opportunities.”
For Heath, the GRANT Program “is a once in a lifetime opportunity to leverage federal funds to help build local economies in Eastern and Western Kentucky. We’d be foolish not to capitalize on an opportunity to help our rural communities.”
A safeguard has been put in place to ensure the effectiveness of the GRANT program: The state will release matching funds only if an applicant is successful in securing the federal grant. After the Department for Local Government has graded a state match application and determined to commit the necessary portion, the applicant will go on to submit the federal grant application. In the event an applicant fails to receive that federal grant, the committed funds will become available to use for other state-match applicants.
Grant Ready Kentucky, a statewide nonprofit, has been at the forefront of developing HB 9 and the GRANT Program, providing legislators with key data about federal grant opportunities and highlighting the barriers that rural communities face in accessing federal funds.
Executive Director Hannah Conover, CPA, and her team are focused on preparing nonprofits and local leaders for the tremendous opportunities ahead.
“This is once-in-a-generation funding to help economically distressed communities rebuild and revitalize. While we’re incredibly proud of the work already done, we realize that it’s just the beginning,” Conover said. “Grant Ready Kentucky will continue to provide capacity support through grant training, coaching, and technical assistance. State-wide collaboration and technical support will be critical to maximize the impact of these extraordinary funding levels.”
Heath, Petrie and other stakeholders continue to educate the General Assembly on the implementation progress of the GRANT Program. The July meeting of the Joint House and Senate Committee on Agriculture provided an extensive update on recent action and future plans.
These leaders understand that significant federal funding has major implications for the state budget, potentially enabling new spending and greater flexibility. For example, recent allocations from the American Rescue Plan were used to increase Kentucky’s broadband coverage, freeing up state funds that otherwise would have been necessary.
As the nation looks on, Kentucky finds itself at a critical juncture in history. Ensuring we take full advantage of this moment will take major public, private partnerships.
For information, visit grantreadyky.org and energycommunities.gov.