Louisville Metro Could Soon Be More Friendly To LGBT Business Owners Friday, Nov 22 2019 

When Louisville Metro requests bids for government contracts, it already makes an effort with women-, minority- and disabled-owned businesses. And soon lawmakers could consider expanding that opportunity to businesses owned and run by lesbian, gay, bisexual and transgender people.

The Metro Council could soon consider a change to its ordinance that codifies how it solicits bids from minority groups. The proposal, entered this week, seeks to include certified LGBT businesses in its efforts.

Cyndi Masters, the CEO and founder of digital agency DBS Interactive and a member of Louisville’s gay and lesbian chamber of commerce, said the change in language is validating. And she said it will be good for the city.

“It’s really smart, it’s really smart,” Masters said. “There’s a lot of loyalty from these marginalized communities, so when you include me, I’m pretty loyal to you. Especially if you included me before it was popular.”

Right now Louisville dedicates a small percentage of its business spending, which is known as procurement, to companies owned by women, minorities and disabled people. The new ordinance would specifically encourage proposals from LGBT-owned businesses, and would include dedicated outreach to those owners.

Jonathan Lovitz of the National Gay and Lesbian Chamber of Commerce, which is the body that certifies LGBT businesses, said they add about $1.7 trillion to the U.S. economy each year. So he said inviting them to the table makes good business sense.

“One of the problems and the reason that supplier diversity programs like this were established was because of the historic biases and discriminatory practices that so many communities felt… too often, the contract went to the golfing buddy of the procurement officer,” he said.

Lovitz said more and more cities are codifying efforts to contract with LGBT business owners. Just this year, Los Angeles, Chicago and Tampa have taken this kind of step. He said Louisville doing the same could send a message to the rest of Kentucky.

Although the city is known for its LGBTQ-friendliness, the same is not necessarily true of the state. Case in point: In 2017, the California attorney general banned state-funded travel to Kentucky over a law he said could lead to anti-LGBTQ discrimination.

Lovitz said that if Louisville adopts this ordinance change, it would signal an embrace of America’s diverse economic future. And with Democrat Andy Beshear taking office as governor next month, Lovitz sees more opportunities.

“We are very excited at the NGLCC to work with the new governor, as we have with governors across the country in adding not just LGBT- but disability- and veteran-owned businesses, who are usually the three categories left out of state procurement,” he said.

Louisville’s ordinance already covers businesses owned by disabled people, including a goal of spending half a percent of its procurement budget with them. But the ordinance still refers to that group as “handicapped.” The proposal filed this week seeks to update that language to say “disabled,” instead.

For business owner Cyndi Masters, who is also disabled, it’s an overdue change.

“Thank God. Thank God,” she said. “What an archaic word.”

She previously registered her business with the gay and lesbian chamber, as well as Disability:IN, which certifies disabled-owned businesses.

“Handicapped, it just has a negative connotation. It’s a belittling word,” she said.

Louisville Metro Councilwoman Jessica Green (D-1) introduced the ordinance this week. She said it’s common sense, and good for Louisville.

“We want to send a message that not only is it the right thing to do, but it is good business practice to be welcome to all businesses, no matter who they’re owned by,” she said.

The Community Affairs Committee will most likely consider the ordinance in December, following the Thanksgiving break.

Black Lung Trust Fund Likely Burdened by Murray Bankruptcy Wednesday, Nov 20 2019 

The recent bankruptcy of Murray Energy is likely to significantly increase the debt of a struggling federal trust fund that supports disabled miners’ health care expenses. 

According to court filings, Murray Energy could be responsible for as much as $155 million under the Black Lung Act and general workers’ compensation, but testimony from the Government Accountability Office shows that the company only offered $1.1 million in collateral to the Black Lung Disability Trust Fund. That means the struggling fund will likely have to take on at least some of that liability. 

The federal fund was established in 1978 to provide monthly stipends and health care coverage for miners disabled by black lung, a preventable and progressive workplace disease. The fund, which is supported by a per-ton tax on coal companies, currently covers expenses for some 25,000 miners and their dependents, and is expected to be $15 billion in debt by 2050. Last year, Congress failed to extend a higher per-ton tax rate, increasing the strain on the fund. 

A spokesperson for Senate Majority Leader Mitch McConnell of Kentucky said in an email to the ReSource, “While the temporary, higher tax expired last year, current benefits for our impacted miners and their families have been maintained. Senator McConnell will continue to ensure these important benefits are maintained. Additionally he will continue working on the many ways to help coal miners and the clinics that serve them across Kentucky.”

If the fund becomes insolvent, it may be bailed out by the Treasury’s general fund, effectively transferring the burden of caring for disabled miners from the industry that caused the illnesses to American taxpayers. 

“History shows that miners and their families will be forced to pay the price in the form of reduced eligibility for benefits if Congress allows the Black Lung Disability Trust Fund to sink deeper into debt,” Rep. Bobby Scott, chairman of the House Ed and Labor committee, said in a hearing this summer. Given the recent rise in the most severe form of black lung disease, Congress must take action to secure future benefits and health care for disabled miners.” 

A spokesperson for Murray Energy did not respond to a request for comment for this article, but in court filings, newly appointed Chief Executive Officer of Holdings Robert Moore said, “Although Murray has been able to outlast many of its competitors, mounting debt and legacy liability expenses have become too heavy of a burden to sustain under current industry conditions.”

According to recent testimony from the Government Accountability Office, there were 22 self-insured active coal operators as of June 2019. Only 10 of those had provided estimates for their total unfunded liability to the trust fund — that is, the potential debt that could be transferred to the federal government if the company filed for bankruptcy.

“An estimated black lung liability of over $310 million has been transferred to the trust fund from insolvent coal operators,” said GAO Director of Education, Workforce and Income Security Cindy Brown Barnes. “In addition to those liabilities being transferred, there’s also the beneficiaries that have come along with that. There’s been over 1500 beneficiaries that have been transferred to the trust fund as a result of the companies that we looked at from 2014 to 2016.” 

Brown Barnes could not confirm how much, if any, liability from Murray Energy would be transferred to the fund.  

“Just because a company is bankrupt, it doesn’t necessarily mean that the liabilities are going to be transferred to the trust fund,” Brown Barnes cautioned. “There’s one liability at the time of bankruptcy and then another liability that gets transferred to the fund. It’s not a one-to-one.”

A report further detailing that unfunded liability, and its implications for the solvency of the trust fund, is expected early next year. 

A Larger Pattern

As of October 29, Murray reported approximately $2.7 billion in funded debt and over $8 billion in actual or potential legacy liability obligations under pension and benefit plans, including the black lung trust fund. As Murray’s numerous secured creditors vie to recoup as much of their debts as they can, it is likely that there won’t be money left over to pay back environmental, retiree and health care debts. 

“When you have this pattern of a large company spinning off its least productive assets and loading those assets with obligations that it obviously doesn’t want to pay, it seems to look like it’s a strategy,” said Josh Macey, an assistant visiting professor at Cornell University. 

Macey is a co-author of a recent article in the Stanford Law Review titled, “Bankruptcy as Bailout: Coal Company Insolvency and the Erosion of Federal Law.” In that paper, Macey and his co-author found that since 2012, four of the nation’s largest coal producers used bankruptcy to discharge roughly $3.2 billion in retiree benefits and $1.9 billion in environmental debts, as well as $5.2 billion in other regulatory obligations. Those numbers were current as of April 2019, before the high-profile bankruptcies of Blackjewel, Blackhawk, and Murray Energy. 

Macey said Murray took a slightly different tack than other companies in similar positions. Rather than spinning off unprofitable assets into new companies that were designed to fail, Macey said, “Murray went about snatching [assets] up at a pretty frenzied pace, because it was able to in that way pledge more assets as collateral and give its own creditors tons and tons of collateral that ensured they, too, would be paid before miners and the environment.”

Louisville Plan To Use Surplus Funds For Pensions Makes Sense, Expert Says Wednesday, Nov 20 2019 

Louisville Metro had a budget surplus of about $4 million from the last fiscal year due to factors including a slowdown in spending and higher-than-expected corporate property tax payments. Now government officials say they want to put most of that money toward paying the city’s increasing pension bill, a strategy one expert said makes sense.

Some of Kentucky’s pensions are among the lowest-funded in the nation, and the state pensions Louisville participates in are less than 60 percent funded.

And city leaders expect that pension bill to rise significantly for the next several years. Some want to raise taxes, but one attempt to do that to avoid budget cuts this year failed and other some other tax options are limited by state law.

Now, with an unexpected $4 million available, there’s talk of using a chunk of those funds to offset the pension bill, which is expected to grow more than $10 million a year for the next several years. The city’s chief financial officer, Daniel Frockt, recently addressed the Metro Council’s budget committee, where he said the administration is suggesting dividing $2.7 million into payments over the next three years.

Frockt said pension payments are projected to take up more and more of the city’s budget in the future, so:

“The thought is that this offset will allow us to kind of manage the reductions needed in a little more humane manner and a little more organized manner,” he said.

Essentially, putting what may look like a drop in the bucket of estimated pension payments toward the total sum could help cushion the blow to the city’s budget later on.

But will it work?

“Using surplus budget monies is an effective way, a tried-and-true way, to deal with the problem,” said Keith Brainard with the nonprofit National Association of State Retirement Administrators.

Brainard said pension plans in Hawaii and Rhode Island, for example, have successfully used surplus money to increase their funding levels. But he thinks Louisville still needs a larger strategy for paying the required contribution while maintaining a budget for needed services.

The pension bill for this year is $100 million. City CFO Frockt projected the pension bill will reach $141 million by 2023.

Louisville Metro Government

Gerald Young, a researcher with the non-partisan, nonprofit Center for State and Local Government Excellence, said properly funding the pensions is important because the city has promised certain benefits to retirees. And if the pensions aren’t funded, it could hurt the city’s ability to attract good workers.

“It’s all part of recruiting and retaining a talented workforce,” Young said. “And with the low level of unemployment nationwide right now, that’s something that’s a real challenge for state and local employers competing with the private sector.”

Late last week, lawmakers introduced an ordinance with details of the proposal to allocate $2.7 million to a pension mitigation fund starting with the next fiscal year. They also recommended using some of the city’s surplus funds to move up a police recruit class after one was canceled amid budget cuts this year, and shore up the Rainy Day Fund. Lawmakers are expected to take a final vote on the allocations next month.

Nonprofit Offers Low-Interest Loans To Help Immigrants Continue Their Careers Tuesday, Nov 12 2019 

When immigrants move to the United States, their professional certifications don’t always transfer over. One Louisville nonprofit is offering small loans to help former doctors, nurses and others overcome the financial obstacles preventing them from pursuing their professions in their new home.

Ricardo Gonzalez moved to Louisville from San Juan, Puerto Rico, earlier this year after meeting a Puerto Rican woman who has lived here for decades. He was previously a real estate developer, attorney and U.S. government contractor in Puerto Rico.

“I moved to Louisville not only for love, but also for the stable economy,” he told a group of supporters Tuesday at an event for LHOME, a local nonprofit Community Development Financial Institution, which is providing loans to people like Gonzalez.

Puerto Rico is an American territory, but Gonzalez needs to study for and pass the Kentucky bar exam to practice law here.

When he came to Louisville, he got a real estate license but said he could not afford to pay for bar review courses and the test itself, until he got a loan from LHOME’s JobUp! program. He is one of three people to receive a loan since the program launched in October, according to LHOME. The JobUp! program is funded by Fifth Third Bank and provides loans up to $6,000.

LHOME CEO and president Amy Shir said the loans her organization provides are below market-rate, and that specific rates vary.

Mayor Greg Fischer spoke in support of the program at an announcement event, where he said most of Louisville’s population growth comes from foreign-born residents.

“Many of these immigrants come with tremendous skills from their home countries. They can be doctors and nurses, engineers,” he said. “But when they come to America, those skills don’t translate to what the American outline is.”

LHOME provides loan services to low- to moderate-income individuals, particularly in west and south Louisville. The organization also helps some people pay their property tax bills.

 

Portal 31: How A Closed Mine Opened New Prospects For One Coal Town Monday, Nov 11 2019 

Portal 31Devin Mefford is sitting in the squat metal buggy of a modified mantrip, the train-like shuttle coal miners use to travel underground. Mefford is dressed for work, in a hardhat and a navy shirt and pants with lime green reflective stripes.

It’s a uniform his father and grandfather — both Kentucky coal miners — would be familiar with.

Mefford does go into a mine every day, but not for the coal. He’s the tour guide at Portal 31, a train ride through a once-operational coal mine in Harlan County.

“People are amazed,” the 21-year-old says, gesturing to the dark mine entrance behind him.

Brittany Patterson | Ohio Valley ReSource

Portal 31 tour guide Devin Mefford.

Portal 31 first opened in 1917. A subsidiary of U.S. Steel operated the mine and built the nearby community of Lynch, which was at the time the world’s largest coal camp. At its height, 10,000 people lived in the community, including a diverse immigrant population from more than 30 countries.

When it closed its doors in 1963, Portal 31 had produced more than 120 million tons of coal. More than 40 years later, in 2009, the mine reopened — this time to tourists.

For 35 minutes visitors ride the rail cars, often in pitch darkness, on a journey not just through the mine, but back in time. The drawling voice of an actor playing a miner named Mike Mackenzie, or Mac, narrates.

“We’re going to visit the miners and see how it’s changed over the years,” he says. “First stop, 1919.”

An animatronic miner materializes out of the darkness. Another actor gives voice to an Italian immigrant named Joseph, who recounts what it was like for the thousands of people who came to work in the mines in the early 1900s. Next to his lifelike form is a robotic mule and chirping canary.

“The mine she’s cool and safe,” he says. “You will see to that won’t you cantante. As long as I can hear your song I know I’m safe.”

Brittany Patterson | Ohio Valley ReSource

A scene from inside Portal 31.

Visitors hear what it was like to mine for coal before and after mechanization. They also learn about Harlan County’s bloody conflicts over union organizing.

“This is a story that never needs to die. It’s a story that needs to be told,” Nick Sturgill, director of Portal 31 said. “People need to understand what these guys went through, but they also need to understand how prosperous a place this was at one time — what coal not only did for this city, but for this region, for this country, for this entire world.”

He said about 5,000 visitors from around the world take the ride under Black Mountain each year. It’s a bright spot for Lynch, which today is home to just a few hundred residents.

Like many former mining communities, in recent years Lynch and neighboring towns have turned their sights on attracting tourists. It’s often a costly endeavor, but in recent years the federal government has expanded its support for repurposing old mine lands as new economic engines, including to draw new visitors.

Federal Role

Alexandra Kanik | Ohio Valley ReSource

Portal 31 was part of that effort. In 2018, the attraction was awarded a $2.55 million Abandoned Mine Land Pilot grant. The funding will be used to update the ride as well as nearby historic buildings for use as retail and office space. Some of the money is slated to go to a new parking lot and scenic overlook at nearby Black Mountain.

“The main outlook on the AML grant is to really just be a shot in the arm for all of Lynch as well as Harlan County,” Sturgill said.

Alexandra Kanik | Ohio Valley ReSource

Central Appalachia has thousands of acres of abandoned mine sites that can threaten local economies and people’s health and safety. In 1977, Congress created the Abandoned Mine Land Reclamation Program to clean them up. The funds come from fees paid by active coal mine operators on each ton of coal mined. The fee and authorization of the AML Program is set to expire in 2021 without Congressional action.

The AML Program chiefly provides funding for reclamation.  In the last five years, federal support has grown for a slightly different approach — going beyond merely sealing mine portals and treating polluted water to supporting projects that could grow local economies.

Alexandra Kanik | Ohio Valley ReSource

The Appalachian Regional Commission in 2015 began investing in coal-impacted communities through Partnerships for Opportunity and Workforce and Economic Revitalization, or POWER Initiative. Congress appropriated money from the U.S. Treasury to create the AML Pilot program in 2016, aimed at not only boosting reclamation work in the highest-need Appalachian states, but promoting projects that spur economic development and growth on abandoned mine lands.

“There’s significant economic benefits that communities can get from embracing mine reclamation,” said Joey James, with the Reclaiming Appalachia Coalition, which advocates for sustainable reclamation investment. “There’s also opportunities to repower some of these sites that were once the lifeblood of these communities.”

James, who is a senior strategist at West Virginia-based Downstream Strategies, said projects with federal backing can attract other investors looking to make an impact.

“While these federal programs are really, really important, and we need to have them, I think what the AML Pilot program does is it offers an opportunity to develop enterprises on former mine sites that might pull private capital and create models for redeveloping and reusing mine sites that won’t rely entirely on federal funding,” he said.

Brittany Patterson | Ohio Valley ReSource

The Portal 31 attraction takes visitors into an underground coal mine.

Another federal proposal, the RECLAIM Act, would accelerate reclamation of abandoned mine land by dispersing $1 billion of Abandoned Mine Land funds over a 5-year period with an eye toward economic development. That bill has not been passed by Congress despite bipartisan support.

Critics argue the millions poured into these programs have failed to produce the desired outcomes. Some efforts planting lavender or apple trees on old strip mines have floundered. James said it’s important to objectively assess the effectiveness of projects receiving federal funding.

“If states are investing in projects that aren’t providing that opportunity in the future, we need to think of how we can be better,” he said.

Growing Pride

Back inside Portal 31, the mantrip snakes its way back toward daylight.

A group of visitors from South Carolina is milling around in the small gift shop. They’re visiting the area on a mission trip. A gaggle of middle school-aged kids excitedly share what they learned.

“We learned how difficult it was and how dangerous it is for them,” one says. Another adds his amazement that Portal 31 holds the record for most coal mined in a single day — a record set in 1923.

Brittany Patterson | Ohio Valley ReSource

Devin Mefford emerges from Portal 31.

Mefford, the guide, takes questions at the end of the tour. He says the most common one he’s asked is if coal is coming back.

“In all honesty, coal mining is a thing of the past, and it’s sad to say that for small towns like mine,” he says.

But he adds that makes Portal 31, and federal investment into both preserving and showcasing Kentucky’s coal heritage, even more important.

“Every person in this community deserves to have something to be proud of, and that’s what we do here,” he said.

Murray Energy’s Bankruptcy Could Bring Collapse Of Coal Miners’ Pensions Monday, Nov 4 2019 

The recent bankruptcy of Ohio Valley coal giant Murray Energy has renewed fears about the already shaky financial foundations of the pension plan that tens of thousands of miners and their families depend upon.

The seismic collapse of yet another coal employer has lawmakers from the region renewing their push to fix the United Mine Workers pension fund, and has even raised broader concerns about pensions for a range of other trades.

Murray Energy has a substantial footprint across the region. It is also the last major employer contributing to the UMWA pension plan. In its bankruptcy filing, the company reports $2.7 billion in debt and more than $8 billion in obligations under various pension and benefit plans. More information will likely come out as the bankruptcy court takes up the matter.

IMG_0129 2Sydney Boles | Ohio Valley ReSource

Bob Murray speaking at an event in October, 2019.

Bankruptcy proceedings often take months, and it’s not yet clear if the company will be relieved of its pension obligations. UMWA spokesperson Phil Smith said if recent history is any guide, that is a likely outcome.

“We don’t think any company should be able to be relieved of its responsibility to any retirees, whether they’re in the coal industry or not,” Smith said. “But it has happened in the coal industry time after time after time.”

Smith said if the bankruptcy court relieves Murray’s pension obligations, that could be another $6 billion loss for the UMWA retirement fund.

The UMWA health and retirement fund covers the benefits of retirees whose employers went out of business before 2007. The plan was already facing insolvency by 2022, largely due to the industry’s decline in production and a wave of bankruptcies. Smith said now that Murray Energy has filed for Chapter 11 protection, the fund could become insolvent by next year.

UMWA President Cecil Roberts said much of the problem lies in how bankruptcy courts treat workers’ concerns.

“Why should workers stand in line last? Why should it be beneficial to a CEO or CFO to file bankruptcy?” he said. “They ran the company into the ground, they get rich, the workers lose their health care. Sometimes they lose their job. Sometimes they lose their pensions. That needs to be dealt with.”

Murray Energy is among nearly a dozen coal companies to go bankrupt during the Trump administration, despite the repeated claims of a “coal comeback.” Some lawmakers worry that the combined impact could cause a domino effect for other multi-employer pensions across the country.

Virgil2Becca Schimmel | Ohio Valley ReSource

Retired Kentucky miner Virgil Stanley at a UMWA rally for pension protections.

‘Economic contagion’

Insolvent plans fall to the Pension Benefit Guaranty Corporation, or PBGC, which is a federal backstop for pension plans. Lawmakers from around the Ohio Valley warn that the fund is also already at risk, and it would be in far more financial trouble if it became responsible for the UMWA plan.

Last year a bipartisan group of lawmakers served on the Joint Select Committee on Solvency of Multi-employer Pensions. The group was tasked with finding a solution to pension problems affecting a range of workers including teamsters, coal miners, iron workers, and bakers and confectioners.

Sen. Rob Portman, an Ohio Republican on the joint committee, warned at a field hearing last year that if even one of the larger plans becomes insolvent that could put the PBGC at risk as well.

“That wave of bankruptcy has the potential to create an economic contagion effect,” Portman said. “In other words, it would spread around our economy.”

IMG_1076Aaron Payne | Ohio Valley ReSource

A union miner at the rally for pension protection.

But despite the shared concern, the committee missed a self-imposed deadline to come up with a solution and disbanded at the end of the year.

The UMWA’s Smith said more than $1 billion goes into local economies every year from health care benefits and pensions that are paid directly to retirees. More than $130 million flows into Kentucky alone.

Simon Haeder is an assistant professor of public policy at Penn State University. He said shoring up the UMWA pension plan would have been a lot less expensive and more manageable if Congress had started to address the “inevitable” issue much earlier.

“Coal miners are one of those probably worst-case scenarios here,” he said, “because the balance between people paying into the system and people taking out of the system is so out of whack.”

Haeder said the miners’ pension problems also raise questions about whether people can rely on these pension systems in the future. He said the decline in union membership and the complex actions of bankruptcy courts have given employers an edge over the interests of workers when a business goes under.

“Bankruptcy law and bankruptcy court will certainly side with employers much more than they will side with employees,” he said.

A Legislative Fix?

Sen. Joe Manchin and other coal-area lawmakers introduced the American Miners Act to try to shore up the shaky UMWA pension. The West Virginia Democrat’s bill would transfer some money from interest accrued on the federal Abandoned Mine Land fund – which is used to clean up old mining sites – into the mine workers’ pension plan. It would not take money directly from the fund.

Manchin is attaching the American Miners Act to a spending bill that keeps the federal government running. He said most of the pension checks are for $600 a month or less and many of those are going to widows who depend on that money for basic living expenses.

“When coal companies go bankrupt coal miners benefits are at the bottom of the priority list,” Manchin said.

The bill would also restore a tax on coal used to fund the federal Black Lung Disability Trust Fund, which Congress had allowed to be reduced by half last year. Pennsylvania Democratic Sen. Bob Casey is a co-sponsor on the bill.

“I won’t stop fighting until we’ve secured the promised pensions and an extension of the Black Lung Disability Trust Fund for coal miners and their families,” Casey said. “I hope Congressional Republicans will join our mission.”

The Senate bill does not yet have a Republican co-sponsor but there is general bipartisan support for action on the miners’ pensions. In the House two pending bills propose a similar funding method to shore up the UMWA fund. Republican Rep. David McKinley of West Virginia is the lead sponsor on one of those.

Democratic Rep. Bobby Scott of Virginia proposes a version that also addresses the health care benefits of retirees whose companies went bankrupt last year and have been or will be relieved of those obligations by a bankruptcy court. Both bills have passed out of committee.

But of course one Republican’s voice will matter most, and that is Senate Majority Leader Mitch McConnell of Kentucky.

McConnell’s Call

McConnell had previously postponed action on miners’ pensions by splitting an earlier proposal to address both retirement funds and health benefits. McConnell introduced his own version in 2017, which provided for miners’ health benefits but avoided dealing with pensions.

In an emailed statement, McConnell said he’s concerned about the insolvency issues facing a number of multi-employer pension plans, and that he supports finding a bipartisan solution for pension reform.

It’s not clear when or if the majority leader will take up the issue of coal miners’ pensions or healthcare benefits.

manchin mcconnellU.S. Senate

Sen. Joe Manchin (D-WV) and Majority Leader Sen. Mitch McConnell (R-KY).

The Miners Act and other similar bills have attracted criticism from fiscal conservatives such as the Heritage Foundation. Heritage calls the proposal a “bail out” that would do nothing to “fix the root of the problem” with the large pension plans.

Manchin said he will attach the American Miners Act to every vehicle possible in Congress in the hope that McConnell will agree to take action.

“And Senator McConnell I know he’s concerned about other pensions, we’re all concerned about other pensions, but this is on the front burner now,” Manchin said, adding that if the miners’ pension plan falls it will likely not fall alone. “When this happens, everything else will tumble and snowball with it.”

ReSource reporter Brittany Patterson contributed to this story.

Blackjewel Miners Get More Of Their Pay As Labor Dept. Acts Against Bankrupt Company Thursday, Oct 24 2019 

Coal miners who went without pay when mining company Blackjewel declared bankruptcy this June are one step closer to receiving lost wages. The checks come weeks after some of the miners ended a long-running protest, and months after the federal Department of Labor first intervened to allege the company violated labor laws in the month before it folded.

Rumors of a deal circulated early this month, and in consent orders filed in U.S. district courts in Kentucky and Virginia, Blackjewel committed to pay more than $5 million to miners. 

The bankruptcy drew widespread attention this summer when a group of Blackjewel miners blocked a train full of coal to protest unpaid wages. The protest lasted 59 days and ended after the last remaining miners found work or had to return to other obligations 

According to a press release from Kentucky Gov. Matt Bevin, more than 600 coal miners from Kentucky’s Black Mountain and Lone Mountain mines will receive pay following agreements between the coal company and the Department of Labor.

“This means a whole lot.” said Stacy Rowe, wife of former Blackjewel miner Chris Rowe. “Getting this check, it’s going to pay off some of the bills we owe, and it’s going to get us started when we start driving.” 

Chris Rowe has taken a job as a truck driver since the bankruptcy. Blackjewel owes Chris about $6,000, Stacy said. 

“Today is a great day and one we’ve longed to see come,” said Harlan County Judge Executive Dan Mosley in the release. “My heart is overjoyed for these hardworking folks who took a stand in a professional way to say workers shouldn’t be treated this way.”

“Although we’re certainly relieved that these miners are finally getting paid, it took three and a half months, and that’s far too long,” said Ned Pillersdorf, an attorney who is representing Blackjewel miners in ongoing litigation. 

Pillersdorf says the miners will continue to pursue additional claims against Blackjewel as well as its former CEO. The Kentucky Labor Cabinet said it will continue to pursue litigation against the company for failure to pay a performance bond. 

It is unclear whether the checks scheduled to be delivered to Blackjewel miners will include compensation for lost health care benefits, child support payments, or paid time off.

Report: As Population Ages, Elderly Renters Face High Costs And Instability Wednesday, Oct 16 2019 

When someone spends a significant portion of their income on housing, it can mean making difficult choices about what else they can afford in life. They might choose to go without medication or eat peanut butter sandwiches every day to make rent.

As America’s population continues to age, the number of households led by someone 65 or older is growing rapidly. And among those households, there are more than ever who are defined as “cost-burdened,” meaning they pay more than 30 percent of their income for housing, according to a report released Wednesday from Harvard University.

Tasha Downs, a program coordinator with the affordable energy program All Seasons Assurance Plan (ASAP) in Louisville, said she’s seen the seniors her nonprofits serve make these kinds of difficult decisions.

“A lot of them are stressed out and ready to give up,” she said. “It’s kind of a hard decision to take and kind of say, which one do I want to pay?”

Downs said these decisions can lead to worse health outcomes and further exacerbate existing problems. Her organization has more than 2,500 clients, most of whom are seniors and renters.

According to the Harvard report, older renters are more likely to be burdened by housing costs than those who own their homes. The report analyzed Census data, and showed that trend to be true in major Kentucky cities.

In Louisville, which is facing a massive affordable housing shortage, more than half of renters 65 and older were cost-burdened, compared to about one-fifth of homeowners in that age group. The rates for renters of that age in Elizabethtown/Ft. Knox and Lexington were about 52 and 46 percent, respectively. But only about 14 percent and 18 percent of homeowners in those cities were cost-burdened.

Just like other states, many of Kentucky’s older adults pay more than a third of their incomes on housing. But some groups in the state fare a little better than others, including renters in the 65 to 79 age group and homeowners older than 80.

Authors of the report also wrote that issues such as income inequality and racial discrepancies in homeownership have also grown in recent years. For example, whites over 65 were about 19 percent more likely than African-Americans in that age group to own their homes, a 30-year high.

“These inequalities are important because homeownership provides older households greater housing security and more predictable housing costs than renting,” the report’s authors wrote.

Downs, of ASAP, said assistance programs like hers or the Low Income Home Energy Assistance Program can help seniors with low or fixed incomes make their bills. And nearby family or friends can help, especially because some older adults have trouble getting around and aren’t comfortable taking care of things online or over the phone.

“Those family members can help them fill out the paperwork they need to get extra assistance, they can take them to appointments,” she said.

She said organizations and government need to find new ways to reach older adults in need of assistance.

According to the Harvard report, the number of low-income households in America headed by older adults is expected to grow by millions in the coming decades. It said there were more than three million such households in 2007, but projected the number could approach eight million by 2038.

Grassroots Growing: Hemp Farmers Form Cooperatives Amid Growth And Uncertainty Monday, Oct 14 2019 

Shawn and Tony Hemp Harvest

Tony Silvernail swings a heavy machete at a stalk of bushy hemp and chops the plant near the root, grabbing the five-foot-tall shoot with his sun-weathered hand. 

It’s an unusually hot October day on his farm, Beyond The Bridge LLC, tucked in the hills outside of Frankfort, Kentucky. But the heat doesn’t faze Silvernail, sporting a sweat-soaked shirt, a huge smile, and a fat cigar between his teeth.

Silvernail and hundreds of others of farmers across the Ohio Valley are finally getting to harvest thousands of acres of hemp, the first harvest since the federal government legalized hemp cultivation last December.

“Oh, I’m happy as hell,” he said with a laugh. “We’re all like little kids, Shawn and I, getting all excited when we’re sitting here harvesting and talking. This is actually the glory part of being a farmer, as anybody whose livelihood depends on this. When you’re harvesting, it’s a happy time.”

Liam Niemeyer | Ohio Valley ReSource

Tony Silvernail picks up a stalk of hemp he chopped during the harvest.

He’s been an organic farmer for decades in Kentucky, and it wasn’t until last fall when he and his business partner, Kentucky State University professor Shawn Lucas, decided to try their luck at growing organic hemp for cannabidiol, or CBD. Silvernail said when he first became an organic farmer in the ’90s, he appreciated the advice experienced farmers shared with newcomers in the industry. But he said that hasn’t been the case with hemp. 

“I’ve really adopted that sense of helping, and you didn’t really get that with the hemp industry. The hemp industry is still very closed,” he said. “So, I got in a bad mood and sitting there eating lunch with Shawn downtown, and I really came into a moment of ‘you know, we just got to do our own thing.’” 

They co-founded an organic hemp cooperative for smaller hemp farmers. The cooperative purchases hemp seed and other supplies in bulk to get a better deal. It sells the members’ collective hemp harvest to processors, using the strength in numbers to bargain for better prices. And the cooperative helps farmers figure out how to even grow the crop in the first place.

Their cooperative is starting out small – 15 farmers in central Kentucky growing about 30 acres – and has already seen some challenges. They unknowingly purchased faulty seed and have had thieves stealing the crop right out of the fields. But Silvernail said it’s all part of the learning process.

Liam Niemeyer | Ohio Valley ReSource

Tony Silvernail (left) and Shawn Lucas (right) inside their high tunnel where hemp is drying.

“Ask us in November where our sales were at, how we all did,” Silvernail said. “We can cry on each others’ shoulders over a beer when we realized how badly we may have screwed up or what we didn’t do, but hopefully next year will be better.”

Cooperatives aren’t a new idea in farming. But they’re new in the hemp industry, and many Ohio Valley hemp growers are choosing to join cooperatives to share supplies and give small growers a better shot in an increasingly competitive marketplace. Regional agriculture leaders are championing hemp’s potential for farms of all sizes. But these hemp farmers worry that the sort of corporate consolidation they’ve seen in other agriculture sectors will soon come to the new hemp industry.

Consolidation Concerns

Hemp farmer J. Morgan Leach has already seen attempts by larger corporations to corner the hemp and CBD market. 

Leach, founder of the West Virginia Farmers Cooperative, said he testified in 2017 against initial versions of a state bill, that he said would have prevented the sale of CBD products in the state unless the product was approved by the Food and Drug Administration. 

That portion of the bill was supported by lobbyists from the British company GW Pharmaceuticals, the proprietor of Epidiolex, used to treat epilepsy-caused seizures. It is currently the only CBD-derived drug approved by the FDA. Other CBD advocates that year in other states also worried about similar state legislation being pushed by the company. 

Leach said initial versions of bill could have closed off a lucrative market for West Virginia hemp farmers.

“So that was one of the, I think, apparent instances where you get kind of these bigger companies that come in and try to monopolize the market,” Leach said. “We were able to overcome that and preserve this market opportunity.”

Leach doesn’t want the new hemp business to follow the route some other agricultural sectors have, such as the poultry industry.  

Large poultry companies often have extensive control over a farmer’s production and pricing. That has led to a massive class-action lawsuit alleging that large firms use data to keep prices for poultry high while payment for farmers remains low.

Leach sees that as a cautionary tale about the effect larger corporations can have.

“The company owns those birds from the time they hatch to the time they purchase them, and then the farmer is stuck with the bill for raising those and the chicken house to do it. I think that’s a poor example,” Leach said. “Some are making money, but they’re totally hamstrung to the price that the company gives them, because it’s just how it goes in that industry. [Hemp] is a new frontier.”

Liam Niemeyer | Ohio Valley ReSource

Hemp sprouts from the ground at a farm near Frankfort, Kentucky.

Leach founded his co-op in 2015 in part because he doesn’t want a similar situation to happen with hemp.

“That’s our goal, is to be able to keep the five-acre farmer in business even when the bigger companies move into this space,” Leach said. “A co-op is a one member, one vote organization, so all of my members hold shares of stock. That stock is restricted only to farming members. So, farmers are the entirety of the makeup of our organization.” 

Leach said it’s ultimately up to the individual farmer whether they want to grow in a co-op, grow independently, or grow under contract for one of many hemp processing companies entering the business.

“I think it’s just kind of a difference in philosophy,” Leach said. “I’d just rather be part of a farming co-op where I have a voice and I have a vote.”

But Leach said he’s worried about the potential for future large-scale hemp production that could push smaller hemp growers out. By banding together, small farmers can compete with larger-scale production.

Booming Growth

Jeffery Young is an agriculture economist with Murray State University’s Center for Agricultural Hemp in west Kentucky. He agrees the potential is there for future hemp consolidation.

“I don’t want to say ‘join or die,’ but it would definitely be in a smaller operator’s best interest to join in on that,” Young said. “They wouldn’t have the acreage, or the volume or the clout that a larger operator would have.” 

Young said the new industry is still years away from reaching a level of large-scale production that would pressure smaller hemp farmers. But the nascent industry is booming, and the amount of hemp grown in the Ohio Valley continues to skyrocket.

Alexandra Kanik | Ohio Valley ReSource

The number of hemp acres planted in Kentucky this year, compared to last year, nearly quadrupled to about 26,500 acres. West Virginia saw a similar jump with 641 acres planted, according to state agriculture officials. With zooming demand for hemp to turn into products like CBD, prices for the crop are far from set in stone.

“It depends on things like geography, what kind of processors are there nearby, how many are nearby, what variety is being grown, what quality of product is being produced,” Young said. “The market is still trying to get its sea legs, if you will. There’s a great deal more risk with hemp…and so through sharing of risk, that would would be a key benefit from forming a cooperative.”

Much of the risk comes from the learning curve many new growers face. Pesticides are still being tested to control weeds and insects, federal crop insurance for hemp won’t be available until next year, and in some cases, THC levels in hemp can spike above the federal limit that classifies the crop as hemp. THC is the psychoactive compound in marijuana, and is also present in trace amounts in hemp. Hemp with THC levels above 0.3 percent is reclassified as the crop’s illegal cannabis cousin, and has to be thrown out.

While cooperatives can shelter hemp farmers from some risk, the set-ups can bring on new perils for farmers as well. Aleta Botts, Executive Director of the Kentucky Center for Agriculture and Rural Development, works with cooperatives of all kinds to help them become sustainable. 

She said because most hemp farmers are still learning how to consistently grow the crop, there’s a chance that a co-op might promise a hemp processor to grow a certain amount of hemp and fall short because of crop failures.

“We’re going to get to harvest and not have those pounds to market. So we’ve built our financials on a level that we’re not gonna be able to achieve,” said Botts. 

Unlike in the rest of the Ohio Valley, Ohio farmers aren’t harvesting hemp this fall because the state only legalized growing hemp in July. But that hasn’t stopped widespread interest in growing hemp, something that was apparent at a recent summit for potential hemp farmers in southern Ohio.

Liam Niemeyer | Ohio Valley ReSource

Tony Silvernail with a handful of crumbled hemp, on his farm near Frankfort, Kentucky.

“I printed off, I think, 480 some lunch tickets, and they were all gone. So the interest is huge,” said Julie Doran, who founded the Ohio Hemp Farmers Cooperative in December. 

She was also one of the few critics who panned parts of the state legislation legalizing hemp cultivation in Ohio. She feared that the bill’s language setting “financial responsibility” standards could limit in-state participation in the state’s hemp program and instead favor out-of-state companies with more experience and access to capital.

Doran said she believes there’s a place for smaller farmers alongside larger investors, but she also cautions that farmers need to learn how to grow the new crop reliably before working with bigger companies that might want to grow larger acreages more quickly.

“It’s not like any other crop that they farmed,” Doran said. “Yes, corporate is going to come in and we are going to need them for an outlet to sell all this stuff, too. But we need to learn ourselves first. And, you know, get our feet wet before we jump in.”

Rethinking Retraining: Why Worker Training Programs Alone Won’t Save Coal Country Monday, Oct 7 2019 

Bobby Bowman mined coal in West Virginia for 12 years before his employer shut down. 

“I don’t think that mine will ever open again,” he said. 

Bowman lives in Welch, in the south of the state, where he worked at the Pinnacle Mine, which shut down almost exactly one year ago, putting him and about 400 others out of work. After waiting a month in hopes someone would buy Pinnacle and the mine would reopen, Bowman decided to do a four-week training program offered by the United Mine Workers Career Center. He enjoyed it and earned a certification in heavy equipment operation. But when he came back home, he struggled to find a job in the field. So Bowman took matters into his own hands. 

“So I sent myself through truck driving school and that’s what I’m doing today,” he said. 

Bowman is not alone. In the midst of the region’s declining industries, politicians are betting big on job training, with millions directed at those who lost jobs in coal mining and power plants. 

Benedum_-1Rebecca Kiger | Ohio Valley ReSource

Participants in a West Virginia worker training program offered by Coalfield Development Corporation.

The U.S. Department of Labor recently announced nearly $5 million for worker training programs in Appalachia. It’s the latest influx of funding aimed at blunting the job losses in the region’s coal sector. 

Recently Sen. Mitch McConnell of Kentucky announced more than $2 million in funding from the National Dislocated Workers fund, and Sen. Joe Manchin of West Virginia announced more than $1 million in funding from the same program. 

But critics say worker training alone is no solution and that such retraining programs have a poor record in actually connecting dislocated workers with local employment that pays a comparative wage.

“There are great examples of ones here in Appalachia who have trained people for jobs then they couldn’t find employment,” Ted Boettner said. The executive director of the left-leaning West Virginia Center on Budget and Policy, Boettner said job training hasn’t made up for the number of jobs lost by the coal industry. He and other economists argue that a more broad-based approach to jobs, public investment, and wages will be necessary for coal country. 

Wage Gap

“You have to realize a lot of this is in the backdrop of 40 years of wage stagnation across this country and especially men in West Virginia,” Boettner said.

He said job training needs to be connected to employment that pays well because it’s difficult to go from a $75,000 a year coal mining job to one that pays $12 or $15 an hour. Boettner points to areas of opportunity, such as Appalachia’s needs for mine reclamation work which could also provide jobs for coal miners similar to the work they’ve already done. 

“We have $4 to $5 billion in mine site reclamation that needs to happen,” he said. “That’s enough jobs, that’s thousands of jobs, and billions of dollars of investment right there.”

Courtesy CVI

Stream restoration work in progress on an old mining site in West Virginia.

Josh Benton is deputy secretary of the Education and Workforce Development Cabinet in Kentucky, where miners have been hurt by recent coal bankruptcies. Benton said the state has had some success retraining people to work in the healthcare industry. But the real challenge is finding jobs where that displaced worker lives. 

“The challenge that we face is not necessarily are the training programs effective? It is, are there other industries, for those displaced workers to go to work,” he said.  

Benton said the jobs that have been created in technology or healthcare don’t make up for the ones lost in the energy sector over the last 10 years. Wages are another concern. He said it’s a tight labor market and he tries to communicate that to employers who are looking for skilled workers, but offering low wages. 

“If a manufacturer, for example, is paying an entry-level wage of $11.50 an hour, you know, if we’re aware of that, we can say that the average entry-level wage for manufacturing across the state is really $14 an hour,” he said. “So, it’s not surprising that you’re struggling to find someone because you’re paying below market value.” 

idle-mines-coal-employment-cenppp-v3Alexandra Kanik | Ohio Valley ReSource

Political Appeal

Gordon Lafer is a professor at the University of Oregon, a research associate at the Economic Policy Institute, and author of “The Job Training Charade.” Lafer argues that job training pushes a false narrative that employers aren’t hiring people because they can’t find workers with the right skills. 

“I think that job training keeps being promoted because it solves a political problem both for elected officials and for employers, but it doesn’t do anything for the economics,” he said.   

Lafer said the most important thing to understand about job training programs is that they don’t create new jobs. However, he argues, those programs do create a convenient narrative for politicians on both sides of the aisle.

“Job training is one of the favorite things of both Democrats and Republicans because it’s cheap, it’s symbolic,” he said. “It kind of places the blame on workers instead of employers because it suggests only if you had the right skills or the right work ethic or something then you wouldn’t be in the trouble you’re in.”

Lafer said the employment picture in the Ohio Valley is especially important because of its connection to climate change. He said talk of a “Green New Deal” and a move away from polluting industries should include a just transition for those who would lose jobs.

“It’s just not in good faith to say, one group of people is going to pay the price for saving the planet,” he said. “Either we have to say, we’re going to take care of people from age, whatever they are when they lose their jobs to when they would retire. Or there have to be other jobs that are real jobs.”

Lafer said he’s heard this public policy touted as a solution for years, but it isn’t creating employment opportunities as advertised. 

“You could take on every argument, bring all the statistics and show why it doesn’t make sense. As a policy, job training feels like the undead to me,” he said. “Like you can drive a stake through its heart and it keeps coming back up.” 

Different Approach

Lafer said a better approach is to train people and invest in the industries that can’t move to a different country with cheaper labor once they get to a scale where they need more employees. Some of those industries include healthcare, construction, education, and tourism. 

Economist Ted Boettner said public investments in infrastructure, including expanded broadband, could help create a stable economy that works for everyone. 

“Have we upgraded our antiquated grid? That’s thousands and thousands of jobs in West Virginia if we just upgrade the grid,” he said. 

As automation continues to grow, and the coal industry declines, more people will be displaced. The challenge is training those workers for jobs that pay well and aren’t likely to be outsourced or automated. 

 

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