Federal funding to hundreds of rural communities in the Appalachian region could be cut this year. That’s because the Appalachian Regional Commission no longer classifies the local economy as distressed. 32 counties in the Appalachian region including Morgan county will be upgraded from distressed status to transitional in the 2004 fiscal year, which begins October first. An A-R-C spokesman says officials in the affected counties should be encouraged by the agency’s decision because it means their economies have improved. The A-R-C says only two of the 292 counties located in the 13 state region will be downgraded from transitional to distressed status.