A county in Pennsylvania has gone from a time of crisis to a period of prosperity thanks to natural gas; now it’s almost broken. | Spotlight Pa
WAYNESBURG – Greene County goes bankrupt.
Although she has received millions of dollars in payments from the natural gas industry to compensate counties like Greene that host natural gas wells, she is struggling to balance her budget of over $ 40 million. This year, in the midst of the pandemic, commissioners increased property taxes for the first time since 2010.
Without major changes, projections from the county budget office show Greene may not have the income or reserves to cover his costs by 2023.
It’s a financial situation that seemed almost guaranteed as the coal mining industry here has all but disappeared, emptying the backbone of the local economy. That was until the natural gas boom – and a massive influx of money that came with it – offered a different path.
The windfall seemed to give Greene County time to figure out how it would survive without coal.
But nearly 10 years and over 1,000 natural gas wells later, the county does not appear to be better off financially than where it started, having spent $ 37.2 million on impact fees without setting aside. money to plan for the day when construction would inevitably slow down.
“I quickly realized that there was no budget planning,” said Mike Belding, one of the two new county commissioners in the three-seat governing body. “They were just spending the money as he got home.”
Greene, home to 36,000 residents, is one of 31 counties in the state receiving “impact fee” payments under a state program launched in 2012 called Act 13. The funds are distributed annually and payments are based on factors such as the number of wells in an area and population.
According to reports filed with the Pennsylvania Public Utility Commission, only three other counties – Bradford, Susquehanna and Washington – received more money than Greene through the program’s lifetime impact fee.
But unlike others who have put money aside and saved it for future investments, budget reports show Greene has used around $ 17.5 million to balance his budget since 2015. The other half went to projects that the last commissioners deem short-sighted and unnecessary, like ordering a $ 400,000 global plan that was never used and a $ 550,000 business loan program that was never used. gave no return for the county.
Belding and the other new county commissioner, Betsy McClure, both Republicans, have vowed to stop using impact fees to balance the budget every year. So far, they have set aside around $ 4.5 million to use for future projects such as repaving roads, developing recreation areas and expanding broadband internet.
It hasn’t been easy, Belding said. Not relying on impact fees meant finding other ways to fill a $ 5 million hole in the 2021 budget.
“We tried every other opportunity we could, cutting all of that expense,” Belding said. “We just couldn’t do it. So we made the difficult decision to raise taxes.
Bust, boom, bust
The decline of the coal industry is inevitable here. Just outside Waynesburg, the center of county government, the Emerald Mine appears to be inactive. It is one of nine that were in operation in 2011, according to records from the state’s Department of Environmental Protection.
But in 2015, Emerald Mine shut down for 38 years, citing depleted reserves, a slowing market and a tough regulatory environment. About 300 people have lost their jobs, and the mine’s green towers and endless rails are a constant reminder.
In 2019, the number of active mine sites increased from nine to four, and the county’s population declined by about 2,500.
“We are catching up to decades ago,” said Commissioner Blair Zimmerman, a Democrat who has served on the board since 2012 and has worked on the surface of the Cumberland mine for more than 40 years. He was previously mayor of Waynesburg.
He and the other two commissioners said the county should have started planning for the transition from reliance on coal a long time ago, and now it is paying the price for this inaction.
In 2012, Republican Governor Tom Corbett enacted Law 13, revising state regulations on the gas and oil industry.
In the first year of the program, Greene County was compensated $ 3 million. At the same time, temporary workers hired by gas companies to build hundreds of new wells have driven up demand for rental properties, Belding said. Properties rented for between $ 500 and $ 600 per month sold for over $ 1,200, and new hotels were built to accommodate the workforce.
Local businesses and restaurants were given a boost, and about 10 years ago a Walmart joined the ranks of fast food restaurants and gas station chains just off the highway.
The county was home to 1,257 natural gas wells and was collecting an average of $ 4.1 million in impact fee payments per year as of 2019, the most recent year for which data is available.
“It’s a godsend,” Belding said. “It’s like winning the lottery a bit. Get a rush of money from something unexpected.
However, as the gas industry began to slow down, so did the number of out-of-town workers spending on hotels and the local economy. Energy companies are drilling fewer new natural gas wells, so payments under Bill 13 are also expected to decline.
The county also expects at least two more mining operations to end within the next two years.
Other rural Pennsylvania counties face similar challenges, said Lisa Schaefer, executive director of the County Commissioners Association of Pennsylvania, which supports county governments statewide.
Many have small commercial tax bases, but large areas of protected state land such as playgrounds, parks and forests, which are not taxed. The shrinking population means there are fewer people left to share the burden of property taxes. Those who stay tend to be older residents who are already out of the workforce.
About 18% of Greene County’s 36,000 residents are over 65 and 19% are under 18, according to census data.
Counties need to earn money to be able to provide services such as mental health supports, drug and alcohol programs, and child and youth services – programs that have been cut by dozens. millions of dollars at state and federal levels in recent years.
“So if support for these levels continues to decline as well, it is increasingly difficult for counties to make up the difference, especially when they only have property taxes to turn to,” said Schaefer.
Counties have broad discretion over how they spend impact fees, but they are required to report details to the Pennsylvania Public Utility Commission, and these reports are public online.
Records show Greene allocated millions to categories such as building public infrastructure, social services and public safety, but they don’t show exactly how this was broadcast. And in the past nine years, none have been devoted to planning initiatives, tax cuts, water conservation, or professional and technical centers.
In contrast, Bradford County said it deposited about $ 23.8 million of its Bill 13 payments into its capital reserve fund. Washington, Greene’s most populous neighbor to the north, has set aside $ 37.1 million in reserves, records show. But Greene County has only set aside about $ 1.2 million for the capital reserve.
“For years before, it was difficult to have county leaders who just claim that coal is going to continue to grow at the same rate as before,” said Veronica Coptis, a native of Greene County and executive director of the Center for Coalfield Justice, a Washington County-based nonprofit that advocates for communities where fossil fuel mining takes place.
She has been working on issues related to the region’s economic development for seven years.
“It is definitely a turning point to see elected officials recognize the reality of our economic crisis,” said Coptis.
Residents often tell him that their communities need investments in basic infrastructure. This includes tackling issues such as burning or repaving roads and sidewalks, she said.
“They need to be able to trust their water,” she added. “Their schools must be good.
Bob Morris, 58, opened Burgers and More – a walk-in sandwich shop serving beef from his own farm – on State Route 21 in Waynesburg about a year and a half ago.
He expected most of his customers to be truckers carrying fuel and equipment for local drilling operations. Instead, the majority are local residents looking for alternatives to fast food chains – the only businesses that seem to be able to survive, Morris said.
His niece, Kelli Bosworth, helps run the kitchen. Even on a cold Friday at the end of winter, there’s a constant rush for lunch, and Bosworth juggles between answering the phone and taking drop-in orders.
As a 34-year-old mother of four, Bosworth said she would like to see more opportunities for her children – safe places like parks or pools where they can play, internet access and education .
About 20% of the county’s households had access to the internet in 2018, according to census data. As of last spring, about 40% of the county’s 4,652 elementary and high school students did not have access to online classes when schools closed at the start of the pandemic, according to county estimates.
It’s an improvement that longtime Greene owner Johnny Humble says is essential if the county is to attract – and retain – new businesses and residents. Of the 13 new businesses that held groundbreaking ceremonies with the county in 2019, 12 replaced previously full storefronts, Belding said.
Humble has run his business for 47 years, first with his father, then alone as a Humble Carpet and Decorating Center for 25 years. He still installs parquet with his son every day.
Although many of his clients are local, having a website and a social media presence was essential to helping his business survive and grow, even before the coronavirus pandemic hit and he was forced to limit in-person meetings with potential clients, Humble said.
“For God’s sake, we are living in 2021,” Humble said. “It’s pitiful.”
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