Drilling Boom’s Strain on County Resources Leads to Calls for Impact Fee

Part Two of Two. (Yes­ter­day, we told you how the num­ber of 911 calls has gone up in seven of eight drilling-heavy coun­ties. Today, a look at how offi­cials are wor­ried they’ll need to hike prop­erty taxes to keep up with increased demands.)

911 calls climbed by dou­ble dig­its in nearly all of the coun­ties in Penn­syl­va­nia where gas drilling is the heav­i­est, a likely sign of the nat­ural gas boom’s strain on pub­lic resources. But just as coun­ties feel the pinch, the work­ers who respond to emer­gen­cies are leav­ing for higher-paying jobs with the drillers.

• Emer­gency Ser­vices Stretched In PA’s Top Drilling Coun­tiesStateIm­pact Pennsylvania’s Scott Detrow reportsDown­load

In Tioga County, inci­dents jumped 15 per­cent between 2009 and 2010, and are on pace for another 15 per­cent spike this year. County work­ers say they need to hire more dis­patch­ers, and that requires more tax dol­lars. In Tioga County, it costs an esti­mated $15,000 to train a new employee. And teach­ing takes time. “It takes us six to nine months, on aver­age, to train some­one,” said Lisa Rice, who runs the county’s call cen­ter. “If that per­son doesn’t stay after six months, [we start] all over again with a $15,000 deficit.”

Ensur­ing new hires stay longer would likely mean increas­ing the posi­tions’ salary. Again, more dol­lars the coun­ties say they don’t have.

There are larger costs, too. “Not only am I look­ing at the need for more staff,” said Rice, “If we hire enough [new employ­ees], I’m not going to be able to fit them into the room we’re using. That’s going to mean remod­el­ing, or mov­ing to a dif­fer­ent part of the build­ing.” Each dis­patcher sits at a con­sole with ten com­puter screens and mul­ti­ple phone lines.

County Com­mis­sioner Mark Hamil­ton, a Repub­li­can, is wor­ried he won’t be able to fund the needed expan­sion with­out a tax increase. The county already hiked its prop­erty taxes by one mil — an extra $100 for a $100,000 house —  last year. “Hope­fully we’re going to be OK this year,” he said, “but…if we have to put another posi­tion in, to the tune of what­ever, $100,000, $200,000, and have to hire 3 or 4 more dis­patch­ers – it’s obvi­ous the gas indus­try has caused that, so why should they not pay their fair share?”

Hamil­ton, who serves as the pres­i­dent of the County Com­mis­sion­ers Asso­ci­a­tion of Penn­syl­va­nia, sup­ports an impact fee on gas drillers to help off­set the cost of more resources. Cur­rently, a dozen dif­fer­ent tax or fee pro­pos­als are before the Gen­eral Assem­bly. The most high-profile mea­sure, intro­duced by Sen­ate Pres­i­dent Pro Tem Joe Scar­nati and amended by the Sen­ate Envi­ron­men­tal Resources and Energy Com­mit­tee, would charge a $40,000 per-well-levy on drillers, and dis­trib­ute money to coun­ties and munic­i­pal­i­ties that host drillers, as well as statewide envi­ron­men­tal cleanup efforts.

Impact on Resources Reaches Wide

Scott Detrow / StateImpactPA

Denny Col­grove (left) and Mark Hamil­ton (right) in the Tioga County Courthouse

When asked how much of his time is taken up by drilling-related issues, Tioga County Emer­gency Ser­vices Coor­di­na­tor Denny Col­grove laughed. “My first impulse would be 50 per­cent,” he said. Col­grove said it goes beyond 911 calls. Coun­ties need to develop emer­gency plans for acci­dents at well pads and pipelines. They need to track haz­ardous mate­ri­als. “In 2009 we were deal­ing with 23 facil­i­ties with haz­ardous mate­ri­als required to report,” he explained. “As of right now, with the gas wells, we have 376 loca­tions with haz­ardous chem­i­cals we’ve iden­ti­fied. That’s 3,000 dif­fer­ent chem­i­cals we’re deal­ing with.”

Hamil­ton esti­mated he spends about half his time on drilling, too. “I’ve never in my life spent so much time on an issue I could do so lit­tle about,” he said.

“It’s not fair for us as county com­mis­sion­ers to raise our taxes to take care of these impacts to our local folks,” said Hamil­ton, “when our local folks haven’t been the ones that are respon­si­ble for the increased fees.”

“Bureau­crats … Exag­ger­ate Their Problems”

Most com­mis­sion­ers in drilling-heavy coun­ties agree with Hamil­ton, but not every­one wants a tax or fee. “Bureau­crats love to exag­ger­ate their prob­lems,” said Brad­ford County Com­mis­sioner Doug McLinko, a

Scott Detrow / StateImpactPA

Brad­ford County Com­mis­sioner Doug McLinko in his truck

Repub­li­can, as he drove from drilling site to drilling site in his white pickup truck.

McLinko’s wor­ried a levy would drive drillers out of the state, and kill Bradford’s increas­ingly drilling-centered econ­omy. He said law­mak­ers sup­port­ing a fee “need to get a grip,” and real­ize how much money energy com­pa­nies are pump­ing into the local econ­omy.  As we drove along one of the county’s con­gested roads, we passed about two dozen heavy trucks within the span of five min­utes. McK­linko didn’t see them as a nui­sance, but instead as cash cows.

“Two dozen trucks at five miles to the gal­lon, burn­ing the high­est liq­uid fuels for diesel – over the road diesel – in the coun­try,” he said. “Put that in the cof­fers. Every time – you got to look at things – in the big hys­te­ria to tax it, look at the taxes in place, look at the jobs, the guys hold­ing onto steer­ing wheels.”

McLinko pointed out the well-documented fact drilling has led to a hotel boom. “One [Brad­ford County] hotel is rented out for three years,” he said. “[The own­ers] had to put up a mod­u­lar hotel. All these build­ings are cre­at­ing a local tax base.”

Well, kind of.

All that money is going into the local econ­omy. But coun­ties don’t see any rev­enue from sales taxes, which go into state cof­fers. Tax rev­enue from the hotel goes into a spe­cial tourism fund, but because of an old loop­hole, it isn’t col­lected once a patron has been in a room for more than 30 days. So if a driller is, in fact, stay­ing in the hotel for three years, he’s only pay­ing taxes for one of 36 months.

Coun­ties rely on prop­erty taxes for the bulk of their income. So the new build­ings spring­ing up every­where do help, but the tran­sient drillers who go back to Texas and other states after a few months on the rigs aren’t pay­ing any.

Coun­ties don’t have the option of levy­ing their own prop­erty tax on local wells, either, due to a 2002 state Supreme Court deci­sion ban­ning the prac­tice. “We get no tax from the gas itself,” said County Com­mis­sion­ers Asso­ci­a­tion exec­u­tive direc­tor Doug Hill.

Leav­ing many Penn­syl­va­nia coun­ties feel­ing enough of a pinch to sup­port the pro­posed impact fee. Polls show nearly seven in 10 Penn­syl­va­nia vot­ers sup­port plac­ing a levy on gas drillers, and that’s caused many mod­er­ate Repub­li­cans – espe­cially in the south­east, where the idea is very pop­u­lar – to change their stance and sup­port a fee direct­ing money to local governments.

As a result, sup­port for a fee has steadily grown in the Gen­eral Assem­bly. Gov­er­nor Tom Cor­bett kept the Sen­ate and House from vot­ing on a fee in June, by threat­en­ing to veto any mea­sure that reached his desk before his Mar­cel­lus Shale Advi­sory Com­mis­sion issues its final report, which is due July 22. Cor­bett has asked the 30-member panel to help set his drilling pol­icy. Whether or not the com­mis­sion endorses the idea will play a major role in the governor’s stance on the mat­ter, and the impact fee’s chances of becom­ing law.