Stateline: PA Schools Fill Budget Cuts With Drilling Money

Scott Detrow / StateImpact Pennsylvania

A Tioga County well pad

Stateline takes a look at how some school districts are filling budget gaps by leasing out land for natural gas drilling:

In late July, the Blackhawk School District, 40 miles northwest of Pittsburgh, joined a handful of other school districts in Pennsylvania looking to cash in on the state’s natural gas boom.

In a vote of seven-to-one, the school board agreed to lease 160 acres of the district’s land to Chesapeake Energy, the largest holder of mineral rights in the Marcellus Shale region, which lies underneath Pennsylvania and neighboring states. At $2,000 per acre, the lease terms grant the district more than $300,000 upfront. If Chesapeake successfully extracts gas from below the district’s property, the schools would earn an additional 15 percent royalty on the profits.

This year’s state budget cut nearly $1 billion in basic education spending. The bulk of the decrease came from disappearing federal stimulus money, which accounted for $600 million in 2010-2011 school district funding.