Vestal Schools Missing Out on Natural Gas Benefits
Robert Poloncic and others take a look at the school budget cuts in Vestal compared with school districts across the state line in Pennsylvania. New York schools are cutting programs while schools across the border are flourishing thanks to responsible natural gas development.
*Additional contributors: William B. Bush, Ph.D., Superintendent, Elk Lake School District Susquehanna County Career & Technology Center; Douglas McLinko, Commissioner, Bradford County Pennsylvania; Mike Petro, BCC Student & Vestal Coalition Intern; Robert Tiberio, Steve Howland & Suzanne Messina, Vestal Coalition Steering Committee.
The Vestal School Board’s proposed 2013-14 budget would eliminate 17 elementary school positions in the Vestal School District to help make up for a $1.9 million budget shortfall. Additional cuts to athletics, bus routes, co-curricular activities, facilities, maintenance, support services and non-mandated programs such as pre-kindergarten may also be necessary. To completely close the budget gap without any cuts, school tax bills would need to increase some 6%, requiring 60% voter approval to exceed New York’s 2% property tax cap.
The proposed elimination of 80 jobs in Maine Endwell schools should be a warning to Vestal that no school district is immune to the forces that are straining budgets throughout the Southern Tier. As the cost to school districts of state mandates, employee pensions, and health care continues to increase, school budget gaps will widen. Additionally, recent remarks from Governor Cuomo do not bode well for increased state aid.
The Vestal School District needs a significant new source of revenue that will eliminate multi-million dollar deficits and the painful cuts that are virtually certain in the years ahead. It’s time to look closely at the numerous benefits that safe, well-regulated natural gas development will bring to the Vestal Central School System.
The population of Vestal is aging and the number of young families who come to Vestal or who stay here is decreasing. Vestal’s kindergarten class has been shrinking for years, and in 2013 the class was only just over 200, the lowest in decades. In the following letter sent to the Vestal Gas Coalition, Vestal grad Mike Petro, a bright young Broome Community College student pursuing a career in environmental law, explains how natural gas development in Vestal could reverse these trends and provide Vestal graduates with greater local opportunity:
Year after year, Vestal High School has retained its exceptional quality of education, producing some of the area’s best and brightest graduates. But as Vestal’s education budget is strained, our population shrinks, and graduating class sizes get smaller, Vestal’s high standard of education could be in jeopardy. It is tragic that so many of Vestal‘s educated young adults, myself included, will be forced to leave the Southern Tier to find career opportunities and a place to build their families.
Natural gas development in Vestal would help end this exodus and attract young families to our town. The industry not only provides good labor and trucking jobs, it requires educated professionals in engineering, geological sciences, environmental protection, and economics. These aren’t just jobs; these are lasting careers within a rapidly expanding industry, just the type of positions our next wave of job seekers need in order to stay in Vestal and for Vestal to preserve the quality of life and education we grew up with.
A wave of new Vestal residents will also stimulate housing demand and increase market property values. New construction and an expanding tax base could help reduce Vestal’s large debt.
Let’s look closely at the huge revenue potential for Vestal schools in New York’s little known ad valorem tax. This is a 4% real property tax on produced natural gas paid to localities by the gas companies, which would start providing revenue for the Vestal School District within 2-3 years after drilling permits are issued. The tax money stays in the community and benefits every Vestal resident. Just a single well pad with six individual wells would generate millions of dollars over its typical 15-20 year lifespan.
The chart below shows the ad valorem revenue that would be paid to the Vestal School District over a ten year period for “slow development” (blue bars) with only one new well pad per year for five years (5 pads total), and for “moderate development” (red bars) with well pads added as indicated on the chart (12 pads total). The data used to generate this chart comes from the New York State Department of Conservation Supplemental Generic Environmental Impact Statement (SGEIS) and reflects actual well production figures from producing wells in nearby Susquehanna and Bradford Counties in Pennsylvania.
For either slow or moderate development, millions of dollars will be generated for Vestal schools in the first ten years alone, assuming a conservative market price for natural gas. And because it is most likely that about 24 well pads would be built within 5 years, these totals could easily double. Further, if natural gas prices increase in the years ahead, revenue will increase proportionally. And if the deeper Utica Shale layer is eventually tapped, natural gas will continue to provide significant revenue for Vestal Schools and the Vestal Public Library for decades.
New gas industry jobs and income will also have a lasting positive effect on economic growth in Vestal. In a soon to be published editorial, Bradford County (PA) Commissioner Douglas McLinko states, “[Bradford] County has become one of the most active drilling counties in the Marcellus Shale over the past five years, resulting in prosperity not seen for many decades.” He adds: “Our green space and large tracts of land are being preserved for future generations to enjoy.”
Stressing the economic advantages of a local gas industry, McLinko continues:
“As the state debates a budget for 2013-2014, another benefit with timely relevance is the industry’s contribution to the state’s coffers … in 2012 the oil and gas industry paid almost $1.3 billion in state and local taxes – that’s nearly 4% of the Pennsylvania’s 2011 tax revenue. Locally in Bradford County we eliminated our debt and were able to permanently cut property taxes this last December by nearly 6% — all due to new revenue from the natural gas industry. Imagine how much tougher this and recent budgets would have been for taxpayers without the tax dollars coming from the oil and gas industry; not to mention the numerous other businesses who support the industry sending their energy derived tax dollars to Harrisburg.”
Commissioner McLinko sees continuing opportunity and a bright future for Bradford County, inviting others to take a look: “[N]ow we’re demonstrating the great opportunities to use natural gas locally. I welcome other elected officials to come to Bradford County to learn from our experiences and see how we’re getting it right.”
Industry investment in better roads and bridges has proved to be the norm in Pennsylvania, minimizing inconvenience and keeping rural bus routes safe.
The following is a letter from William B. Bush, Ph.D., Superintendent of the Elk Lake (PA) School District and a leading member of the Susquehanna County Career & Technology Center:
The Elk Lake School District has greatly benefited from its involvement with the natural gas industry. These benefits range from financial resources to program development and support.
To date the district has received approximately $2,000,000 in delinquent taxes, lease and royalty payments from Cabot Oil & Gas Company. The additional revenue has enabled the district to keep real estate taxes extremely low. The Elk Lake School District is a dual county school district comprised on Susquehanna and Wyoming Counties. Susquehanna County tax rates stayed the same from 2007-08 until 2011-12 with a small increase in 2012-013. Wyoming County tax rates decreased from the 2004-05 to 2012-13. The average tax bill is around $1,000.
This is quite amazing considering the financial hardships school districts across Pennsylvania and New York have experienced the past three years. Our school district has lost over 28 administrative, professional and support staff positions the past three years. There is no doubt these numbers would be far worse if the district hadn’t been able to rely on the gas revenue it has received.
The district has forged an excellent relationship with Cabot Oil & Gas Company. They have provided financial support for many of our academic programs as well as other community projects that have benefited our students and community.
Specifically they have donated over $100,000 to our Career & Technology Center for student uniforms, equipment, and tuition.
Some other examples showcasing Cabot’s commitment to the district include upgrading an elementary student drop off and pick-up area for parents which greatly reduced safety concerns. They have also donated the use of their construction equipment to upgrade and maintain our existing athletic playing fields and surfaces.
Cabot has always been a willing and helpful partner in supporting our school and community. It is my experience and I am sure the residents and tax payers of the Vestal School District would find the same cooperation and commitment we have enjoyed. These are hard economic times and we need all the assets we can get to help our schools and communities continue to provide the opportunities our students need to compete in a global society.
In today’s local climate of population loss, economic decline and perennial budget shortfalls, shouldn’t Vestal’s educators welcome what may be the only significant, long term source of revenue on the horizon? And wouldn’t overburdened Vestal taxpayers be willing to adjust to a few inconveniences from gas industry activity in the countryside?
We think the answer to both questions is yes. Safe natural gas development in the Town of Vestal will likely keep property taxes down and guarantee ample means to meet all the educational needs of our children and grandchildren for many years to come.