Potter County Joins Call For Local Share Of ‘Impact Fee’

The Potter County Commissioners have joined with their counterparts across the region in calling for the revenue from any impact fee the state decides to impose on shale gas development to be shared with county and township governments where drilling is taking place. The commissioners this week sent the following letter to Governor Tom Corbett:

Like many other Pennsylvania counties, Potter County is beginning to experience some of the impacts from energy companies drilling, or preparing to drill, for natural gas is the Marcellus Shale. We have been following with interest the debate over proposals for an impact fee to help county and municipal governments reckon with increased expenses as the result of shale gas development.

Forecasting these impacts is a challenge, since drilling has barely begun in Potter County, but the lessons of other counties where more shale gas development has taken place are instructive. Industry representatives continually advise us that once the pipelines are in place, things will be much busier in Potter County. Here’s a brief summary of what we are already reckoning with:

Housing: The number of low-income individuals displaced by higher rents and greater demand for housing has tripled. Those with more limited means are finding it harder to obtain affordable mortgages. Our county housing director forecasts a greater burden being placed on the public sector to support the displaced and homeless.

Human Services. The gas industry is bringing into our county an element of society that is more likely to have behavioral issues that fall under county jurisdiction. Workers who arrive from outside the area do not have the community supports that local residents rely upon, such as extended families and faith-based groups, so in many cases they become wards of the county. Our Drug & Alcohol and Mental Health divisions are bracing for a heavier workload, at the same time the state has been cutting their funding.

Courts/Criminal Justice. We’ve seen an increase in civil litigation over mineral rights and a slight bump in our out-of-county jail inmate population. At the same time, we hear the drumbeat from the east. As recently as last week, Bradford County sounded the alarm that its county jail – which was expanded just four years ago – is full again and inmates are being housed, for a fee, in other counties. There is a ripple effect on the sheriff’s department, police agencies and probation officers.

Emergency Services. PEMA Director Glenn Cannon speaks eloquently of the burdens being placed on county departments of emergency services to train responders, map and locate gas well sites and characteristics, build and maintain radio communication networks in remote areas, update all-hazard plans and more. They’re exacerbated by the remote location of the gas wells in our rural county and the fact that the majority of our emergency responders are volunteers who are overstressed by training and fund-raising as fewer young recruits come aboard and funding sources are diminished.

Planning/County Services. Our county planning department tends to a growing list of county-based and regional planning initiatives such as land development, stormwater management, highway/bridge project advocacy, cataloging gas line stream crossings, road projects, compressor station construction, wetlands intrusions — and the list goes on. Our office is also relied upon as a resource by all of the townships and boroughs in Potter County. Our Conservation District is spread thinly. We’ve expanded our Recorder of Deeds and Tax Assessment offices, and we’ve carved out cubicle space for the title searchers and abstracters who practically climb over each other to access our records.

Tourism. One of our leading industries, tourism, is struggling due to a diminished deer herd, higher gas prices, effective marketing by competing tourist destinations, and other factors. We’ve changed our marketing slogan to “Potter County: Untouched, Unspoiled, Untamed.” We’ve also engaged in the regional tourist promotion strategy, the “Pennsylvania Wilds.” That obviously does not gibe with the growing reality that Potter County is also going to evolve into an industrial area for production and transportation of natural gas. We’re going to lose tourists as more forests are compromised, pipelines laid, compressor stations built, and motels filled with itinerant gas workers.

We have limited this impact summary to those that are being experienced or forecasted at the county level. Comments on roads and bridges, township/borough impacts, environmental issues and other aspects are best left to others.  There are two other points that we would like to make.

1. County governments across Pennsylvania are going to shoulder more of the financial burden as the federal and state governments tighten their belts, so this is not the time to saddle our local governments with stringent regulations that remove our flexibility when it comes to spending. As we are forced to implement unfunded mandates and continually asked to do more with less, any insistence that a county government share of revenue from a natural gas impact fee would come with many strings attached is troubling. This is especially true in Potter County, where a whopping 46 percent of our total acreage is tax-exempt because it is state forests, game lands or parks, while a large proportion of the remaining 54 percent is taxed preferentially through Clean and Green. That narrow tax base places a disproportional burden on the backs of the homeowners for three separate tax bills — county, municipal and school district. If the county government has some flexibility in how the impact fee revenue is disbursed, we strongly believe that we can lessen the blow of federal and state budget cuts. All we have is a real estate tax right now, and it’s woefully inadequate – and some would argue unfair – to pay for everything a rural county is required to provide by hammering property owners with higher taxes. And we have no airport, no railroads and not much in the way of highways in Potter County. So the formula that predicts an economic “multiplier” from shale gas production may not apply so strongly in Potter County.

2. We respect and support the steps that your administration and the legislature are taking to make the Commonwealth of Pennsylvania a more hospitable place to do business through tax reform and other measures. Government does have a role to play – whether it’s providing incentives when there’s clear accountability, or whether it’s getting out of the way of the private sector. But in our determination to make Pennsylvania more business-friendly, we should not ignore the plight of our local governments at a time when their burdens are growing. We do not favor a punitive tax that would be a disincentive to gas production. But we do believe that a carefully developed plan that captures a relatively tiny portion of the revenue produced from this economic juggernaut and shares it with local governments that are forced to reckon with the costs is something that merits your support.

We appreciate the diligence that your administration, the Marcellus Shale Advisory Commission and the legislature have demonstrated to get this right. There’s too much at stake to settle for anything less.