Setting the Record Straight on Marcellus Shale Jobs in Pennsylvania

A blog post from Stephen Herzenberg, originally published on Third and State.

The Keystone Research Center made The Wall Street Journal last week in a story on what the media is characterizing as a “political tussle” over the number of Pennsylvania jobs created in Marcellus Shale-related industries.

On Tuesday, we released a brief showing that less than 10,000 Pennsylvania jobs have been created in Marcellus industries since the end of 2007. The brief corrected recent press reports that confused “new hires” with “new jobs” and made the inaccurate claim that 48,000 new Marcellus jobs had been created. "New hires" and "new jobs" are not the same because most new hires replace people who quit, were fired, or retired.

In the same period that Marcellus industries reported 48,000 new hires (the fourth quarter of 2009 to the first quarter of 2011), there were 2.8 million “new hires” in all Pennsylvania industries — but only 85,467 jobs created. To measure job growth you have to use — big surprise — a jobs data base. That’s what we did.

Within hours of releasing our policy brief, the Marcellus Shale Coalition came out with a statement that:

Philly Power Structure Screws Working Poor Again

Here's the bankruptcy of the Philadelphia power structure -- and the Democratic Party -- writ large. All 17 members of City Council voted last Thursday to delay the tax relief for low-wage working people that was pushed through by Councilman David Cohen before he died. It would have given the working poor a 2% cut in their wage tax, phased in over a six year period, starting in 2007. As a result of this new legislation, a maximum 1% cut will be phased in, starting in 2017. No one believes it will ever actually take effect since this is the third deferral of Cohen's tax cut. What is actually going to happen is that it will be deferred into infinity.

Not one word was uttered about any of this in the mainstream press. It's a total conspiracy of silence about a further trashing, mainly by elected officials of the Democratic Party, of the interests of those who are the backbone of that very same Party.

The tempting idea that Shale Gas won't make money

Once again, Ian Urbina proves the New York Times has made a smart investment by letting him take long periods to research Deep Shale Drilling issues and only write occasional stories. His latest piece concerns the profitability of deep shale operations and whether or not the profit prospects aren't being oversold.

I'm tempted to love anything that makes the natural gas industry look bad. I believe deep shale drillers are going to destroy much of what's left looking natural and nice in this country. Many people forget that Pennsylvania may look lush and natural, but it's actually covered by relatively new forest. Less than 100 years old. It still hasn't fully come back from the lumber industry's destruction of it in the 1800. It's made a lot of progress, though, and I fear Shale Drillers will destroy all that.

So the idea that deep shale drilling is a Ponzi Scheme is tempting. But I don't buy it. Here's a passage from Urbina's latest piece, a piece that is definitely, definitely worth reading (even if I am criticizing its fundamental points here):

“Money is pouring in” from investors even though shale gas is “inherently unprofitable,” an analyst from PNC Wealth Management, an investment company, wrote to a contractor in a February e-mail. “Reminds you of dot-coms.”

“The word in the world of independents is that the shale plays are just giant Ponzi schemes and the economics just do not work,” an analyst from IHS Drilling Data, an energy research company, wrote in an e-mail on Aug. 28, 2009.

Company data for more than 10,000 wells in three major shale gas formations raise further questions about the industry’s prospects. There is undoubtedly a vast amount of gas in the formations. The question remains how affordably it can be extracted.

I believe, in the end, there will be a lot of money made off of deep shale drilling. I say that because I think it is important that those of us who want to protect the environment face facts and live in the world as it is. I believe Shale Drilling is going to progress, so we need to try to impose better rules on the drillers so that they won't do as much damage as they would otherwise.

It's tempting to believe that wheels will come off this industry, like it did the 2000 dot-coms, but I don't buy it. Why? Two words: peak oil.

Great victory today on earned sick time!

At a time when working people are being kicked around in Harrisburg and Washington, Philadelphia’s City Council, today, stood against the tide and passed the earned sick time legislation.
This legislation is a great victory for working people, as it enables workers to earn time that they can use when illness keeps them out of work. And like most legislation that helps working people, this bill helps the entire community as well. It is in all of our interest for people who have a cold, flu, or other communicable disease, to stay home rather than spread the disease to the rest of us. And that is especially important for people who work in restaurants and child care providers.

The bill now comes before Mayor Nutter whose administration has qualms about it. So now we need to call Mayor Nutter at 215-686-2181, and tell him how important it is to sign this legislation.

In the newspapers, the chief opponents of the bill were said to small business people. But, a minor change in the bill, which exempted small “mom and pop” businesses from the law, satisfied most small business people. And, while members of the coalition were not entirely happy with this exemption, we know that a lot of small businesses—like my own operation, Penn ACTION—actually do treat our employees like members of a family and are always willing to be flexible when our employees are sick.

However, in Council, it was not small business people, whose concerns one can understand even if one doesn't agree with them, but the Chamber of Commerce, Comcast, PECO, and Wal-Mart that stood against the bill. And--here is the kicker--Comcast, PECO, and Wal-Mart all provide earned sick time far in excess of the bill, and certainly have the margins that would enable them keep providing it to their employees. So why did they oppose the legislation? My sense is that two things motivated them.

First, while some of these companies have sick days, they also want to be free from rules that prohibit them from punishing workers who take those sick days as, for example, Wal-Mart does. In other words, these companies oppose any efforts to put into law any legal requirement that their employees be treated with respect and fairness. They don’t want to give up the tyranny that too often characterizes labor relations in most large, non-union companies.

And second, there was the matter of ideology. When working people are suffering from attacks in Harrisburg and Washington in America, they are fighting back and winning in Philadelphia. They didn’t want us to win today, even if this victory meant nothing to their own business, because they knew that victories for working people build on victories. And, no victory in the on-going struggle between working people and large corporations is acceptable to them.

So now Mayor Nutter finds himself right in the middle of this struggle. And it really is a defining moment for the Mayor. Mayor Nutter has problems with organized labor, which he can blame Philadelphia’s economic situation. Signing this law, however, will have no impact on the City budget and, scare stories aside, will have no impact on economic growth in the city. (Those scare stories are the same ones told when child labor laws were enacted, when the minimum wage was enacted, and every time it is raised. They weren’t true in the past and they aren’t true now.)

So this bill offers the Mayor a clear choice, between standing with the corporations that are trying to undermine working people and standing with working people who are fighting back.

It is a crucial moment for Mayor Nutter, one that will, more than anything else he does as Mayor, defines his place in the most central struggle of our time. Helping us enact this bill will put Philadelphia in the forefront of a nationwide revival of a progressive politics that supports working people.

A GOODE blog blast from the past ... on school funding!

We've been here before - on different levels - it's time to choose the same priorities!

Let's responsibly help the School District

During the last few months, the School District has been trying to close a staggering deficit. The Mayor has proposed two different tax increases to help the district--taxes that go directly to the district. The district is requesting $102M. This is roughly the same amount requested in City Council prior to resolution of the full day kindergarten and transpass issues. The administration proposes giving them $66M. It is $66M then that we need to solve for.

I am opposed to taxes that directly go into the Districts coffers (which is the current proposal). The only real accountability we will have over the District is putting money on the City side, not the district side, of the wall and tossing it over only after they have agreed with our priorities. The administration's plan does not do this.

Last week, an Education Accountability Agreement was signed between the City, District, and Commonwealth. It is nice but mostly theatre. Council has been pressing for greater accountability for the past many weeks, including at the District's May 24th budget hearing, in letters to Philadelphia's state legislators, etc. In fact, Councilman Clarke has proposed a mechanism to provide more funding to the District only if additional accountability measures were in place (Councilman Clarke made this proposal a week before the Education Accountability Agreement was signed or shared with Council)--essentially creating an accountability fund.

Throughout Council's budget hearings and meetings with the District this spring, the focus has been on making sure that programs that generate concrete, successful outcomes for kids are preserved. We have focused our efforts and scarce resources on preserving the existing programs that are proven to work – not create or expand new programs. This was again a theme during Friday's day-long hearing, in which I, Councilman Kenney, Councilwoman Sanchez, and others pressed the District on, for example, why it proposed to fund 18 days of summer school at a cost of $23M rather than 180 days of reduced class sizes at a cost of $21M.

With respect to increasing funding to the District, there is a path forward that provides the District with the additional $66M requested by the City last Friday without raising taxes.

• On the city side, the Administration can generate $6M through increased on-street parking rates; $10M through reductions identified during budget hearings that will not impact services; and $30M through reducing the year-end fund balance, which is proposed to be $50M (by way of comparison, the fund balance levels in FY10-14 Five Year Plan approved by PICA were as follows: FY10 = $2.988M; FY11 = $10.960M; FY12 = $31.377M; FY13 = $10.633M; and FY14 = $79.797M) – a total of $46M.

• On the District side, additional savings are possible by: (1) limiting summer school to those students who need the credits to graduate or move on to the next grade (savings of $10M); (2) keeping Promise Academies at their current size rather than expanding them from 7 to 17 schools (savings of $19M) – again, in this period of limited resources, we should be focused on maintaining existing initiatives that we know work for kids (early childhood education, accelerated schools, etc.), not expanding new programs; and (3) trimming some of the remaining fat in operations/administration – for example, the proposed almost $500K increase in the budget of the Communications Office (we think the savings could sum to $10M) – a total of $39M.

Thus, by making hard but not impossible choices, and without raising taxes, we can put on the table $85M to fund priority items at the District -- such as yellow bus service, reduced class sizes, accelerated schools, early childhood education, school nurses, extended day programs, and arts and music being some of the top priorities, which collectively cost $84M.

The education advocates who appeared before Council last Friday, including PCCY, testified that they were agnostic about where the additional funding came from and were, instead, squarely focused on making sure sufficient funding and accountability measures were in place. Parents United testified that there should be no more resources without accountability (don't get me wrong, they want resources).

I stand ready and willing to help the District find the resources it needs to maintain the programs that are working for our children, but I believe we can do so in a manner that improves accountability and avoids taxing our citizens even more than they are already taxed or relying on revenue measures that are untested subject to legal challenge.

This is what strength in numbers looks like

Most of the folks in this video are Clean Water Action staff, but there's a few of the rank and file Lobby Day attendees there. On Tuesday, environmentalists hit Harrisburg big [check out these photos]. You might have seen press reports about the rally. To me, though, the real story is what happened before the rally, as normal people went to visit their legislators and talk issues around the Marcellus Shale.

Folks were talking to legislators about the budget for environmental enforcement, rules to protect drinking water, a commonsense moratorium and taxing the revenues from shale to pay for cleaning up the drillers' destruction. Before the day happened, we had folks registered to come from 47 out of the 50 State Senate Districts, and our drop-off rate was really low. So not only was there a big noisy rally, but legislative offices were hearing from real voters. That's where change comes from.

It was also great to see the environmental community so unified.

An $8 million District slush fund is why we need more than political theater

Ackerman Remarks About 'Job For Life':

It’s business as usual at the School Reform Commission. $629 million budget deficit? Pshaw. Public officials demanding oversight? Meh.

All you have to do is look at the resolutions on the docket for Monday’s vote. Let’s start with SRC-16, a resolution that sets aside a whopping $8 million for what the administration calls “limited contracting authority” (LCA). District officials defined it as contracts under $15,000 that would not require SRC review. The reasoning presented was that the SRC had so many resolutions to look at already, it shouldn’t be bothered with contracts of such a low amount.

Hold on a second right there.

It’s pretty stunning to me that the District continues unchallenged with this type of behavior and rhetoric. No one wants to micromanage, but $8 million is an amount equal to the base salaries of more than 100 teachers. In a week where thousands of District employees lost their jobs, it's hard to imagine the District would have the decency to ask for an unscrutinized $8 million set aside at this time.

One would think that the crippling deficit, a federal IRS investigation and outcries from city and state officials about the District’s poor financial management would put a stop to such shenanigans. But apparently not.

Which brings me to my next point: What exactly is the purpose of the political theater surrounding a memorandum of understanding if stuff like this continues to happen at the District? Elected officials are fond of trotting out words like accountability and oversight, especially in the midst of the national spotlight and around budget season. What they forget is that these words require work and the practice of saying NO.

It is time for a new era for education in Philadelphia

I am sitting here trying to think of how to write a clever email about what is happening in Philadelphia right now. But, I am a working mom, and with all the proposed cuts to educational programs here and across Pennsylvania, the end of school approaching, the field trips permission slips I have to find and sign and summer activities to sign up for… well – I am fresh out of clever today.

If you want to skip the narrative and just take action: Click here. We are asking our elected leaders to lead more and invest more to improve the quality of education in the City.

It's Big Business Taxes That Should Go Up to Fund Our Schools

It’s pretty sad that Councilmembers and the mayor are thrashing about trying to find a way to fund the schools when the answer has been in front of them for years at the website of the Coalition for Essential Services. The answer is to raise the gross receipts tax and to transfer the proceeds over to the School District, subject to terms and conditions that would require the School District to use the funds appropriately.

As has been noted by Councilmembers Sanchez and Green, Council could raise substantial funding from such a tax increase even if it exempted most small businesses from the GRT entirely. That’s because most of the tax falls on large businesses that evade the net income tax, and from out of City businesses.

Thus raising this tax could be a win/win. It would raise money for the school district at the same time that it made the tax more progressive.

Paid Sick Days Can Help Make Philadelphia a High Road City of Opportunity

A blog post from Stephen Herzenberg, originally published on Third and State.

Last week, I wrote that when you look at the positive benefits and the low costs of Philadelphia’s proposed paid sick days legislation, it could end up paying for itself.

As I wrote that, I could almost hear a collective gasp from neoclassical economists: “If it paid for itself, employers would already do it!”

Posting the District's budget contracts

Weeks ago, Parents United made a FOIA request for the District's contracts, after waiting weeks for the District to report on them publicly. We got them, and so I’ve decided to put them up here.

Since the District budget hearings started, parents and the public have requested information on the hundreds of millions of dollars in contracts. We’ve done so because if we’re advocating for increased school funding and if the SRC/District is going to put on the chopping block essential priorities like full-day kindergarten, free transportation for students and local schools’ discretionary funds, then we need to make sure we’re holding the District accountable for its own spending practices and priorities.

In my last post or two, I’ve gone over some of the problematic expenses the District and School Reform Commission have approved in the midst of the worst financial crisis in school history. Usually, the only information that’s made available to the public is through the SRC resolutions posted every month.

But in fact, the resolutions don’t even begin to cover the number of contracts approved by the District. For example, I couldn’t even find the resolution for the $240,000 spent on Alta Communications, a politically connected marketing and public relations firm. It’s just one of the $986,000 spent on PR, governmental and marketing contracts, this despite the District’s having a $2.86 million, 20-person communications office that’s five times larger than the Mayor’s.

There are other questionable expenditures here too:

  • As the Notebook reports, the District’s new $27 million price tag for its Promise Academies works out to an exorbitant $3,600/student paid mostly in extended hours for teachers at those schools.
  • This year, the District is spending $8.3 million on the testing subsidiary of CTB McGraw Hill, an increase of 66% from the previous year’s $5 million, and more than three times the amount spent in 2009 ($2.6 million). CFO Mike Masch has said the District will cut about $1.5 million from testing contracts, but that hardly makes a dent – and that’s just for one company.
  • We may have 3,800 less teachers next year but Teach For America’s contract has more than doubled since 2009, from $301,000 to $668,000 so far in 2011.
  • What exactly did $244,000 buy from Public Financial Management, the organization brought in during the 2007 fiscal crisis to institute budgetary controls and ensure that a similar crisis wouldn’t happen. Last year we paid over $500,000 to PFM. Can we please have this money back?
  • $66,686: The fee for the Council of Great City Schools, which recently named Arlene Ackerman the best urban superintendent in America. This amount is a third larger than the $48,000 paid to CGCS in 2009.
  • Sterlen Barr, aka No Puff Daddy, gained a $234,000 contract for presentations on health and nutrition. Just to put this in context, in FY2011 Xerox had a $299,000 contract District-wide.

There are other things like the $2.2 million spent on Achieve 3000, a school computer program, that didn’t exist in 2009, to $443,000 spent on the International Center for Leadership in Education to the infamous million dollar turnstiles at District headquarters.

As the District looks to pass a budget today that fails to uphold things we know work in education, you have to wonder who’s checking on the contracts that don't seem to make it to public light often enough.

Is the District padding its books on Central Office Administration?

As I was slogging through the District’s 400-plus page budget book, I was struck by the significant increases and expansions within various central office administration budgets. (All references are to the District's FY2011-12 Consolidated Budget).

Consider: The Associate Superintendent for Academic Support (p. 306)

  • In FY10 there were 50 filled positions
  • In FY11 there were 90 estimated positions (but no indication they were filled)
  • In FY12 the request is back down to 49.5 positions.

Included in FY11 was the proposal to start up two entirely new offices, one for student discipline, hearings and expulsions, and another for non-instructional school support. In. the. middle. of. a. budget.crisis.

The result is a “45% savings” in that office of $3.68 million dollars from FY11 but an increase of $309,357 from FY10.

How we run our schools: the budget fight within the budget fight

Yesterday School District officials presented their budget request to City Council - an additional $70-100 million above the regular allocation - to fill an over $600m projected shortfall. The hook is that the District has threatened to otherwise end a slate of programs that are more integral than accessory: full day kindergarten, schools that serve the most vulnerable kids, tokens that get students to and from school. Today Council will hear public comment, and has a long list of people already signed up to testify.

So despite reports that the mayor has already committed to find the money, there is no straight line to how this would get done. There seems to be deep public and political support for fully funding public education in the city, but no consensus yet as to the least painful way to raise the money.

And there are also sharp questions about the District's own spending priorities, powerfully outlined by Parents United (and posted by Helen, below). These questions only get fueled by reporting like today's Inquirer tally of the cost of the District's internal investigation into whistleblowing over its contracting practices. The District should respond, and hopefully this budget process can become a tool to compel a real two-way conversation.

While working for Councilwoman Sanchez, I had the opportunity to visit Fairhill Community School, one of the drop-out prevention programs that is threatened. Most often when kids are corralled onto a panel to talk to a bunch of politicians, no one says anything particularly interesting. But there, every student who spoke told an arresting story - of how they came to the school, and how the respect and engagement they felt there was unlike anything they had experienced before. Each kid was 1000% clear that they would have never made it through their regular high school, or had already dropped out, because the lack of safety and size at places like Fels made it impossible for them to get the support they needed to deal with school on top of pretty harrowing life circumstances. And many, many of these students were girls raising children. If the District did go through with ending alternative schools like Fairhill, aimed at drop-out prevention and returning kids to school, there is no substitute. These kids will not graduate. We can't seriously allow them to be treated as a bargaining chip in the budget, and at the very least any additional funds should be securely targeted for the threatened programs.

But there will surely be additional cuts (language support is proposed to be halved), given the shortfall. We have to look beyond the obvious crises and consider the full budget picture, and insist on a real role for the mayor, Council, and public in deciding priorities and how and where cuts are made.

Questions City Council should ask the School District

In my spare time, I'm lucky to work with an amazing group of parents citywide who've formed and re-ignited Parents United for Public Education, an all-volunteer, independent collective of parents who believe in quality schools and responsible funding.

As we've watched this budget battle unfold - and we've seen tactics like this unveiled in previous years with this administration - I'm feeling more and more that the District has unfairly put up essential services to schools in order to avoid what ought to be pointed questions about their priorities, spending practices and managerial and financial oversight.

Parents United distributed a memo to City Council members today to encourage a forum for these questions, one of the few places where District officials may actually have to answer questions rather than sit stonily or obfuscate. Well, maybe they'll do that too today - we''ll have to see. In either case, in the interest of openness, I printed Parents United's memo to Council below.

DATE: May 24, 2011
TO: Members of City Council
FROM: Helen Gym, on behalf of Parents United for Public Education
RE: City Council hearings on School District budget

Thank you very much for the opportunity to share Parents United’s analysis of the District budget situation. Parents United for Public Education is an all volunteer, independent collective of parents which believes in quality schools and responsible funding. Our priorities in this budget:

  1. Ensure full-day kindergarten.
  2. Restore free transportation for all school-age students. (Sign our petition!)
  3. Restore the 29% cut in each school’s discretionary funds.
  4. Impose a moratorium on all non-essential contracts, hiring of personnel, and start-up/expansion of new programs and initiatives.
  5. Restore the District's share of property tax revenue from 55% to 60% through a millage shift and assume the $4 million BRT expense and the City Controller’s office salaries.

We believe that the District has unfairly put up essential services rather than set priorities, change their spending practices, and jettison non-essential expenses. We are advocating that Council give more money for targeted allocations, BUT we also ask Council to demand changes in the District’s proposed budget.

District budget concerns

Summer school
The District plans to spend $23 million on an 18-day summer school program, nearly the same amount it would cost to cover full-day kindergarten. (See footnote below)

  • Last week, the SRC passed a resolution approving $4.7 million for textbooks for the 18-day program.[1] How is this a strategic use of money?
  • The SRC also approved more than $1 million for enrichment activities like a sports and art camp. While we do not deny the importance of enrichment, again, is this a priority area for such a brief time period?
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