Shale Development Brings Economic Changes to Eastern Ohio

Financial Changes in East Ohio 2015-05-21The past four years have seen a world of change in eastern Ohio. With the ongoing development of oil and gas in the region, some of the most historically impoverished counties in the region and the state have begun to experience a significant increase in investment. The corridor stretching from Carroll County to Noble County is the prime development area with 83% of the Utica/Point Pleasant drilling permits issues by ODNR in this six-county region (as of April 25, 2015 – Carroll, Harrison, Belmont, Guernsey, Monroe and Noble).

The recent decrease in oil prices and current low cost of natural gas is cause for concern with local residents and leaders who are hoping for a continued drilling boom. However, even with a potential drop in drilling, the region is likely to see a continued short-term increase in production as midstream infrastructure and pipelines continue to come online.

The drilling activity has been occurring long enough to see some patterns in a variety of local/regional governmental receipts. Consider the following statistics concerning Noble County and the six surrounding counties (Morgan, Muskingum, Guernsey, Belmont, Monroe and Washington).

Lodging Tax:

Lodging tax receipts in the region increased from $1.8M in 2010 to $2.9M in 2013. Revenues increased by 19.2% between 2010 and 2011 and an additional 33.9% between 2011 and 2012. These figures do not include any values from Noble or Monroe counties which did not have a lodging tax in that time period.

Sales Tax:

Within the region, sales tax receipts increased from $30.9M in 2010 to $48.1 M in 2014. Annual increases were 5% from 2010 to 2011, 11% from 2011 to 2012, 12% from 2012 to 2013, and 19% from 2013 to 2014. Belmont increased by 56% between 2010 and 2014, Guernsey by 68%, Monroe by 105%, Morgan by 40%, Noble by 141% and Washington by 32%. The largest dollar increase was in Belmont County from $11.3M to $17.7 M. In Noble County, sales tax receipts increased by 0% between 2010 and 2011, 21% between 2011 and 2012, 56% between 2012 and 2013 and 29% between 2013 and 2014. Dollar increase in Noble County was from $1.1M in 2010 to $2.7M in 2014.

Noble County General Fund:

The general fund balance in Noble County increased from $3.5M in 2010 to $5.8M in 2014. By year, the increase was 7% between 2010 and 2011, a decline of 3% between 2011 and 2012, an increase of 26% between 2012 and 2013 and an increase of 27% between 2013 and 2014.

Noble County Recorder’s Fees:

Recorder’s office receipts as well as sales tax receipts are component parts of the general fund. Recorder’s receipts increased from $4,944 in 2010 to $397,160 in 2014. Annually receipts increased by 3,054% between 2010 and 2011, by 126% between 2011 and 2012, declined by 3% between 2012 and 2013 and increased again by 16% between 2013 and 2014.

Banking Deposits in Noble County:

In addition to these government receipts, banking deposit activity in Noble County was also robust in this time period. Deposits in the county increased from $151M in 2010 to $226M in 2014. Annual increases were 3% between 2010 and 2011, 19% between 2012 and 2013, 19% again between 2012 and 2013 and 3% from 2013 to 2014.

(Submitted by Mike Lloyd, Assistant Professor, County Extension Educator and County Extension Director, Noble County & Buckeye Hills EERA)

Note: Mike will be retiring from OSU Extension on June 30. The impact of his work in Noble County and throughout Ohio has been significant. Extension is pleased that the Noble County Commissioners have continued the partnership and funded the position that will enable this high-value work to continue.

The changing face of philanthropy in Eastern Ohio

Eastern Ohioans have always been generous. Disaster or illness strikes, we give generously of our time and resources. But the concept of organized philanthropy strikes many residents in this part of the state as foreign . . . something that the Rockefellers or Bill Gates do . . . but not us!!

Historically, southeastern Ohio which includes 26 of the 32 Ohio Appalachian counties has been underrepresented in charitable assets. This region represents 29.5 percent of the state’s counties, 10.5 percent of the state’s population, but only 2.5 percent of the charitable assets and 2.7 percent of giving in the state. For illustration, Ohio’s largest community foundation, The Cleveland Foundation, had approximately 4.8 times the assets and made about 2.6 times the gifts of all 132 foundations in southeast Ohio combined.

closeup of blank checkOil and gas development in the region may be a catalyst for the growth of organized giving in this part of the state where shale development is occurring. New community foundation funds have been established in Harrison and Monroe Counties, and the Guernsey County family of funds all have been consolidated under the umbrella of the Foundation for Appalachian Ohio. In Noble County, a local community fund, under the Marietta Community Foundation umbrella, has distributed nearly $15,000 in grants to local non-profits and $7,000 in scholarships since its creation in 2005.

These “baby-steps” in some of Ohio’s smallest counties are long overdue and represent a positive sign in the region. The creation and maintenance of these local funds provide a seed from which long term growth in charitable giving may result. Hopefully some small portion of the region’s new found oil and gas wealth will make its way into these funds to assure that the current gas wealth will help the region thrive for years to come.

(Submitted by Mike Lloyd, Assistant Professor and County Extension Educator, Noble County & Buckeye Hills EERA)

Community Impact of Ohio Shale Development

SERCOil and gas production dates back to the 1800s in eastern Ohio, where thousands of wells have been drilled into shallow sandstone deposits and other formations. Since 2010, however, energy resource development in Ohio has been on a scale far exceeding that of the previous 100 years. The impact on farmers and other rural landowners has been substantial, including payments of hundreds of thousands of dollars for many who have leased their subsurface resources. Local communities and governments have experienced change as well . . .   read complete article.

Find the series of SERC Notes on the Subsurface Energy Resource Center (SERC) Web site.

(Submitted by Mike Lloyd , Assistant Professor and County Extension Educator, Noble County & Buckeye Hills EERA)