Senator Wayne D. Fontana | News & Views: June 19, 2012

Being from western Pennsylvania, I understand what a great region is it to live in and I’m always looking for new ways to attract and entice businesses to set up shop here. As many of us may remember, our area was once a thriving coal and steel industry. However, due to the demand diminishing for coal and steel, western PA has experienced an economic decline over the past several decades. With that being said, I believe our ideal location can serve us great pride in the near future.

Recently, Governor Corbett made headlines with the announcement that Shell, an energy and petrochemical company, is looking to build a new ethylene “cracker” facility to process wet gases from the Marcellus Shale in Beaver County. An agreement was signed that would use the location of the current Horsehead Corp., a 300-acre zinc smelter property along the Ohio River in Potter Township near Monaca, which is moving its operations to North Carolina in 2013.

Petrochemical facilities use heat and pressure to “crack” wet gases such as ethane, propane and butane to produce things like ethylene, which is one of the basic building blocks of a variety of petrochemicals-based products like plastics, tires and shoe bottoms. The facility would be the first cracker in the Appalachian region, where the production of gas from Marcellus Shale has boomed in recent years. Currently, almost all of the cracker facilities operating in the United State are located near oil and gas fields on the Gulf Coast.

The Beaver County site will be Shell’s fifth domestic cracker plant. It has seven others around the world. Due to fierce competition with Ohio and West Virginia for the cracker facility, the Pennsylvania Legislature authorized, in March, the future site as a 15-year tax-free Keystone Opportunity Zone. To qualify as a Keystone Opportunity Expansion Zone, the cracker plant and its affiliates would have to invest a combined $1 billion in plant facilities and employ 400 full-time workers. Although Shell would pay some sales tax, the company would not have to pay any income or property tax.

Now, Governor Corbett wants to further the deal by granting Shell $1.65 billion in tax credits over 25 years to build this facility in Pennsylvania. Specifically, the Governor’s proposal would give $66 million in annual transferable tax credits for the next 25 years, starting in 2017. The tax credit would be a nickel per gallon of ethane with up to 20 percent of the eligible tax liability. This would cover the purchase of about 3.4 million gallons or 85,000 barrels of ethane a day making it a “world class” cracker.

The Pennsylvania Department of Community and Economic Development said the credit would be available not only to Shell, but to other potential petrochemical plants that could be sited here as well. It is believed that Shell’s facility would take two years for construction of the actual cracker to begin and then an additional four years to build. However, the Governor would like to see this tax credit approved as a part of the 2012-13 budget negotiations to try and expedite a commitment from Shell.

Estimates on cost of the project range from $2 billion all the way to $4 billion. However, experts have stated that we cannot get a more exact figure until construction on the facility actually begins.

More importantly, this project is believed to bring in thousands of jobs making it the biggest economic development effort aimed at one company the state of Pennsylvania has ever seen. Estimates say that 10,000 to 20,000 jobs could be generated during construction and several hundred permanent workers would be needed to operate the plant. Furthermore, job creation will also spur from spin off industries for purchasing things like equipment and supplies as well as for unrelated businesses like restaurants.

Pennsylvania has the potential to become a booming state once again. However, we must ensure that this deal does not shortchange the citizens of Pennsylvania much in the way the Administration shortchanged our state with the giveaways for the Marcellus Shale Industry.

Shell’s parent company is Royal Dutch Shell, which is the second largest company in the world. In addition, Royal Dutch Shell pocketed $7.3 billion in profits just in the first three months of 2012. Obviously, a company of this size can afford a project this big. While I understand the importance of offering tax incentives to attract Shell to Pennsylvania and not a competitor state, we have to remember at the same time that this enticement would be Pennsylvania’s largest financial incentive package ever. The tax credits over 25 years and making the Beaver County site a Keystone Opportunity Zone is a sure win for the cracker, but provisions need to be put in place to make sure this is a win for our state as well.

One of the biggest ways we can make sure the cracker is a success for Pennsylvania is through permanent good paying jobs. Job estimates range from a couple hundred to a couple thousand and depend on a lot of factors. We need to demand job numbers and make sure those numbers are tied to the tax credits Shell receives. If the company can’t give us the promised jobs, then we can’t give them more money.

Furthermore, the future site of the cracker is about eight miles from the border with Ohio and West Virginia. We have people in Pennsylvania who are ready and more than willing to start working, however, there should be requirements that guarantee these permanent jobs go to Pennsylvanians and not to out-of-state workers. After all, Pennsylvania would be the one giving this company the tax incentives.

In closing, negotiations between Shell and the governor have been going on for months. However, we are less than two weeks away from the 2012-13 budget being enacted and the Governor is just now bringing these tax credits to the table, in a manner that lacks transparency. Perhaps what is most troubling in my mind is how the Governor is using the cracker deal as leverage in these last days of budget negotiations. As we have witnessed here once again, the Governor is looking out for big businesses instead of funding for essential things like basic education. We cannot continue to use children and the health and well being of taxpayers to push the Governor’s agenda.

State Senate Hearing Focuses on Funding Public Schools

Senator Fontana attended a policy hearing on basic education funding in Monroeville on June 14th where school administrators, parents and students testified on the hardship the Governor's cuts in education funding has caused. Senator Fontana, an advocate for public education, spoke in an interview after the hearing. » Watch Video

Port Authority Cuts

I have heard from, and spoken to, many constituents in light of the recent news that the Port Authority plans to eliminate certain T stops within my Senatorial District. I have spoken with officials at the Port Authority about the elimination of T stops and have requested they re-evaluate and change some of these proposed eliminations based on the feedback I have received from my constituents.

Earlier this year, the Port Authority announced a 35% service cut to bus routes and put forth a plan that would institute these cuts beginning this September. This plan is a reaction to an estimated $64 million deficit in its 2012-13 operating budget. I understand the financial constraints the Port Authority faces but the plan they have put forth is illogical and unacceptable as it completely eliminates bus service to several neighborhoods. I will continue, as I always have, to advocate for sustainable mass transit funding. In the meantime, the Port Authority needs to ensure that EVERY neighborhood has access to mass transit and this message is one I have, and will continue, to deliver to the Port Authority.

Please know that I am serving as a voice for all the communities I represent but the final decisions as to which stops or bus routes are eliminated ultimately rests with the Port Authority. I will continue to weigh in on behalf of my constituents with the Port Authority but I need your support. I encourage my constituents to also contact the Port Authority and the Port Authority's Board of Directors and voice your objections to them.

Summer Meals for Children

With most students beginning summer vacation, I want parents to be aware of a program that offers children from low-income families a free summer meal. The Summer Food Service Program provides eligible children, 18 and under, with free meals throughout the summer at more than 2,000 locations around the state. This program was created by the U.S. Department of Agriculture (USDA) to ensure children have access to nutritious meals during the summer break. Site sponsors provide the facility and free meals for local children. The PA Department of Education administers this program by approving non-profit site sponsors and providing oversight. To view locations where meals are offered as part of the Summer Food Service Program, please visit www.pasummermeals.com. For more information please contact [email protected] or 1-800-331-0129, ext. 537637.

Unclaimed Property

Last week, the PA Department of Treasury advertised in the Pittsburgh Post-Gazette the names and addresses of Allegheny County residents with unclaimed property in excess of $250.00. The Department of Treasury is in possession of over $104 million of unclaimed property from Allegheny County residents. Examples of unclaimed property include: closed bank accounts; uncashed checks, including paychecks; lost stocks and bonds; contents of safe deposit boxes; proceeds from the demutualization of insurance companies; and expired gift cards and gift certificates.

Since the Department is only required to advertise property in excess of $250.00 your name may not have appeared in the newspaper if you have unclaimed property totaling a lower amount. To search the unclaimed property database please visit www.patreasury.gov and click on the “unclaimed property” tab or click on this link. You may also call 1-800-222-2046 to inquire about unclaimed property.

Staying Healthy in the Heat

As summer officially begins tomorrow, temperatures will surely continue to rise over the next few months. Make sure you take precautions during the summer months to minimize the dangers from excessive heat. The PA Department of Health offers the following tips to avoid heat-related illnesses:

Heinz History Center Celebrates Local Food Vendors

Sample food from nearly 50 local vendors as part of the Heinz History Center's Fun & Flavorful Food Expo on June 23rd. The event, Hometown-Homegrown, encourages visitors to sample an assortment of local foods and swap recipes with the finest culinary experts in western Pennsylvania. Chris Fennimore, host of WQED Cooks, and other local chefs will reveal their culinary secrets as part of special cooking demonstrations throughout the day in the History Center's new Weisbrod Kitchen Classroom. WQED’s Rick Sebak will join Chris for three entertaining sessions and show visitors his favorite cooking recipes.

Hometown-Homegrown will also feature scavenger hunts, food trucks outside the History Center, and fitness activities. During the event, History Center docents will discuss how food was prepared and consumed throughout Pittsburgh’s history, from the French & Indian War through the post-World War II era.

For more information on Hometown-Homegrown, please visit the Heinz History Center website or contact Lauren Uhl at 412-454-6392 or [email protected].

Beechview Happenings

The Beechview Athletic Association (BAA) is holding two upcoming signups for the fall soccer season. The first is scheduled for June 23rd at Vanucci Field on Orangewood Avenue from 10 a.m. – 2 p.m. with the second being held on July 7th from 10 a.m. – 2 p.m. at Alton Field on Alton Street. A registration and player release form can be printed from the BAA website. For more information please contact Ike Booth at 412-726-0064.

The Carnegie Library of Pittsburgh - Beechview branch is presenting Part II of Pittsburgh and the American Civil War on June 28th from 5:30 – 7:30 p.m. at the library on Broadway Avenue. Local author, Arthur Fox, will present details from his book, Pittsburgh During the American Civil War, which chronicles Pittsburgh’s unique contribution to the war effort.

Tour of the Strip District

Neighbors in the Strip is hosting the 2012 Summer in the City, Hip Strip Tour, on June 24th from 10:30 a.m. – 2:30 p.m. The Hip Strip Tour takes visitors through the Strip and stops at 11 participating shops where specials, gifts, coupons and tastings will be offered. Space is limited and reservations are required. To reserve a spot on the tour, please call 412-201-4291. For more information on the Hip Strip Tour, please visit www.NeighborsintheStrip.com.

Buhl Community Park

The Children's Museum of Pittsburgh is inviting the public to the grand opening of the revitalized Buhl Community Park at Allegheny Square on June 23rd. The official park dedication ceremony will begin at noon and a full day of family fun is planned both inside and outside the Children's Museum. All attendees that day can enjoy free admission to the museum. Some events planned include: the New York City based Cirque-tacular, a troop of aerialists, acrobats and dancers; the River City Brass Quintet; a hula hoop jam; and hands-on activities and demonstrations by the National Aviary, Andy Warhol Museum, New Hazlett Theater, and Saturday Light Brigade. For more information, please visit www.pittsburghkids.org.

Fontana Fact

The McKees Rocks Bridge was erected in 1931 by Allegheny County as part of an intensive bridge-building campaign in the late 1920’s and early 1930’s. The bridge stretches nearly 1.5 miles across the Ohio River. It was listed on the National Register of Historic Places in 1988.

Shell Cracker Facility