Liberal “Think” Tank Keystone Research Center Releases Political Attack On Job Creation

KRC Affiliate Forced To Retract Earlier Report That Relied On Flawed Research

HARRISBURG — Republican Party of Pennsylvania Executive Director Mike Barley released the following statement in response to the Keystone Research Center’s (KRC) attack on job creation:

“One would think that with their party’s poor record on job creation, the Democrats and their allies would be highlighting any industry that has actually put 48,000 people into family-sustaining jobs during President Obama’s term,” Barley said. “The fact is that the Marcellus Shale gas industry has and will continue to create jobs all across Pennsylvania. I would also point out that despite the KRC’s attempts to skew this data, the Marcellus industry has created 48,000 jobs. They are real jobs and so are the people filling them and the families these jobs are sustaining.

“The KRC and its affiliates have been known to release fact-challenged reports that support their extreme, liberal point of view. To assert that the unprecedented job growth in counties like Bradford is due anything other than the Marcellus boom, doesn’t pass the smell test and does little to bolster the KRC’s already shaken credibility.”

The Keystone Research Center is the parent of the Pennsylvania Budget and Policy Center, the same group that had to partially retract an earlier half-researched analysis of the tax revenues generated by the Marcellus Shale gas industry.

According to a report in The Pittsburgh Tribune-Review on April 29, 2011, a Pennsylvania Budget and Policy Center, a subsidiary of the Keystone Research Center, report was debunked:

A Harrisburg group said on Thursday there are flaws in its report on corporate income taxes paid by energy companies drilling for natural gas in Pennsylvania’s mile-deep Marcellus shale formation.

The Pennsylvania Budget and Policy Center’s report, “Representation without Taxation: How Natural Gas Producers Escape Taxes in Pennsylvania,” overestimated how frequently firms use their status as limited-liability companies to pay the state’s 3.07 percent personal income tax, instead of the much higher 9.99 percent net corporation income tax, a center spokesman said.

The opportunities Marcellus Shale drilling are providing are having a positive impact on our entire Commonwealth:

Family Sustaining Wages

  • “The average wage in the core industries was $73,150, which was about $27,400 greater than the average for all industries.” (Center for Workforce Information & Analysis, June 2011)

Employment Impact

  • “Areas with significant Marcellus Shale drilling activity have seen notable decreases in unemployment rates.” (Center for Workforce Information & Analysis, June 2011)
  • “The Northern Tier Workforce Investment Areas (WIA) experienced an increase of employment growth of over 1,500%.” (Center for Workforce Information & Analysis, June 2011)
  • “The Central WIA was second in terms of employment growth by volume and by percentage with an employment increase of almost 1,000%.” (Center for Workforce Information & Analysis, June 2011)
  • “Significant employment gains were seen in each WIA that had substantial Marcellus Shale drilling activity.” (Center for Workforce Information & Analysis, June 2011)

Infrastructure Investment

  • “Marcellus shale drillers spent $411 million in the past three years to help rebuild Pennsylvania roads…” (Pittsburgh Tribune-Review, June 21, 2011)
  • “Since 2008, approximately 21% of the payments have been made toward local roads, while approximately 79% went toward improving roads maintained by the state.” (MSC press release, June 21, 2011)

Tax Revenue Generated by Responsible Marcellus Development

  • “Drilling Industry Paid More Than $1 Billion in State Taxes Since 2006, Tax Payments in First Quarter of 2011 Already Surpass 2010 Totals” (Dept. of Revenue press release, May, 2, 2011)
  • “The Revenue Department’s analysis, which breaks out tax payments from oil and gas companies and their affiliates through April 2011, indicates that 857 of these companies have already paid $238.4 million in capital stock/foreign franchise tax, corporate net income tax, sales/use tax and employer withholding to the state in 2011. These figures from the first quarter of this year already exceed by nearly $20 million the total tax payments made in all of 2010.” (Dept. of Revenue press release, May, 2, 2011)
  • “The data indicate that counties with 150 or more Marcellus wells experienced an 11.36 percent increase in state sales tax collections between 2007 and 2010.” (Penn State University, February 27, 2011)
  • “In counties with ten or more Marcellus wells, returns reporting royalty income increased 44.1 percent and tax income increased 325.3 percent.” (Penn State University, February 27, 2011)