School budgets hollowed out by dwindling coal reserves
By KRIS B. MAMULA and JESSIE WARDARSKI, Pittsburgh Post-Gazette
Sep. 15, 2018
CARMICHAELS, Pa. (AP) — The fire hall whistle blew in town a few miles away, marking the big moment of the night: the crowning of the 2018 Bituminous Coal Queen at Carmichaels High School.
Craig Baily, retired school superintendent and master of pageant ceremonies, wore a black tuxedo and tails. Teenage girls packing the school auditorium shrieked.
Albert Gallatin High School senior Holly Lesko ("Go Colonials!") crouched slightly in her heels and gown and smiled wide as the crown was placed on her head by Gary Wilson, superintendent of the Cumberland Mine, a coal operation 20 miles from the high school.
The crowning of the queen is a Greene County tradition that started in 1954, a time when bituminous coal fueled an economy — feeding, clothing and schooling generations. But King Coal's grip is slipping.
Bituminous represents 90 percent of all coal burned in the United States, but most of the mines around Carmichaels played out years ago. Two big Greene County mines closed in the past year. Production at a third, Cumberland, has been falling in recent years.
Nowhere has the sting been felt more acutely than at the county's five school districts, where 27 percent of the tax base — $414 million in value — is tied to coal. And that erodes with each chunk torn from the ground.
"It's foolish to think of the coal industry as a source of economic sustainability for any length of time. It's not," said Helen McCracken, superintendent of the Central Greene School District, where the Emerald and 4 West mines are located and where 23 teachers and four classroom aides were furloughed to balance this year's budget.
"In the next few years, three years, this coal's going to be gone from the boundaries of the district. It's a very stressful situation."
While anyone in Pennsylvania can appeal the assessed value of their property with the hope of getting a lower tax bill, Greene County's situation is unusual in that the value of land where coal is mined invariably goes down as the coal is depleted — dragging with it tax revenue for public education.
From 2014 to 2018, the value of the minerals under the 1,700-student Central Greene School District plunged 55 percent — to $63.5 million from $142.4 million as coal reserves dwindled. Between 2017 and 2018, 24 percent of the district's mineral tax base evaporated through mining.
That has meant $2.3 million less to spend than four years ago.
And Central Greene is not alone. Other school districts in the county are hurt by coal's decline, leaving them less money for pencils and paper and teacher salaries.
Greene County has celebrated its storied mining past every year since 1954 with the King Coal Show, which features the crowning of the coal queen, carnival rides and a parade through Carmichaels — population 400 and home of the Sky View drive-in theater where "Jurassic World: Fallen Kingdom" played recently.
Ten high school girls competed for the title Aug. 19, down from as many as 20 contestants in past years.
Fewer contestants doesn't necessarily reflect less pride in the area's coal history, but it may signal an economic shift in the county that can shrink student populations as well as dollars to sponsor contestants.
Coal production has been declining for some time, but the latest sign of trouble came in 2013 with the mothballing of the coal-fired Hatfield's Ferry Power Plant in Greene County.
That was followed in 2015 by Alpha Natural Resources, citing an "unprecedented period of distress," closing its sprawling Emerald Mine, which shadows the county seat of Waynesburg.
Another hit came in June with the closing of the 4 West Mine in Mt. Morris. All together, the closings put nearly 1,000 miners out of work.
From a peak of 3,045 miners in 2012, the number fell 32 percent to 2,069 last year, according to the Pennsylvania Department of Labor and Industry.
Without jobs, some people move away in search of other work. Greene County's population contracted 5 percent to 36,686 in 2017 from 38,770 in 2010.
Enrollment at Central Greene has fallen almost 30 percent since 2000.
In the Jefferson-Morgan School District where the Emerald Mine is located, the assessed underground mineral value fell 41 percent between 2014 and 2018 — to $8 million from $13.6 million, according to the county tax assessor. That translates into $704,000 less to fund the $14 million school budget.
"The way the tax structure is set up, it's an immediate impact on every school district, an immediate impact on education," said Mark Pochron, a Jefferson-Morgan school director for 27 years.
The district has avoided teacher furloughs, making ends meet by steadily raising property taxes and by dipping into a rainy day fund accumulated in the years when mines were humming, Pochron said.
Still, Jefferson-Morgan Superintendent Joseph Orr worries.
"We want to be able to offer the same opportunities to our kids as any other district," he said. "We know that we can't meet all those things because of the size of the district and resources."
School districts elsewhere may have new strip malls and leafy office parks to generate new tax revenue. A natural resource like coal can't be replenished.
First- and fifth-grade students over in the Central Greene district returned to bigger classes this year as the result of staff cuts. A middle school librarian was among the jobs eliminated.
When a land donation means another tax hit
The coal industry has diminished money for schools in Greene County in other ways, too.
In July, Cecil-based Consol Energy Inc. donated 1,536 acres to the Pennsylvania Game Commission. The donation expanded the amount of land managed by the commission within the West Greene School District.
In a show of responsible corporate citizenship, the company backed the donation with a $580,000 stewardship fund for managing the tract — part of which is a habitat for the endangered Indiana bat.
About 30 percent of the 256-square-mile West Greene School District is already classified as state game lands — tax-exempt property reserved for hunting and other outdoor sports.
Consol's donation takes still more land off the tax rolls.
As compensation, the state game commission makes annual payments to host school districts — $1.20 an acre. That's less than West Greene would have received had the land remained taxed, Superintendent Brian Jackson said.
The tax hit to West Greene from Consol's land donation is $30,372, Jackson said. It's not enough to cause teacher layoffs in a district where enrollment has been declining for a decade and its last graduating class was 48 students.
Still, it is another cut in a district that has seen coal depletion trim $453,092 from its tax revenues since 2014.
"As they take it out, it changes the assessed value, so every year or two, the coal mines ask for a reassessment," Jackson said. "When they go through a reassessment, we get new numbers."
A family business taking it hard
Jefferson-Morgan school director Pochron feels the pain of the mining downturn in a personal way, as well. In the early 1980s, he and his three brothers took over the family hardware store, which was started by his father in the early 1950s.
At that time, four active mines nearby drove foot traffic to Dry Tavern Hardware, which had an expanding line of lawn and garden supplies, hunting rifles and plumbing parts.
At one time, the store employed 20 people.
There are just four clerks today and store shelves are emptying.
"We always knew coal revenue would come to an end," he said. "The problem was we weren't counting on it coming this quickly."
Carmichaels residents Linda and Brice Rush are keepers of Greene County's coal mining legacy in a reconstructed log house near their home. The log house is crowded with historic United Mine Workers magazines, miners' tool belts and other industry artifacts.
"It's important for me, my ancestors, to tell their story," said Mr. Rush, 73, who has been treasurer of the King Coal Association for 36 years.
His wife is quick to defend the mineral that made America into an industrial giant, but has been targeted by critics for its environmental impact.
"Kids went to college and got all kinds of jobs because their dads went in the coal mines," said Ms. Rush, 71. "Coal is not the only pollution. You have forest fires, you have volcanoes."
The 'perfect power plant'
John Brodak, who owns a grocery store and other small businesses in Carmichaels, is wistful about Hatfield's Ferry, which he calls the "perfect power plant" because of its proximity to the Monongahela River and the ease of coal delivery.
Like others here, he blames former President Barack Obama's efforts to reduce greenhouse gas emissions for the plant's shutdown. "What Obama did about this coal was really bad," said Brodak, 79. "It's heartbreaking."
Jackson, superintendent of the West Greene district, is part of a group of people who have been meeting monthly to discuss the county's economic future.
A number of options are on the table, he said.
"We're trying to get some kind of perspective for next year, to establish some kind of economic growth here in Greene County," he said.
Coal comprises just 0.05 percent of the total property valuation in the Carmichaels Area School District, where many mines played out years ago.
The town is moving away from a coal economy in a variety of ways. AgriMed Industries of PA LLC, for example, plans to grow marijuana for medical purposes on a 61-acre plot in Cumberland Township, which is part of the Carmichaels School District. The operation will employ 62 people.
"I don't have a crystal ball, but we took our hit on taking the coal money. Based on history, we're going to survive."
Also, Don Chappel, executive director of Greene County Industrial Developments Inc., said three companies in a 72-acre Cumberland Township industrial park have expanded in recent years.
Carmichaels' experience could offer a path forward for school systems like Central Greene, said Baily, 67, the master of ceremonies at the coal queen pageant.
"Everybody around us was losing enrollment, but Carmichaels was stable," he said. No tax increase was needed to balance this year's budget.
Baily, himself a local success story, started driving a school bus at Carmichaels after college before getting hired as a music teacher and then becoming the school superintendent.
"I don't have a crystal ball, but we took our hit on taking the coal money. Based on history, we're going to survive."
Tapping into gas, but seeing life in coal
Other signs suggest things may be looking up. Two natural gas-fired power plants are planned near Carmichaels, including one at the Hatfield's Ferry plant, and a DQ Grill & Chill just opened along the main drag in town.
Last year, 158 shale gas wells were sunk in Greene County, a three year high, according to data collected by the Pennsylvania Department of Environmental Protection, even though impact fees mainly benefit the municipalities that host the wells and gas production doesn't employ as many people as coal mines.
Coal mining could hang in for a long time — though perhaps not at the levels of the the early 1950s when the first coal queen was crowned in Carmichaels.
More than half of Pennsylvania's coal production came from Greene County in 2016, the latest data available from the Energy Information Administration. No other county even comes close.
The Pennsylvania Mining Complex, comprising three mines in Washington and Greene counties, has coal reserves that could last nearly 40 years at current production levels, according to mine owners Consol Energy Inc.
It is North America's largest underground coal mine complex.
Using efficient longwall mining techniques, the Bailey complex is extracting coal from 2,000 acres annually, said Jeffrey Kern, president of mineral appraiser Resource Technologies Corp., a State College outfit that sets the value of unmined coal in Greene County for tax purposes.
Bailey coal fires domestic power generating plants and it's also shipped to Europe, Asia, South America and Africa, according to Consol. The company anticipates removing 27 million tons of coal from the ground this year.
Of course, market forces are dimming coal's long-term prospects as cleaner burning natural gas has become a preferred fuel. Nationally, the demand for coal peaked in 2008 at 1.2 billion tons, while demand was projected to flatten for the next several decades as coal-fired power plants are retired, according to the U.S. Energy Information Administration.
Riding the energy horse
Still, Greene County's future is solidly aligned with coal and natural gas, said Robbie Matesic, executive director of the Greene County Department of Economic Development.
"We're going to ride the energy horse," she said. "It's the workhorse of the economy here. We are coal, and we are proud that coal built America."
As coal queen, Holly Lesko will meet Gov. Tom Wolf and address the state Senate. Money raised from the festival is distributed among the Carmichaels Area Chamber of Commerce, Lions Club and Carmichaels & Cumberland Township Volunteer Fire Co.
Holly, who turns 18 in September and wants to audition for the Radio City Rockettes in New York City, said the judges had one question for her during the personal interview segment of the pageant: What kind of coal would you like to know more about?
"Bituminous," she answered.
Information from: Pittsburgh Post-Gazette, http://www.post-gazette.com