Brown Town 2.0

Missed this in what is now last week's (October 22-28) edition of the Economist magazine.  See the article: Smaller is more beautiful, subtitled Many other cities are battling problems almost as acute as Detroit’s.

If you are waiting for a smackdown on Steeltown, you will be left hanging.  The quotes about Pittsburgh just start with this accolade:

Pittsburgh is often pointed to as a model for other shrinking cities. Its revival since its steel industry collapsed in the early 1980s is partly thanks to good long-term planning. Under the leadership of Tom Murphy, a three-term mayor, more than 1,000 acres of abandoned, blighted industrial land in Pittsburgh was cleaned up and is now thriving commercial, retail, residential and public space. Once lined with factories the city’s waterfront has been given over to parks. Mr Murphy oversaw the development of more than 25 miles of new trails alongside the river and urban green space. He helped develop public-private partnerships which leveraged $4.8 billion in economic development.

It even ends on this note:

Pittsburgh, for instance, reinvented itself as a successful tech and health hub, even as its population continues to fall. As Aristotle put it, “a great city should not be confounded with a populous one.”

Which I guess makes Pittsburgh akin to the æther.  In modern times it all seems to flow though.  The Economist has had a positive beat on Pittsburgh before most anyone else from the outside word. Remember:  How Now Brown Town?

Reading isn't Understanding

So I finally got around to asking myself what the details are on the library tax referendum that will be on the ballot in the City of Pittsburgh in just more than a week.  I wanted to start with what the actual wording was of the referendum itself.  It is suprisingly hard to find.  Nothing on the Allegheny County elections web site as best I could find.  Likewise, the City of Pittsburgh's web site was not helpful.  If either had something it was not very obvious.

So of course I then ask Ms. Google and the first search hit I get, which seemed to be directly on subject was this:

http://carnegielibrary.us/

Which I then started reading and was reinforced in my web wandering that it was all about the referendum coming up.  I started to get a bit annoyed even, it sure seemed to be saying all sorts of things that were not made known in an news on the topic thus far. Turns out, of course it was saying things not relevant to the news today.  The site is about a referendum.. or a proposed referendum some years ago.  I can't quite tell the date from any of the content there.  I don't quite recall any such referendum making it on the ballot.  Did it?   Nice snag of the domain though.  I know the library's budget is tight, but it was probably worth a few dollars to register a few of those ancillary domain names sometime along the way. 

So the more relevant web site for the folks pushing a 'yes' on the referendum is this:

http://www.ourlibraryourfuture.org/

Still, on that site nor anywhere else I still can't find the actual specific wording of the referendum itself.  Yes, there are folks I know who clearly know and I could probably get it from them directly.. but still you think it would be more easily available to people since I guarantee the vast majority of folks showing up at the polls will not even know about any referendum.. just as they won't know the name of a single judge on the ballot in judicial elections.

But the news coverage is pretty clear.  The referendum is ammending in some form the Pittsbrugh City Home Rule Charter saying a 0.25mil increase in city of Pittsburgh property tax rate will generate money earmarked for the Carnegie Library in the City of Pittsburgh.   The news accounts have varied on what they say it will generage in cash for the library.  Most amounts hover around $3.5 mil.. I've see some say $3.25 mil annually.   I think all those numbers are high.

I used to work at the Congressional Budget Office and scoring tax proposals was a routine project.  We will skip what the tax elasticity is on say residential migration decisions, though I think that is still a big issue for the City in general.   Here is a more basic ratio analysis.

Current city property tax rate:  10.8 mills.    Proposed .25 increment is  2.3% of an increase. 

Current city of Pittsburgh property tax revenues have been very stable over the last decade at between 124-127 million annually with no obvious trend up or down.  There are collections of past revenue accounts which the new tax will not apply to at first, but in a long run steady state they should be added in. That averages to an addtional $2-$7 a year, but an aveage of under $4mil  Total average real estate tax revenues for the city are pretty stable at just under $130 mil a year.

So, 2.3% of $130 mil is  $3 million annually. Not quite sure why you would think it would bring in more.  It is just a simple ratio analysis I know, but any adjustments as we would do at CBO for say tax elasticity would only be downward.  I'll get into the issue of the impending reassessment in a minute.

As for who will be paying the tax, as I noted before, there is a huge variation in property tax revenue collection across city neighborhoods.  Whole neighborhoods are tax delinquent to a degree some bills will never be paid, and the range of property values is quite extraordinary. 

I am a bit curious about how the legalities will work with regard to the reassessment and this referendum.  The timing of the referendum exactly on top of the reassessment is going to be confusing to some.. likely including those who send out tax bills.  There is going to have to be a resetting of all property tax rates in the county in order to comply with state revenue neutrality rules that apply specifically to mass reassessments.   What is the baseline as it applies to this referendum?   If the new assessment values go into effect a day before the new tax rate becomes effective, maybe it does not need to be reset and it winds up bringing in a lot more money since by all accounts the nominal value of city property will be going up a lot on aggregate.  Or is it the other way around and the referedum millage needs to be reset the moment it goes into effect?   It just seems this is something someone must have thought of given that the reassessment train has been going a lot longer than this referendum has been in the works.  At issue is going to be a million dollars a year give or take.  I see no mention of the issue in the coverage.  Maybe it's all clear to someone how it will work and I am making this all up?

So I am not sure how it all works out.  Note the City of Pittsburgh budget projections show an increase in property tax revenues over the next 5 years. The thing is that the city's projections have always shown that increase coming in upcoming years.. yet it never comes. The original Act 47 plan projections for the city all presumed successive and perpetual 10% jumps in the city's property tax revenues with the really funny notion that that was how the budget would be balanced in the long run.   It keeps being put in there I think because it makes us feel better about what the future budget problems will be in the city.  With the base year assessment and unchanging property tax rates there has not been a lot of potential for any meaningful increase.  With a new assessment, laws effectively requiring revenue neutrality will limit any increase as well.    With continuing population loss in the city, especially household population loss, there isn't a lot of potential for property tax revenue to increase any time soon.  Might be a bump if someone really makes any progress changing the laws that let most large commercial property transactions escape from paying any transfer taxes.. but that is likely as dead a subject as it has been when broached in past years and decades.

Pittsburgh is as Pittsburgh Works

I recently brought up the location quotient methodology and looked at what some location quotients were for Pittsburgh.  You can use the LQ methodology in lots of ways.  You most often see it used to measure industry concentration, but no reason it can be used to measure occupation concentration as well. For both LQ's are typically benchmarked against the nation, but could be used lots of different ways. Again, a LQ of 1.0 means that the concentration of something locally is the same as for the nation.  A LQ of 2.0 would mean we are twice as conentrated as the nation.

So I was just looking at some occupational employment numbers for Pittsburgh and see that the BLS is now doing what a lot of us used to have to calculate on our own and has an occupational employment LQ for most all occupations they report data on at the MSA level. 

The obvious question is what occupations have the highest LQ's here in Pittsburgh.  For years I used to say that it was in Nuclear Engineers where in the past I had calculated an unbelievable LQ of over 8.0.   Here is what I get now for the top LQ's by occupation in Pittsburgh:

So Nuclear Engineers are not number 1 technically any longer. Not because of any slowdown at Westinghouse of course, but I think over the last decade there has been a drawdown in the workforce at Bettis which is really what is driving that number. Still a lot of nuclear engineers, possibly the largest absolute numbers in any MSA for the nation, just a slip in the local concentration.

Still a lot of interesting factoids popping out of that one graphic.  I think my colleagues may be single handedly responsible for the high LQ for "Survey Researchers".    The "Private Detectives and investigators" I was going to say I have no idea about, but I think its the OPM contractors who do work for DoD out of Butler County are impacting that.   Still you see the core steel occupations in there including "Metal Pourers and Casters".   Pittsburgh as sports town results in our overconcentration of "Locker room, coatroom and dressing room assistants".    Finally...   at the bottom, but "Title examiners, abstractors and searchers".  Our big Marcellus Shale impact?   A few other occupations might be Marcellus induced as well: wellhead pumpers?   Mining still having an impact, but remember this still is coal country and I bet some of those occupational numbers are being driven by NETL. 

Move along now...

We will take a break this morning because if you have not been paying attention the tree must be shaking and two Burghosphere senior citizens (in Blog-years that is) have all of a sudden been blogging up a storm this week.  Check out:

http://angrydrunkbureaucrat.blogspot.com/

and

http://pittsblog.blogspot.com/


How long it will last for either of them... 

Speaking of redistricting

So here is a thought.  If someone out there had the time and resources to download the open source code available here:  http://www.publicmapping.org/, and set up a server for it, I will do my bit and populate the data and shapefiles necessary to make it work for public source redistricting of Pittsburgh City Council, School District and Allegheny County Council.   

Likely the timing is too late to something similar for the redistricting processes of either state legislative districts, or for the US Congresssional redistricting process, both of which are moving rapidly toward completion.  But we could have some fun with the local map-making that is just starting up

Just a thought. 

Redistricting Data

People have been asking me for this so I might as well just put it up for all.  In general you can get the 2010 Redistricting data from the census yourself, but the census folks don't make it very easy these days.  Below are some links to data files with extracts for the city and county demographic data by voting district.  Basically the fodder for all the redistricing to come.

• Extract of Allegheny County voting district demographics for 2010 in Excel online here 

• Summary of those same 2010 demographics just for city of Pittsburgh voting districts matched to the file I have online of historic city of Pittsburgh election returns for selected races back to 1999. Again in Excel:  Online here.

Use. Enjoy. Wonk.

 

Postscript for the uber wonks out there.  In recent previous decades the Pennsylvania Legislative Reapportionment Commission (PLRC) would actually rework the census data before it was reissued for use in Pennsylvania redistricting.  The reason that was said to be necessary came from deficiencies in the geography of voting district data as was compiled by the census compared to the actual patterns of voter registriation as administered by counties.  Over the last decade the Census contracted a major reworking of all the boundaries of geographies within the state which apparently were very screwed up for Pennsylvania.  That rework supposedly minimized or eliminated the need for adjustments by the PLRC. I say supposedly only because I have not looked in detail at the changes made.  So the data for 2010 in the extracts above is straight from the Census and is not PLRC adjusted data.

  

Fac(k)toids under every rock

So I will be the first to say this is likely a sample artifact, possibly impacted by seasonal effects and otherwise not something big enough you ever want to infer a trend from..

but.......

It is hard not to note that with September 2011 data just out, private nonfarm jobs for the mining and logging industries for the Pittsburgh MSA ticked downward for the first time in 31 months.  Up over the year of course, in absolute and much larger percentage terms. 


Still.. and even given the caveats above.. how is that possible?  Maybe it is like that multi-stage rocket where there still is a moment of deceleration as the stages separate?  Yeah, that's it.  I gotta go into PR.


Speaking of Marcellus Shale (explicit mention for the trolls and search engines), see also today the PBT jests about the increasing role of women in Marcellus related employment.  I guess we will have to wait to see any such trend be even hinted at in actual data.

Ghosts of Henry George

So it's not quite the same thing, but I note today's news that Bill P. is promoting a new form of tax abatement on commerical and industrial development in the city of Pittsburgh if the news account has that right.

Is the goal to encourage more industry in Pittsburgh (the city proper) or to encourage more people to live in the city?  Is the city losing residents or jobs?

I just bring that up because I once made the case for a more complete tax abatement on Pittsburgh residential investment.

Two weeks out and a world away

Judging from the non-stop political commericals on TV and the blanket coverage in the papers, there must be an election coming up. Wait... the tv screen is fading to static.. I think I was catching signals delayed a couple years by bouncing back off of Pluto.




Who will show up for the election now indeed two weeks out?  Allegheny County Executive is a hard race to predict turnout wise since there has not been a lot of history for the office.  Created not so long ago there has only been 3 general elections for the position, the first one was obviously unique at the time, and the last one of those was an uncontested re-election. Not much to infer a pattern from.

Generally speaking, county-wide elections in Allegheny County vary a lot in who casts a ballot.  Some elections are big draws, others are not.  In recent memory the most votes cast across the county was over 658K votes cast in the presidential general election of 2008.   Excluding judicial elections the lowest was likely the 209K or so votes cast for County Sheriff in 2005.  For the 3 general elections for Allegheny County Executive, you get this.

What to expect this time??   It isn't a relection and it is notionally a contested race.. so would you expect the low result from 4 years ago?  You think not, yet there is so little draw this cycle that you have to wonder a bit. 

It you take 2007 as a starting point, 219K  votes were cast for Allegheny County Executive.  Might be our over/under going in.  Yet in 2007 there were 259K who showed up to vote and cast a ballot.  So some latent anti incumbent vote.  Dan Onorato was unopposed in the election with the Republican Party running nobody at all for the office.  So 40K nonvotes out there.   It works out that that year 29% of the registered voters in the county showed up to vote which then makes it 24% who chose to vote for County Executive.  

So for me it is a toss up as to what the turnout will be this year.  A contested election vice a uncontested reelection for county executive should push up the turnout a bit, yet I just don't feel any interest in the race at all from either party.  Whether because it has a forgone conclusion or other distractions I can't say.   So lets say it balances out and we get pretty much what we got in 2007 with a 29% turnout.   There will be more more than one candidate on the ballot so you would expect fewer nonvotes in the executive race.  I'll parse and say some sheer demographic effects (a few less supervoters aging out) will put us at 26% turnout and maybe 240K votes cast race for chief executive. Any further parsing will depend on the weather that day and if some unanticpated criminal indictment lands on either candidate in the next few days.   

As for who will win.  Well. Likely there will be 20-30% straight ticket Democratic Party votes.  So to counter that someone would need what?? 62-72% of everyone else? I'm not sure David Lawrence pulled those margins in general.   Those who like to refer back to the 1999 race where Jim Roddey beat Cyril Wecht tend to completely ignore the real political dynamic at the time.  Most ignore, forget, or just don't know the political infighting in the Democratic Party over the previous decades that lead up to the result that the the Democratic nominee Wecht lost to Republican nominee Roddey.  There was this historic ax to grind on both sides from a segments of the party loyal to former and late Mayor Caligiuri and the ubiquitous and former County Democratic Party chariman Wecht.  The result was that Roddey got this huge chunk of clearly anti-Wecht Democrats that more than turned the race which was decided 49.4% to 50.6%. 

Some also point to the lingering impact of the primary that year where it is said Mike Dawida alienated a large part of African American voters.  While there might.. just might, have been a turnout impact that impacted the numbers. It was not a huge impact no matter and it certainly isn't true that of those African Americans who came out that very many voted for Jim Roddey.  He got about 2.5% of the African American vote that year.  That history comes up on occassion and folks really will dispute that last factoid.. some myth out there that Roddey had a big chunk of support in minority districts.  I just don't see it at all.. there just isn't anything to even argue over in the numbers, but still people will believe what they believe.

4 years later was the most telling since without the Cyril Wecht in the race, the fissures within the Democratic party were not there and Jim Roddey lost by 58-42. Some will quibble over the role of reassessments in that fight, but I think they overinterpret given the more fundamental history of what happened in 1999.  Reassessment issues likely didn't help Jim Roddey mind you.. but absent that he was a pretty popular guy in lots of ways with some crossover support in general.  I actually think that crossover support is the only thing that kept Roddey that close.

Nonetheless, it is hard to see any analogies in any of that history to the election in two weeks.  I recently quizzed a friend if they were aware of this race for County Executive.  They did know there was an election coming up.  I was curious if they could identify the candidates.  They could... kind of.  It was the Indian guy vs. the fellow with all the kids.  The names were not on the tip of their tongues.   I didn't press, but it is funny to think about that if that is how the candidates are known, who would you guess is the D and who is the R?

Speaking of Duquesne

So I harshed on the Trib story on Braddock yesterday.  Coincidence a bit, but I just was checking this PG story from earlier this month on the general topic of Mon Valley real estate and the semi-obligatory focus on Braddock.  I was starting to look at the first inset graphic where it gives the notional taxes on a $100K property in Braddock and thinking that was just a silly benchmark for a place that likely has no $100K residential properties... and if it does, it clearly won't after the reassessment gets completed.  Knock on wood.  (hey was there a status conference last week?)

But at the bottom a graphic they have this summary of data for each municpality.  How bad are things in Duquesne.. or how forgotten is it? What is missing in their list?  The data is there, but nobody at all noticed something was missing from only the 2nd blurb of data. I'm pretty sure the list was alphabetical.  It's a metaphor unto itself. 

Frequency hopping

Warning..  more random than normal bit of Briem stream of consciousness follows. Waste time reading at your peril.

I remember watching last weeks Steelers game and seeing them cut to Polamalu talking on the cell phone and immediately thinking that was not a good thing to show.. Indeed the use of cell phones is not permitted on the sidelines.  Bad Troy.. Bad Troy. Was it some secret conversation with a consultant far away?  I really thought he looked like he was calling his wife.. and he was!  Yet it may have something to do with the game coming up against New England as well.

What the fine handed down to Troy reminded me of is frequency-gate, as was alleged against Bill Belichick a few years ago. .  I could not find any significant updates on it all.  Others like me are a bit perplexed of the lack of public follow up by the NFL specific to what the allegations really were.. and what the resolution was. I still really wonder what the initial thought was behind the accusation of improper use of frequencies.  That was far more interesting that some possible improper videotaping which I think is most of what was talked about in the open. 

So if you see one of these mounted on a pickup or something in the next week, call Roger Goodell..  or ProPublica I guess. If it also has Mass. plates..  call me! and we will get a picture first.  Think I am being paranoid?  You really have to wonder what that thing is mounted on top of the science center.. just feet from Heinz Field?  If it is not collecting some sort of signal, then it is scooping up intergalactic krill somehow.  

What this all probably is coming from in my head is that when I was living in DC, one year the house some roommates and I were renting was in the literal line of sight straight line between the Soviet embassy that never opened up and the White house.   My bedroom window gave a clear view of one of the more impressive arrays of antennae I've ever seen.

Decline Denial Duquesne

In the 1980's it was Homestead that staked out the emotional heart of the Rust Belt miasma.  Outside of Detroit in recent years Braddock has cornered the PR market for as Jim R. would put it: "Rust Belt Porn".   Yet then and now the city of Duquesne has declined as much and suffered as much, just with much less notice.

So now the news comes with the outcome both inconceivable and inevitable that the state is likely to shut down the Duquesne school system completely.   The city's school district has already abdicated secondary education with its high school students shipped to nearby West Mifflin or East Allegheny. This is all more epilogue than news sadly.  Still feels like a story from the worse off parts of the third world. In security studies if you anonymized the name it would in part be indisinguishable from case studies in failed states and feral cities. 

and by the way, the zip code for Duquesne, 15110, has the single lowest reported taxable income of any zip code in Pennsylvania.  The single lowest.

But that news story highlights again how little we understand our own problems.. how myth overtakes reality.  The section and quotes that caught my attention was the almost de rigueur logic on the impact of the steel industry. It goes by formula exactly like this:

Chepanoske points not to any person or government entity but to the loss of jobs and subsequent sharp population decline.

Census figures show Duquesne was home to 11,410 people in the 1970s when steel mills provided good-paying jobs. Today 5,565 people live there.

"When the mills were running full blast, things were really good," Chepanoske said. "It started to deteriorate in the 1980s when people moved away."

In other words.. it's nobody's fault.  Steel left.  Blame 'steel'.  Whatever that means.  That seminal year 1970 is the only horizon that matters it seems.

Did the decline of manufacturing cause Duquesne's decline? Did it accelerate the population decline even?  When was the last time things were really 'good' in Duquesne?  Here is the city's population over the century.  Can you identify any meaningful break in trend in the 1980s?  But if the problems are caused by the loss of steel jobs, and the decline in steel jobs are somehow beyond our control, then ergo..  this just isn't anyone's fault. 

Is Duquesne's plight unconnected to manufacturing? Of course not.  But the heyday of Duquesne came long ago at this point.  The workers in the mills along the rivers started abandoning those towns long before there was any conception steel was ever going away. The first hand memories people have of a growing or even stable Duquesne can only be among those receiving Social Security.  If we misunderstand our problems we can't ever fix them and attributing the plight of many of the barely existing. 

I have not even gotten into the joke that Duquesne with barely 5K population in 2010 is still a 'City' according to the laws of Pennsylvania.  Upper Darby Township in Delaware County, PA clocked in at over 82K residents in 2010. Makes sense somehow.  Goes back to what the real problems are in Pennsylvania.   Saddest part of the Duquesne story is that they just didn't have any large bond payments to default upon.  If only they had been so irresponsible as to build a garbage incinerator, the Commonwealth apparachiki might have paid some real heed.


If you want to obsess on on the stylized Duquesne history, don't recereate the wheel.  Just jump over to DuquesneHunky. It would do the neighboring Tube City Almanac proud.  I actually can't believe its author is not Jason's alter ego.

Splish Splash.....

Can my lawyer friends confirm or refute that his honor Judge Wettick has never been turned over on appeal?

Trib:  Court agrees Pittsburgh water line program violates state law .  I wonder what this bodes for ULS's claim against the PWSA for a few $million??  More to follow. 

The actual ruling (opinion?) from Commonwealth Court concludes with:

In its opinion, the trial court thoroughly and correctly analyzed these issues. Accordingly, we affirm the trial court’s April 6, 2011, order and adopt the well-reasoned opinion of Judge R. Stanton Wettick, Jr.

Maybe the title of the post should have been: the Stantonator Strikes Again.

With or without the 'h'

or if I had seen this, I would have just used it today..... 

Just out from Stateline.org: Pittsburgh and Harrisburg: A tale of two deep-in-debt cities

I still have not had a chance to update much of it with the 2011 data, but on that we will gratuitously relink my iPension page with all the numbers you can ever really use on the city's pension funding... or it would if I had time to update it. Also gratuitous, but don't you long for the days when the pension fund was not a problem and fully on track to becoming fully funded. 

and speaking of Downtown Pittsburgh..  just caught this in the news from New Mexico: Former Pittsburgh mayor urges innovation and risk.  There is a quote near the end that is...  well it is.

Prologue is Past

No question today. Just not in me. 

So here is a great map from the past.  What this really has me thinking is that in the past there must have been a lot more people in town trying to do what we do.  Not quite sure what that means. A great graphic here.  From 1943, no scripts making those inset graphs mind you.

Image Source

Question #2 - Public Transit

Question #2 for the candidates for Allegheny County Executive:

As one of you enters office, and if you are re-elected in 2015, it is possible you will be in office 8 years from today.  Will there be a public transit system in Allegheny County in 2019?

and the one in the middle drives a..... bus?

So I thought I would play the tree falling in the forest and ask the questions I would pose to the candidates for Allegheny County Executive. Not that I expect these questions to be asked, nor any reply given... but we will fire them off into the ether. It's not that there aren't enough forums where the public can hear from each of the two major candidates.  I hear that at one county executive forum in the Hill District only ONE person showed up to watch. That is a sad commentary unto itself, but far worse when you look at what we have been in the news for lately. 

Maybe we will make this a series, so we will call this question #1:

Last Sunday, the New York Times reported from Pittsburgh on the disparity in infant mortality locally:

In Pittsburgh, where the unemployment rate is well below the national average, the infant mortality rate for black residents of Allegheny County was 20.7 in 2009, a slight decrease from 21 in 2000 but still worse than the rates in China or Mexico. In the same period the rate among whites in the county decreased to 4 from 5.6 — well below the national average, according to state statistics.

Further it reported that:

While Pittsburgh’s struggles are illustrative of problems in other cities, it also faces its own particular issues, including the county’s privatization of many of its health care services over the years.

The question for each of the candidates is:

What is the county's role in addressing the disparity in infant mortality here in Allegheny County and what, if anything, will change in your administration with regards to the role of the Allegheny County Health Department?

Sic Semper Blogger

I just want to point out that we were a bit ahead of the curve here in noticing the impacts of bloggers around the world. 

OK, not really ahead of the curve but check out the same fellow as referenced in that post...  It looks like Sandmonkey is now running for parliment in Egypt.

Hmmm... a harbinger of Bram for council?

Protest what?

I have looked at this a lot, but never had a reason for posting about it.  So now I note Bram passed on the image that highlights the conundrum going on Downtown and elsewhere as folks struggle to figure out where to focus their anger. It reminded me of  what may be the ultimate financial infographic of all time. See below.

Not new, this has been floating around for quite some time at this point.  I believe this is the original source, but it is hard to tell given how much the image has been passed around.  This is the reverse engineering one couple did of what happened to a single mortgage as it went from the signing of their promissory note and down into the rabbit hole known as the financial markets.  I keep trying, and failing, to find George Bailey in there somewhere.  As much as the name and cartoons are far more accessible to the general public, this is a far more accurate representation of what is otherwise known as Toxie in other circumstances (I have no reason to think Dan and Teri are themselves anything other than good credit risks). 

So let's say you were angry over the foreclosure crisis.. where in this diagram is the center of gravity that you would vent your anger at? 

Lots of Ghosts Around

Sometimes headlines drive me nuts.  Note the PG story today: Is Downtown Becoming a Ghost Town?. Great illustration of Grants though.. I just barely remember Grants.  Let's all angst over why Grants went out of business.

(update... did they change the wording of the headline online? It started online and in print as this, now online it is this? The two versions would seem to go with different stories?)

but really. A Ghost Town?   About as crowded as a George Romero film then I guess.  Cue Seth and Andy please. 


So what is one of the densest concentrations of jobs in the US is somehow a 'Ghost Town'.  Imagine what the fellow who is touting a Marcellus Shale inspired construction boom Downtown must be thinking?  Is it a Marcellus Shale inspired ghost town?

They both are terribly confused.  I said it before, and I'll say it again.  Is Downtown Dead? Hardly.   That whole oped was inspired over all the overwrought angsting that Lazarus was departing Downtown after what was really a very short and mostly TIF-induced stay. What it said about the core issues Downtown I still do not know.  Downtown Pittsburgh has about as steady an employment count over the last half century as most anywhere in the nation.  Not just a few jobs, but downtown proper hovers at 100K employees today as it it did a decade ago and as it did a half century ago.  All in the CBD of a city that has lost half its population in the last 50 years and almost 9% in just the last decade alone.  It is a remarkable story for the region.

Clearly there are also more non-institutionalized residents (i.e. not in the jail) than at any time since after WWII.  Add in the fact that from either, actually both, employment and residential perspecives, nearly all the immediate environs of Downtown are doing better than they did decades ago.  The North Shore, which in a sense didn't even exist decades ago, the Strip District, at least the Crawford Square edge of the Hill District, even Uptown all have spillovers from what is going on Downtown. I don't want to forget even the pretty remarkable growth and focused planning by Point Park which is on its own transforming a chunk of Downtown as well.  The great mystery here is not why things are empty, but why so many jobs actually remain so sticky in what is a very crowded area with the highest parking costs in the region.

Not to say there has not been a construction boom on top of all of that.  The Downtown jobs space has been transformed by not one, but two large bank operations centers built in the not too distant past. One of the first new skyscrapers in years has opened with another on the way. I mean, people are fighting to redevelop parking lots on the North Shore even? Not Downtown I will say in true parochialness...  but not much more than a first down away from Downtown proper. 

Ghost town...  because Saks is closing?  One restaurant is reorganizing because it's upstairs tenant left? (you have to wonder how much reinvestment they made in those upper floors in recent years?)  An aluminum infused building isn't quite up to spec for modern demand? 

OK... in all seriousness.  The article today misses the real story, but so does everyone else to a degree.   There is this thing called displacement.  Is there some vast failure Downtown?  Everything can be improved, but from sheer investment or activity Downtown is not lacking.  Yet the story exists and vacancies are there and some of them  don't seem to be finding new uses anytime soon.  So what gives? On that note can we please,   please, stop referring to it as the former Lord and Taylor buiding.  Lord and Taylor was a brief brief epilogue for the building.  The building was known for most of its existance as the Mellon National Bank Building and was essentially vacant before Lord and Taylor showed up; displaced by a past round of new construction in old Pittsburgh's Downtown.  Sometimes I think we just confuse ourselves.

To a big degree, Downtown is a victim of it's own success and it is really important to not confuse cause and effect.  The aforementioned construction over the last deade has been in many ways vertical growth.  Downtown Pittsburgh remains one of the more vertical cities around.    The 100K jobs number is impressive, but it probably isn't growing.  I'm not so sure Downtown can really support much more than 100K jobs.. especially not with so many public transit routes being cut and only limited growth in parking supply.   So fixed jobs and a lot of new vertical space?  You get where this is going.

Which all gets to the real point.  Building without a plan has consequences.  Investment is good, but don't confuse the secondary impacts of new construction as unconnected.  We clearly have a lot of very old, and sub-market office supply Downtown.  Is it that hard to see how part of the market is going to be under ever more presure if new construction keeps opening up?  You need to have a plan, and you need to actually use it for the properties left behind or else the result is in part what you see popping up in that story. 

Daily Ranking - Working Mothers

Where forth art thou Malcolm?  Forbes: The Best Cities For Working Mothers 2011

The Harrisburg Miasma = Pennsylvania's Miasma

The thing that gets me about the fiscal mess in Harrisburg these days.  The city is so broke it is seeking bankruptcy. Even if that does not go forward, why are they in this situation?  Is the city itself that mismanaged?  Even if you want to think so, the actual fiscal miasma they are dealing with is from a debt owed by something called the "Harrisburg Authority" for building of all things a garbage incinerator.  The full story was written up by the Patriot News earlier in the year.

The real story here, IMHO, is not really about anything specific to Harrisburg, but what this all says about public governance in Pennsylvania.  How many folks really paid attention to whatever public debate there was over the garbage incinerator that has created their current predicament?   All the public authorities and special districts in Pennsylvania create an impossible to decipher mosiac of governance that leads to these problems.   Pennsylvania is by far the most fragmented state in the nation when it comes to local governance.  Most focus on municipalities when they think about that, but it goes far beyond boroughs and townships and cities...  few people really think about the secondary costs of all the 'other' governments we have out there.   Why is there a generic "Harrisburg Authority" in existance if not to obscure the public governance.  There is even an Equipment Leasing Authority here in the City of Pittsburgh that is nominally an independent public authority according to the laws of Pennsylvania.

How bad is it? A version of a graphic I made in the past is below.. when you lay out all the official and distinct governments in Pennsylvania this is what you get. Each government is scaled by the number of employees it has. You never know what will jump up and bite you. Somewhere in there is the "Harrisburg Authority".  From obscurity to what is becoming national news and beyond.

Health Insurance

Some new data out on Small Area Health Insurance Estimates from the census folks. 

They have a tool there you can use to look this up yourself, but what I get is that for children (age 18 and under) in Pennsylania, Allegheny County is tied with Montgomery for the lowest percentage without health insurance at 3.9%.  The highest: 10% in Lancaster County.  Data is for 2009.

I'm just guessing that 3.0% must be one of the lowest rates in the nation, especially for an urban core county. 

Update:  So I worked it out.  Of the 50 largest counties in the US in 2009, the lowest rate of uninsured children is in Honolulu, Hawaii at 1.4%.  I speculate the reason was a universal health care program for children that according to news accounts was ended right after this 2009 data would have captured the impact of the program.  After Honolulu, Allegheny County's 3.9% is tied for 2nd place with DuPage County, IL which is the 23rd wealthiest county in the nation.  So take out Honolulu next year and we might have the lowest rate. The highest uninsured rate for children on that list: Dallas County, Texas at 21.6%.  I think we have a visitor today btw.

Manufacturing Metrics

I am a bit fascinated that a Republican presidential candidate could, or would want to, visit a steel plant in Western PA as Governor Perry is doing tomorrow.  Again, it has been a long time since the early 1980's when I suspect such a visit would not have been a positive photo op.  Also...  maybe manufacturing is coming back is a theme you hear a lot. On that NPR today has this: Gas Drilling Boom Brings New Life To Steel Industry.

Which together got me thinking.  A basic metric we teach for how concentrated an industry is in a region is a Location Quotient.  Check the link if you want the long explanation, but the LQ is a measure that is more than 1.0 for an industry if it has a higher concentration than the national average.  Less concentration than average you get a number less than 1.0. You compute a LQ for distinct industries or occupations typically. LQ analysis has been around a long time, but it is not far removed from the more in vogue of late 'cluster analysis' the EDA director mentioned in his oped the other day. Old is new again....  except for Pittsburgh it seems.

Suffice it to say that for most of its history, Pittsburgh has had a LQ for manufacturing industries higher than 1.0.  Far higher than 1.0 actually.  For specific industies such as steel far far higher than 1.0.  So I just calculated the current LQ for manufacturing in Pittsburgh and it works out like this with employment numbers in thousands:

So not only are we not the manufacturing region we once were... the most recent data shows we have a LQ less than 1.0!  I know that's an esoteric stat for most, but it really is deeply telling factoid. When I calculated this for 2007, not that long ago, we were at least at parity with the US with a manufacturing LQ exactly 1.0.  It's not that manufacturing has declined nationally, but Pittsburgh's relative concentration of manufacturing employment has continued to decline to the point where we are now well below average. So if it is coming back for Pittsburgh, it has quite a ways to go.  While the NPR article points out some of positive points in local manufacturing industries, there are at the same time continuing hits that net out a lot of the impact.

To bankrupt or not to bankrupt

The news is that Harrisburg has filed for bankruptcy.  While technically true that they have filed for bankruptcy, this may be shot down before it all begins.  The funniest part of this at the moment is that all the judges for this are in Tampa for a conference.  So hold your breath.

Remember, bankruptcy has not been far below the horizon here in the past.  The closest the city of Pittsburgh should have come to bankruptcy was in the early 1990's just as Tom Murphy became mayor.  Yet the history is that the City of Bridgeport, CT had just before that time tried to file bankruptcy but was denied by a federal court to even enter bankruptcy.  Municipal (Chapter 9) bankruptcy is not like bankruptcy for you and me in lots of ways.  US constitutional issues prevent a judge from exerting many of the powers over a state entity the same way might happen in recievership for an individual or company. 

In Bridgeport's case the court ruled that the city was not really broke enough to file for bankruptcy, i.e that it had the fiscal capacity to tax or borrow its way to meet its obligations. Unlike other bankruptcies which really look at assets and liabilities, Chapter 9 is more about cash and the fiscal capacity to raise cash.  Most public assets are not going to be considered for sale or liquidation no matter, so there is no risk of the mayor's chair being carted off to a flea market. 

The thing is that while I believe the City of Pittsburgh was in a far worse shape than Bridgeport was at the time, that precedent was clearly the biggest thing on the mind of city lawyers who likely advised a bankruptcy filing would not go forward.  I personally bet they were wrong on that and that Pittsburgh was not in as good shape as Bridgeport was and well over the line of insolvency in a public sense.  There is even a school of thought that says if Bridgeport just waited another year before filing its fiscal condition would have been so bad that the court would have had no choice but to let the filing go forward.

Still I bet Bridgeport's aborted bankruptcy is the only thing that kept the Murphy administration from filing for bankruptcy right as they took office when they were told the city was about to go cash zero. Prevented from bankruptcy all sorts of even worse things happened.  The result was that over the subsequent decade city in succession 'sold' or liquidated the water department into the water authority (long story there), the city's debt ballooned,  tax liens sold off to a third party without much concern for city of Pittsburgh development and no significant increase (Pension bonds were a wash I would say.. at best) in pension funding would leave us where we are today.   So today we have more debt, more pension liability, no direct control of the water system (think of all the problems that has caused) and had much of a decade of neighborhood economic development arrested because it was held hostage by a wall street company that couldn't spell in Latin. 

Then there is this logic people say the Commonwealth of Pennsylvania must 'approve' any bankruptcy filing.  Also technically true in the legal sense.  In the real world sense it is not so important.  The lawyers might argue, but consider a few things.  In Pennsylvania the state approval for letting a federal bankruptcy filing go forward is mostly embedded in the Act 47 law and process.  There has been municipal bankruptcy in Pennsylvania, even one  recently in the case of Westfall Township.  Did Westfall get permmission to file for banktruptcy?   I would argue it didn't in that an Act 47 process only began after they filed and had a bankruptcy proceeding move forward. The state went along, but it was kind of after the fact.  And in one of the stranger acts of jurisprudence.. some folks may remember the monster AHERF bankruptcy that still lives on in shaping the region's state's health care system.  AHERF, even though it was not a municipality, was a Chapter 9 bankruptcy.  Does not quite make sense to me, but I think it was just too big and too complex to really fit into a Chater 11.  *

In the bigger sense it does not matter if the state really approves a major bankruptcy or not.  If bills go unpaid, or say bond payments don't go out.  Bad things happen and at some point someone would be forced to do something.  The state would have little choice to 'approve' a bankruptcy, or a judge would find some way to rule that a filing could go forward. 

Also unmentioned in the article is the story of Vallejo, California and its bankruptcy that is just about to come out of.  That also is a case where I have argued the fundamental finances there are far better than they were (or are) here.   Go figure and again think about all the victory signs last month when the state accepted the while pension accounting scheme. Is Vallejo a model for what may happen in Harrisburg?   Probably not just yet.

So what happens now?  My guess is that when the judges get back from Tampa and have a hearing on any of this they are likely to push back and say no... no filing for you.   Sort of like the soup guy on Seinfeld.  Federal judges are not going to want to get into what is, on top of everything else, a political circus in the city of Harrisburg.   They will tell them they are not there to settle the city's political problems, whether or not that is the verbiage of any actual ruling who knows.  So a bankruptcy may happen... but I bet it is not right now.   

Still,  I am surprised the Commonwealth let this all get this far already.  There are consequences across the state for such financial miasma in any one municipality, let alone in the state capital.

__________________
* Being such a legal post it is required that I have more footnotes than content. While I have been told AHERF had Chapter 9 proceedings, some legal beagles are disputing that.  So I will defer to the folks at the bar. 

Beatify Pittsburgh

There is a uber-positive oped in Politico today from the director of the Economic Development Administration no less on the state of Pittsburgh today.  The opening paragraph:

If you want to see how American communities can reinvent themselves to compete in today’s global economy, just walk through downtown Pittsburgh. Once abandoned steel plants now house a thriving cluster of innovative robotics companies.

I guess our work is done.

I better get cheap flights to San Juan out of this

Speaking of the airport.  The Allegheny County Airport Authority is on a short list as part of a consortium to privatize operations at the Luis Muñoz Marín International Airport.


Makes sense in a way.  Our folks will certainly be able to show them the most efficient ways to de-ice planes.  Kind of funny when you think about the loss of so many direct Pittsburgh - San Juan flights that USAirways used to have.  Are there any non-stops left to Puerto Rico?


If not San Juan, we were approved recently to have direct flights to Cuba. Go figure.  Shockingly, I don't think any carrier has taken up the opportunity yet. We may (quite logically) be low on the list behind places like Key West


and we will call him a diasporan, and kind of part of the Pittsburgh global political juggernaut:  If you ever want information on Puerto Rican elections, you want to check in on my former colleague Manuel. 

The unbearable lightness of being Allegheny County

So we are now well under a month before the fall election. Really!   Don't believe me?  Check Google or something. 

The title race as best one can tell is the race for Allegheny County Executive.   Let's go out on a limb here and make a prediction.  Given general lack of interest, nor any closeness in the race, nor any other mitigating factor this could be the county race with the lowest recorded turnout ever.  In absolute number of voters, or any metric of voter participation you wish.  Low turnout is not news.  The 'ever' part could be.

Do I have some model predicting that?  Not really.  Call it gut feeling, but it also is the case that even Mark Rauterkus isn't running for anything.  Clearly a sign this isn't a cycle of much interest to anyone. 

There is this race for county executive.  The news folks are trying to do their duty following it, but it comes as close to trying to draw blood from a stone as it gets.  One survey suggests it is borderline close to being within single digits close. 41-31 seems to be the numbers.  I'm pretty sure the straight party line voters on the Democratic side will give Fitz a larger number than that right out of the box.  Personally I suspect Fitz is up by 10 points just among Republicans, but we will see how it turns out.  The only outstanding question is how uber-low turnout will impact the final results.

Should we care about the County Executive race? I'm not sure I have an answer. As much as the debate seems to be focused on taxes and spending as is de rigeur for most races..  what does the county really collect in taxes or spend?   In terms of impact on individual pocket books, county government is almost not a factor; certanly the smallest factor of all the layers of government that impact your checkbook.  The county as we know it is mostly a pass through of state funds for state mandated programs without much leeway for the county to change in any way.  What is left in terms of local tax collections funding general purpose government functions, the county pales compared to just about every other level of government.  So when the debates center around how much less the county can spend, you really have to wonder what there is to debate at all.

Don't believe me. Let's just take residents of the City of Pittsburgh.  Here is what I get for the comparative tax collections for the major taxes hitting residents.  Are there other taxes? Of course.  Lots of the other taxes and fees are not directly tied to the resident voters who will be voting for respective. So just for simplicity, this focuses just on the major tax categories of income, property and sales taxes.

So the punch line in comparative tax revenues per capita you get this:

Is per capita the very best metric for this?  Probably not.  But pick your poison and I can't imagine it works out much different if you worked it out per household or something like that.

So for the mythical average resident of the City of Pittsburgh, the taxes collected by local city and school district are nearly 9 times what Allegheny County gets.   I bet if you really parse and figure what fraction of county expenditures could ever really change much, you really have to wonder what a county executive can really impact beyond the sheer bully pulpit he or she gets.  Is the goal a zero revenue, zero expenditure county government?  It becomes more an existential debate at some point. 

I did just leave out the RAD taxes which are not technically collected by the Allegheny County governmnet.  But the Regional Asset District is coterminus with Allegheny County and it's board is essentially appointed by the county. For all intents and purposes it is an extension of the county, but we live with the illusion that it is independent.  If we were to add it in, RAD sales tax revenues were ~$81 million in 2010.  So it would be an additional $66 per capita annually for county residents.

A Tale of Two Three Presidental Visits

Covered before, but I still think it is a remarkable contrast between the visit by President Obama to Pittsburgh today with a comparable visit by President Reagan to Pittsburgh in 1983.  Two recessions*, two presidents and what must be an obligatory visit to Pittsburgh in tough times.

Or, better yet and passed on by Joe A, it is something of a coincidence that October 11 is also the anniversary of a big visit by FDR to Pittsburgh in 1940. 

* Yes, I know.  The most recent recession technically ended some time ago.  Substitute "period of high unemployment" if you wish.

Daily Ranking - Underused Airports

The Infrastructurist has a list of the most underutilized airports in the world. 

Yup. 

Though I have to say the 'reason' they give is pretty misleading.  No mention at all of a few bankruptcies for USAirways and a terminal built to spec for a hub operation they abandoned. 

Columbus Day - Mapping Italian Pittsburgh

For Columbus Day: Italian Pittsburgh mapped below.  For my Bloomfield friends: no, the census gnomes do not distinguish between Sicilian and Italian.  Still, the only census tract in the county with more than 30% of ethnicities tallied as Italian (individuals can select up to two so it is not a population proportion exactly) is tract 802 in the City of Pittsburgh.   Lower Bloomfield, as it were.

The more things change - energy edition

Some have asked whether I agree with the story earlier in the week on the size of the energy industry in the region.  I have not read it in detail, but without getting into any specific numbers sure I do.  Energy has long been a huge part of the regional economy.  One can argue energy is what we really always were good at.  Without the coal, there would have been no steel and so forth and so on.  But it goes far beyond that if you connect the dots as I wrote years ago in Energy Burgh. 

The funny thing is that when I wrote that I really had folks Downtown laugh at me.  It was the past was the message, not the future.  For much a decade, other than some interest in 'clean coal', energy was not a focus of development. It was all talk of 'high tech' (pick your definition), biotech in particular, 'advanced' manufacuring (I'm not sure there is anything other than 'advanced' manufacturing still surviving these days) and until the bankruptcies of USAirways, air transportation. Remember when air transportation was going to 'replace steel' which was as stilly a concept then as it is now. Talk of energy was 'quaint' as literally put to me.  That general apathy was the main reason I felt compelled to write that piece.

The irony is that if you go back and look at the date of the oped.. 2005.  That must have been awfully close to the time some meeting somewhere was going on starting with "you know, we can get natural gas out of the shale in Pennsylvania".  Funny how disruptive things work.  Just wait until the 'greater' Pittsburgh geothermal industry kicks in which will likely all center on fracking as well and found with Google's help. Nothing happens on it's own. It's all interconnected.

I didn't notice that there is recent news on the WV geothermal front. Involving Pittsburgh even.  It all gives the term "Fracking Water" a whole new life.


One thing I mentioned in that article which didn't plan out was the whole fuel cell project that did not pan out.  At the time it was the biggest thing on the horizon.  The fuel cells Siemens was working on were to be powered by natural gas for the most part. Even in failure, the fuel cell story is a lot more important than it may ever seem.  Pittsburgh beat out intense competition for the fuel cell investment from locations in Florida, but more intense competition from Ross Perot who was pushing for the site to go to Texas and clearly put more money on the table at the time. Yet sheer money didn't win in that decision which says a lot.  In the end the market could not quite support what they were trying to do and they could not quite get their manufacturing costs low enough to make the product, mostly intermediate sized stationary fuel cells, viable.  In some counterfactual world, if the decline in natural gas prices had come a bit earlier, maybe we could have added a growing fuel cell industry to the region as well.  Think what the regional 'energy story' would have been.  Alas.

The site that was to be the fuel cell manufacuting operation? Taken over by US Steel for research.  Again, the more things change......

So is the local energy industry all or even mostly shale gas. Clearly no.  Is the increase in jobs or output reported in the story all shale related.  Probably not either. Check out the story on the gubenatorial election in WV decided this week.  In it is this quote:

But the rising price of coal has boosted the state's economy, giving it a lower unemployment rate than the nation at large and allowing Mr. Tomblin to boast of a state budget surplus in contrast to the fiscal straits of some of its neighbors.

So when you really push out beyond the MSA, and certainly into the 32 counties some focus on these days, coal is still the presence defining the economy, especially when you are talking sheer number of jobs.

A Tale of Two Immigration Policies

First I was fascinated by the contrast with news out of Dayton, Ohio today, and comparing it to what counts as the comparable focus on immigration here in Allegheny County.  Kind of different strategies.

Which just lead to a bit of poking and what do I see... the Mayor of Dayton is a diasporan through and through. A semi-regular blogger no less.  According to his bio he was born in McKeesport to be precise. Must send note to JasonT. 

So from the mayor of Dayton to presidential candidate Ron Paul..  we really may lead the nation in politicians elected in so many other places from where they were born.  If only someone had that quantified.  Self-selection of risk takers in the decision to migrate?

Postscript: I have no idea how he found it, but Bram has the link to a Youtube clip of Steve jobs before the Cupertino city council talking about a proposed new Apple campus HQ with 12k jobs all to be located there.  Cupertino with a population just over 50K!  But even I forget sometimes just how undiverse a place we live in.  Check out the membership of the Cupertino City Council.


-sent from my Apple Newton

The City Redux

I think I know that Pittsburgh voice in this new documentary:




Without having seen it all, I just wonder the contrast with what remains the seminal urban documentary (if that is the description) of the 20th century. 

Holding Hands

If I had any artistic ability, I would make this into a cartoon.   It is hard not to laugh when reading this recent filing in the court case forcing Allegheny County to complete the property reassessment that was supposed to be completed by now.   

The cartoon would have some set of county apparachiki sitting around a fire, slowly roasting a Vodou doll effigy of Judge Wettick pondering new and ever creative ways to torture him.   I guess it all is an improvement from days past when the Judge had to issue formal orders just to have the county officials show up in court.  Or even worse I suppose, the days when the assessor was told not to even read the Judge's edicts by unnamed superiors.

I still miss Ed Schoenenberger.  Since I can find Bernardo Katz a lot easier than I can find Ed these days, I am beginning to wonder if he even was real.   

Anyway..   since his honor is a pretty smart hardworking fellow by most accounts, I suspect he has a plan for the end game here.  The judge's standing in the legal world is about the only thing the Trib and PG agree on completely.  Will be interesting to watch the final countdown here.  For the judge who has never been overturned on appeal, he has to date been thwarted in getting the county to comply with his rulings.  Has the judge finally met his match?

The biggest irony in all of this: If you assume there will be an assessment in the end, the scorched earth strategy of the county intended to delay at any cost will only result in much higher assessed values for most property owners.  Allegheny County is one of a very few places in the country that has seen steady real estate price appreciation in recent years.   If the assessment had gone off years ago as the Judge would have liked, there is little doubt the average real estate values would have been lower than they will come out now.

Shale Past - Shale Future

While shale development is even more in the news than normal.... Here is something worth reading carefully.

One of the biggest players in the whole shale gas play to date has been Chesapeake Energy.  Everyone should read Chesapeake's October investor presentation. (update: darn it.. I didn't save it and they seem to have pulled their October presentation offline??)  I spent just enough time on Wall Street to not really take investor presentations all that seriously, or at the very least discount the hyperbole,  but lots of info in there and some pretty clear foreshadowing of their intentions. 

Read page 23 and page 24 first.  Then go back and read page 20 on where the oil play is.  Once again: go west. 

Also, it seems the big hope is all about future auto use of natural gas as what will support natural gas prices out into the future.  On that the USAToday has a piece on one of the few commerical vehicles you can buy that run on Natural Gas.  See:  Honda prices new tragically ignored natural-gas Civic.  It was for a long time the only natural gas vehicle for retail sale in the US. I don't know if that is still true at the moment.   I was just curious and looked up the official Honda web site for the car.  I plugged in some local zips to find a dealer who would either sell or even service a NG vehicle, and it wouldn't give me one in Pennsylvania at all.  The USAToday article says Honda has just now increased its retail availability for these NG cars to 38 states.  Is Pennsylvania one of them?

Desperately Seeking Spike

In Pennsylvania, the 5 counties with the largest number of permitted Marcellus Shale pads are Bradford, Tioga, Lycoming, Washington and Susquehanna respectively. 

Washington County is by far the largest county among the group. It is also part of a larger metro area.  So set Washington aside just for a moment and think about the other 4 which are the core of Marcellus Shale development in Pennsylvania to date.. especially in the NE and north central parts of the state.

I just added up the employment counts for those 4 counties over the last 5 years and in aggregate this is what you get for the time series:

I must have made a mistake.

Peak Gas... or The metrification of Washington County

So I've been thinking of this story on the data showing Washington County, PA as one of the biggest job growth stories in the US over a recent 12 month period.  NPR's Stateimpact and Jim R. caught it, then the Trib followed up on the factoid that popped up of Washington counting ranking 3rd in percentage of job growth in the nation. 

A good story? Sure.  Related to Marcellus Shale.  Yup.   But still not quite the story it seems for at least two reasons.  Using the exact same data source as the stories are talking about, here is the monthly trend in Washington County employment going back a few years.  You can see the big jump in the last year that resulted in the headlines.  Yet part of that connects to the really sizable and successive drops in the immediate years before. I thought we were a few years into the Marcellus bump? I don't recall any stories on those big drops. Looks like there was a long term growth trend that pretty much stopped in recent years and the very recent gains may be seen as some catching up.  Those who like to infer causality a bit too quickly might even say the arresting of growth in the county seems to coincide with the arrival of Marcellus-related employment.  Of course there was this little recession along the way. 

But there is something else. Despite the claims that the data showed Washington County to have one of the biggest gains in employment among all counties in the US.... it is a bit narrower than that.  The actual data in question only ranks the 323 largest counties in the US.  When you rank US counties by employment, you get that Washington County and Butler County, the very same two stories mentioned in the local coverage for their rapid job growth of late, are literally tied for 311th.  So they are very barely making the cut to even be included in this data at all.  Since the metric being talked about is percentage growth it makes a big difference when you realize we are comparing some very small counties (80K employment each in those two counties) with some very large counties (Los Angeles at the top has over 3 million workers).  Consider that if you added every worker in Washington County to Los Angeles it would not generate the percentage growth there that is being reported for Washington County here.

Actually..  I just realized.  Washington County gained 4K or so workers over the year per this data.  If it had not gained that much employment it would still be down at 75-76K workers.  75,100 is the current cutoff for inclusion in this data.  So they really are barely making it on to the list.

Finally..   Where are all the other counties being impacted by shale gas development in Pennsylvania? No mention of them in this data or related headlines.   Consider that virtually none of the Marcellus impacted counties in PA are large enough to even come close to being on the list of the top 300 or so counties in the US.   The only other one I see in the list is Luzerne County which is at the crossroads of a lot of Marcellus development.  Did it have big job growth in the data?  +1%, or less than that of Philadelphia County if you want a benchmark for a region minimally impacted by shale gas employment. 

Wait, I see Lackawanna County there in the data. That is deep into Marcellus activity. What was their job growth over the same period? 0.4%.... decline! Some folks missed that. Sure isn't mentioned in the Marcellus Shale Coalition's PR on this data. Funny that. Must not be the place with the zero % unemployment rate.  That by the way is the worst job number reported for a Pennsylvania County in this data and one of the worst performances nationwide in the data being reported on.  Seems like that might be worth a headline in a local paper up there.  I may need to check the Rolodex,

Given all the talk, let alone the zero unemployment rates....  How can there possibly be an employment decline of any kind in the heart of Marcellus Land in Northeast PA?  Hmmmmmmmm.   That would be my longest hmm yet.

Base Zero Math

I really don't get it. Instead of backtracking, it seems a US Congressman is continuing to insist that 2 counties in Pennsylvania have zero unemployment rates.   I guess it counts as equivocation in saying 'virtually' zero.

While academics and others may debate the veractiy of the official unemployment rate calculation, it is still the truth that the widely cited unemployment rate is by far one of the most understood metrics out there. So there is no ambiguity as to what data is being referred to when you cite the 'unemployment rate'. and the source: it is generated for the most part with data direct from the state of Pennsylvania and the Current Population Survey.

If you have any doubts about just how high county unemployment rates are in Pennsylvania right now, you can easily check them out yourself. In fact if you were to round to the nearest decade, every county in Pennsylvania is closer to 10% unemployment than zero. This all gives 'new math' a whole new dimension.

Of course, since he said it, folks like the American Petroleum Institute (API) (which really should know better.. they know numbers) are repeating it.  See their blog post:  Good News Friday. 0% Unemployment.  

Not like there isn't positive Marcellus related news out there.  From the Globe and Mail today:  Shale Gas Gives Plastic Sector a New Lease on Life.

What is worth reading also is from the WSJ:  How North Dakota Became Saudi Arabia.  Since everyone is saying Marcellus is making Pennsylvania the next Saudi Arabia..  I am not sure what it means any more to be Saudi Arabia in the first place.  Of course, that WSJ article was really talking about oil.  ND also has natural gas, but in an earlier NYT last week there was this: In North Dakota, Flames of Wasted Natural Gas Light the Prairie.

So our Saudi Arabia is based entirely on a commodity the other Saudi Arabia finds so relatively value-less it is burning it off for free.    Hmm.

or is the oil boom coming as well?  Hmmmmm.


Finally..  since I am really talking about supply side economics in all of that.  I do note that my natural gas bill is likely going down and would concur it is in at least part.. possibly large part.. due to natural gas development here and the new supply it is generating.  What is odd though is that not all local gas companies are lowering their prices.  Out there closer to the new drilling there are some natural gas rates actually rising. 

Here is the fundamental question though.  The industry says this is all merely the beginning of a huge new supply of gas we will all benefit from.  OK.  It is also true that natural gas prices are pretty low now.  What will happen to natural gas markets when the bulk of all this new shale gas comes online?''


and more on just plain misreading numbers.  There is a news item today from various sources.  NPR's Stateimpact and Jim R. caught it, then the Trib followed up today on the factoid that popped up of Washignton counting ranking 3rd in percentage of job growth among large counties.  Now note the Marcellus Shale coaltion's version of it which seems to say Washington County's growth was 3rd among all 3,141 county equivalents in the nation.  Uh.. no.  Read the BLS release.  Washington County is #3 among not 3,141, but of 322 of the largest counties.  They actually reference the 3,141 number to emphasize the point.  The biggest deal? No, but just missing 90% of the counties makes for a somewhat different story.  Probably worth mentioning that Washington County, PA is one of the smallest counties to actually make that list which probably impacts why it pops up in a percentage job growth statistic.