Pittsburgh Controller Says Shale Jobs Overestimated

Pittsburgh controller Michael Lamb sees no windfall for Pennsylvania’s second-most populous city from Marcellus Shale drilling.

Lamb, a 51-year-old Democrat, said that even though there may be “some increase in activity” for regional engineering and law firms, natural-gas production isn’t boosting city employment. While Pittsburgh blocks drilling within its borders, residents were able to seek jobs in nearby communities where energy companies use hydraulic fracturing, he said. Since 2009, more than 7,100 Marcellus wells have been sunk in Pennsylvania, according to state records.

Lamb is serving his second four-year term as the city’s controller, an elected position that approves contracts and audits municipal expenditures and departments. The son of a former Pennsylvania senate majority leader, Lamb withdrew from the Pittsburgh mayor’s race last year.

The following is condensed from a recent phone interview:

Q. Has Pittsburgh benefited from Marcellus Shale drilling?

A. We haven’t seen in the city itself much job creation at all from Marcellus. The job creation that’s talked about through Marcellus drilling has been overhyped in two ways. One, I don’t think it creates the jobs they expected it would. Second, a lot of the jobs that are created are for people who come in from out of state to work on these rigs and then move on.

Q. Tax-exempt employers, including the University of Pittsburgh Medical Center, make up 33 percent of the tax base in Pittsburgh. Where do you stand on getting money or free services from non-profits?

A. We really need them to step up and help us provide services. They’re not paying property taxes; they’re not paying the basic business tax, which is the payroll preparation tax. There are a couple opportunities to do some things legislatively. One would be to expand the payroll preparation tax, which was originally intended to go toward all employers. If we were to expand that to not-for-profit employers, that would be a big help. In the meantime, we’ve got to find ways to let them know why the request that we’re making falls within their mission, whether that is helping to fund emergency services or contributing to basic infrastructure that they will benefit from as well.

Q. Mayor Bill Peduto requested that the city stay in the state’s program for distressed municipalities known as Act 47, where it’s been since December 2003. Should the city remain there?

A. Basically, it is a bankruptcy-lite situation. My feeling is that when you’re in bankruptcy or bankruptcy-lite, you want to get out of it. We have performed well over the last two to three years. We certainly continue to have legacy challenges like pension and infrastructure needs. But we performed well enough to come out of Act 47. Remaining a distressed community - - that is not the best selling point for us. There are advantages that would accrue to us if we can lift that title.

Q. What’s the biggest challenge ahead for Pittsburgh?

A. The city’s biggest issue has been the dramatic loss of population that we’ve seen since the ’60s. We’ve lost more than half of our population. We have half the tax base we need to provide the services that a city like ours needs.

Q. What distinguishes Pittsburgh?

A. So much has gone on here to help grow this country. In the early days, if you wanted to explore the continent, Pittsburgh was the starting place because of our water transportation. Even today, when you think of rail transportation, Pittsburgh is that key piece between Philadelphia and New York and Chicago. This has always been a gateway-type city and as a result, we are a more global-thinking city. While it has changed a lot over the last 50 years, Pittsburgh is still a city with a blue-collar sensitivity and a blue-collar attitude.

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To contact the reporter on this story: Romy Varghese in Philadelphia at rvarghese8@bloomberg.net

To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net Jeffrey Taylor, Pete Young

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