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While shale gas is providing a sack of holiday goodies to some states this year, the Fall 2011 Fiscal Survey of States details the unfortunate plight faced by many others in light of the economy’s slow recovery.
The new report, released by the National Governors Association (NGA) and the National Association of State Budget Officers (NASBO), found that, despite showing some signs of recovery, states still face a “precarious financial situation.” As NASBO executive director Scott Pattison explained to Washington Post reporter Michael Fletcher:
[quote]State budgets are certainly improving; however, growth is weak, and there is not enough money for all the bills coming in. State officials will still be cutting some programs, and increases in funding for any program except for health care will be rare.[/quote]
For many states, declining revenues have caused governments to cut jobs, adding to the unemployment crisis, The Washington Post says. According to the Bureau of Labor Statistics, state and local governments have shed 455,000 jobs since the beginning of 2010. Additionally, increased unemployment in the private sector means governments have had to spend more money on services for those without jobs, putting further pressure on budgets, Fletcher writes.
However, for some states, there’s a light burning brightly at the end of the tunnel: shale gas. For example, in Pennsylvania and Ohio, shale gas development could create new jobs and generate revenue for local economies. In Pennsylvania, residents who heat their homes with natural gas can also expect a big break this winter. UGI Penn Natural Gas estimates the average natural gas bill will be 9 percent lower than last year, thanks largely to Marcellus Shale development.
In Ohio, shale gas has allowed the troubled state to rebuild its economy – a state where the chemical industry employs more than 42,000 people and generates $28 billion in revenue. For cities like Youngstown, Ohio, which struggles with 11 percent unemployment, the production of natural gas encourages economic development, including the steel industry. The community’s new V&M Star plant means 350 new jobs, according to the Associated Press. This snowball effect pumps money back into the economy, and also drives the establishment and growth of other businesses in the area, such as restaurants.
With state budgets continuing to feel the squeeze, and unemployment remaining high, shale gas offers a solution for those looking to rebuild communities and put people back to work.
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