Washington County: State of the economy

Daniel Bates
Pittsburgh Business Times

Just over a year ago, Washington County’s commissioners celebrated the previous year’s economic successes in this Southwestern Pennsylvania county with more than 400 members of the Washington County Chamber of Commerce. Their take-away message: Washington County – largely due to the energy industry, manufacturers, tourism and their leveraged investments in the region – had become a model over the past 20 years for diversified regional economic growth in Pennsylvania.

Then the pandemic hit.

A year to the day after federal and state government leaders declared the pandemic and nearly shut down the American economy, those same county commissioners were back with the Washington County Chamber, this time via a webinar sponsored by Community Bank, with a new economic message.

But it’s not what you might think.

The commissioners all agreed that, despite difficult times, that same economic growth model this past year helped to buoy the county, carrying it through the Covid-19 crisis and paving the way for future growth and development across industries.

“As you know, a lot of businesses had significant impacts because of the closure orders, the stay-at-home orders, the working-remotely orders, and we navigated the best we could,” said Diana Irey Vaughan, chair of the Washington County Board of Commissioners. “It has been challenging for all industries, but especially for our small businesses and our hospitality industry.

“But we had successes. In manufacturing, we had success with a 250,000-square-foot office space and warehouse that’s coming for a manufacturing company in Alta Vista Business Park. Also, Ameri-Precision Metals has redeveloped property in Canonsburg. They continue to invest. And we’ve been really fortunate with the energy industry. They were not crippled during this time.”



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She also mentioned that Canonsburg-based CONSOL Energy Inc. is working on a pilot project right now to develop a new zero-emission power plant that would use coal waste. Pennsylvania American Water, meanwhile, is working to replace 12 miles of aging water main lines across Washington County, investing roughly $16.7 million in the county for that project alone. And in Cecil Township, she said, the county is “really close to phase one” with the development of a 911-acre site known as Cool Valley.

All told, Irey Vaughan noted, Washington County’s public and private partners collectively had announced more than $281 million in new investment in the county in 2020, even amidst the pandemic, which bodes well for future growth in the county.

“While this growth in business investment was expectedly down from 2019, we are nonetheless pleased with where they stand considering the economy was shuttered for nine months last year,” she said.

As Larry Maggi, Washington County commissioner, summed up in his assessment of the county’s state of the economy, “I do think we’re poised perfectly to go forward, and it looks like there’s some light at the end of the tunnel.”

In support of energy and impact fees

That light may be shining most brightly from the natural gas industry and its contributions – both direct and indirect – to the county’s economy, all of the commissioners agreed.

“It’s been tough for them,” Irey Vaughan said of the energy sector in 2020, “but the energy industry has been an industry here in Washington County that has really helped us through good times and bad times. Pennsylvania as a whole has collected over $200 million from the impact fees, and as we all know, some of that money comes back to Washington County through Act 13 monies. We got $6.6 million here in Washington County. And we once again led all counties with the highest number of wells. That has helped us in Washington County.”

Irey Vaughan and her colleagues credit the industry’s continued growth and regional contribution to lifting up the local economy during such challenging times this past year. Impact fees from the industry, they noted, have kept county taxes low, paid for 911 system improvements, funded a court-ordered real estate reassessment and a critical airport access road, and other projects. And the industry continues to help fund local nonprofits that provide services to residents.

“Let’s make sure everyone understands, we depend on the energy industry surviving and thriving here in Washington County,” Irey Vaughan said. “The energy industry in and of itself is so important to us, and then you look at all of the spin-off businesses. Forecasts we’ve heard in the gas industry is that it’s going to be sustainable, and it will be improved in the future. We commissioners are extremely supportive of this industry, and we’ll do all we can.”

Concerned about the potential for future additional taxation of the industry, Irey Vaughan said, “We know that budget deficits are growing in state and federal government. And we just do not want those deficits to be placed on the backs of an industry that has been so good to us. We’re going to have to fight for them to make sure that doesn’t happen.”

Maggi concurred.

“The energy sector is so important to Washington County,” he said. “It has been a game-changer … It’s our mainstay, and it has given us a shot in the arm. We’re excited to support that industry.”

Resilience for small businesses, nonprofits and the community

While the energy and manufacturing sectors largely carried the day for the county in 2020, the commissioners acknowledge that they had to provide some level of resiliency – supported by the Coronavirus Aid, Relief, and Economic Security (CARES) Act loans and other funding, as well as partnerships with local banks – for the hospitality industry, local hospitals, nonprofits, and, in general, the small-business community.

“This pandemic wasn’t just Southwestern Pennsylvania; it was the whole country, and it brought everyone to our knees,” said Nick Sherman, Washington County commissioner. “Our past practice was always to make sure we’re providing a stable place for a business to exist and then getting out of the way. The problem with Covid-19 is we actually had to stand by these businesses, or a lot of them were going to go under.”

Sherman says the commissioners and economic development agencies worked with local banking partners that helped businesses in the county complete 2,765 loans totaling nearly $399 million, which impacted 32,125 employees.

“That’s a large number here for Washington County,” Sherman said. I think [this] was one of the biggest wins we had here and that the banking industry had.”

Perhaps the county’s biggest success in 2020, Sherman said, was the Washington County Small Business and Nonprofit Relief funding, which provided grants through the state from the CARES Act.

As Sherman explained it, “Governor Wolf gave large pockets of money to every county, under the direction that it might be easy to just give them to each township and have them dole it out however they wanted to.”

“In Washington County, we created our own small-business grant program. In Washington County alone, we did 245 grants totaling $7,987,702 to local small businesses.”

Irey Vaughan said local hospitals likewise received CARES Act funding “to the tune of $3 million. They’ve gone to great expense to vaccinate our citizens using their own needles that will make sure there’s less waste of the vaccines so they can vaccinate more people. In the middle of providing significant care to the greatest number of individuals impacted by the virus, they then are thrown on to do the vaccines as well. So they’re really heroes in our community.”

Sherman also mentioned that other nonprofits, as well as local volunteer fire departments received funding support from the grant program.

“When Covid hit, they were unable to host a lot of their fundraisers,” Sherman explained. “When we look at the budgets of these very small fire departments out in rural Washington County, the lion’s share comes from this fundraising.”

Additional funding support improved broadband services, new internet hotspots, and more reliable internet “for the first time” to more than 2,000 households to ensure adequate remote educational experiences for children in the county.

Local Share Account becomes more transparent

One funding program that took a significant hit in 2020 was the county’s Local Share Account (LSA) program, which is funded by a share of gaming revenue from the Meadows Racetrack and Casino. The casino was shut down for much of the year because of Covid. Still, according to Maggi, the program managed to generate $6.6 million for the local economy, which then was used to leverage an additional $31 million in investment for local economic development projects.

“We’ve literally, since it started, been able to leverage over half a billion dollars’ worth of investments in Washington County,” Maggi said. “Unfortunately, this past year, casinos were impacted.”

This year did see some changes to the LSA program, though, the commissioner said. In an effort to improve the funding process and make it even more transparent, the LSA Committee — the group in charge of making funding recommendations to the commissioners — held virtual public hearings to discuss projects. The result, Maggi said, was more efficiency, transparency, “and its ability to leverage additional funds. And we did that.”

Laying out the future

Maggi and the other commissioners will be counting on the LSA funds, as well as continued impact fees and the additional funds that could be leveraged from other sources, to accelerate the county’s economic recovery after a pandemic year.

“What we, the commissions, kept in mind was for the future,” Maggi said. “It’s been a tough year, and we’re going to come out of this. I think we’ve positioned ourselves well with some of the projects for future development. Almost half went to infrastructure – sewage and water, and I think that’s so important to open up some of these other areas for development.”

Jeff Kotula, president of the Washington County Chamber, wrapped up the commissioners’ state-of-the-economy discussion by saying, “While the pandemic has created challenges never experienced by this generation of businesses and residents, we have been fortunate that our past actions have prepared us for this difficult economy. The ability for us as a county to work together — as public and private partners — has been the foundation of our efforts and will continue to yield results.”

Daniel Bates is a Pittsburgh-based freelance writer.