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home : insight & opinion : guest columns
February 21, 2019

1/21/2019 2:12:00 PM
By SETH WHITEHEAD
For the Daily News

Editor's note: Seth Whitehead is Executive Director of the Illinois Petroleum Resources Board.



When most folks think of the Illinois oil industry, they likely associate Crawford County with the Marathon refinery in Robinson. And rightfully so. The facility employs about 690 people and refines 245,000 barrels of oil per day.

But not to be forgotten is the contribution Crawford County's storied oil production industry continues to make to the local economy and the critical role it plays in providing much-needed funding to the county's public schools.

Many folks are unaware that Illinois oil production is assessed and taxed as real estate, similar to property taxes paid on a residential home. All of the revenue collected from this tax stays at the local level and goes directly to support the areas where oil is produced: counties, villages, townships, cities, and most importantly, local schools.

In Crawford County, this "ad valorem" tax revenue generated from the county's roughly 800,000 barrels of annual oil production totaled $3.2 million from 2007 to 2013, according to a recent RCF Economic and Financial Consulting economic impact report. More than half of this revenue went to fund public schools in the county.

Collectively, the RCF analysis finds Illinois oil production generated $57.4 million in ad valorem tax revenue for the state's 40-plus oil-producing counties from 2007 to 2013. So in essence, all those iconic "nodding donkey" pumpjacks that dot the countryside throughout Crawford County and much of southeastern Illinois have not only been pumping oil for more than 100 years - they've pumped money into our local schools as well.

This revenue is absolutely essential, not only because Illinois public schools rely on local property tax revenue for more than 60 percent of their funding, but also because the state routinely fails to meet its already meager education funding obligations.

Illinois ranks dead last in public school funding from state coffers. And due in large part to the ongoing state pension crisis, that already inadequate public school funding has been pro-rated at 89 percent in recent years, placing even more burden at the local level, where too much has been asked in the first place.

And even though Illinois' oil production is no longer at the levels achieved when Crawford County's oil boom helped establish the Land of Lincoln as one of the top producing states in the country many decades ago, the RCF analysis finds that the upstream industry is responsible for 4,000 direct jobs in the state and four percent of overall employment in Crawford County. Illinois' upstream oil industry can also be credited for $770 million in statewide personal and business income and $330 million in tax revenue annually, in addition to providing royalty income for 30,000 people.

These are some figures Illinoisans should keep in mind the next time a "Keep It in the Ground" group suggests it is in the best interest of the state to do away with the oil industry altogether. For those unfamiliar with Illinois' "Keep It In the Ground" movement - which, not surprisingly, is concentrated in the northern region of the state - it is effectively a political movement that argues that eliminating an industry that has generated billions in economic activity over 100 years is justifiable in exchange for addressing climate change.

But the fact remains that eliminating Illinois' oil industry would have absolutely no downward effect on oil and natural gas consumption or carbon dioxide emissions. And considering Illinois has become infamous for struggling to create jobs, adequately fund public schools and generate tax revenue, the last thing our leaders need to do is eliminate an industry that is doing all three of those things.

The RCF report confirms that the "Keep It In the Ground" agenda is not only a threat to the livelihoods of folks in Crawford County, but the already fragile financial wellbeing of the state as a whole.

For more on the Illinois oil industry's contributions to the state's economy, check out RCF Economic and Financial Consulting's economic impact report at the following link on iprb.org: https://bit.ly/2S4379W.









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