A bipartisan coalition of PA legislators stood together today to announce their support of a tax on the extraction of Marcellus Shale gas, a hot topic among environmentalists as of late. The lawmakers have different tax rates, but a common theme is that much of the money would be directed to fund education. .
The package of bills introduced in different forms by the legislators at the press event will act as an addition to the current impact fee imposed on drillers due to 2012’s Act 13. Currently, Pennsylvania is the only major gas-producing state that lacks a tax on the extraction of shale gas.
According to 2012 rankings provided by the legislators, PA is number three in the list of the top 10 states for natural gas drilling, generating 9% of U.S. natural gas production. The impact fee currently in place is equivalent to 0.6% of an effective tax rate in 2014. The two states above PA in the top 10 list, Texas and Louisiana, have tax rates of 7.5% and 3.0%, respectively.
All sponsoring legislators believe that the proposal balances the needs of both the Commonwealth itself and the natural gas industry by instituting a fair tax. They also believe the proposal would put Pennsylvania in line with other states that conduct a good amount of drilling for natural gas.
The revenues gained from the tax will be put to fundamentally-accepted good uses. Senate Democrats, who took the lead in organizing the event, provided details of their proposal at the event. In FY 2014-2015, the revenues will be invested in public education, proven economic development and environmental protection programs. To take a closer look at how the money will be split up: Senate Democrats has said the state will receive around $720 million in revenue from a 5% drilling tax. The biggest chunk, $375 million, will fund public education. This would grow to $453 million by FY 2015-2016 and end up culminating in over $1 billion for public education in 2020. All annual tax increases and fees after FY 2015-2016 would be put toward funding education.
$195 million will go toward the economy and creating jobs for FY 2014-2015. In FY 2015-2016, and every year thereafter, $250 million would be put toward PA’s economy. The funds could have several uses, including funding DCED programs, infrastructure investments, local development or new tax reduction incentives.
The last $150 million will go toward protecting Pennsylvania’s environment. $75 million would be provided for Growing Greener programs and another $75 million would replace Governor Tom Corbett’s plan to allow Marcellus drilling near state parks and forest land. In FY 2015-2016 and every following year, the plans would provide $120 million for Growing Greener programs and $30 million for other environmental programs.
The bipartisan members of the coalition also point out that during FY 2014-2015, the money gained from this tax would help to provide short-term budget relief in a number of different ways. This would include relieving the need to end the moratorium on drilling on state lands as proposed by Corbett.
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5 Responses
Pennsylvania is the only state with significant mineral reserves and extraction industry that does not impose any fee for their exploitation. We have seen massive cutbacks in state funding for Libraries, Historical Societies, research, the Arts, after-school programs, etc. Plus, our real estate and school taxes have increased substantially to make up for this deficit. Ours is a miserable state government, headed by a governor who took a $1 million “campaign contribution” in exchange for giving gas drillers carte blanche. We are nauseated by these developments.
It’s about time: Texas and Louisiana have a booming natural gas industry — they have not been hurt by an extraction tax. The industry is also paying a small informal tax in Pennsylvania, in the form of political contributions. I’d rather see it increased and go to helping the economy, education and environment.
The motorist outrageous gas tax hike should be repealed and replaced with the Marcellus Tax. Then the Democrats and RINO’s won’t have an easy source of money to waste or use instead of reforming the outrageous state & teachers’ union ridiculous pensions
Too reasonable. Can never get through the Big Gas-owned Republican Leadership of house or Senate, much less Chesapeake’s personal houseboy, One-term Tommie.
RINOs Ted Erickson, Gene DiGirolamo & Tom Murt – lickspittles of the enviro-lobby, the teachers’ unions and the economy-killing tax-increasers.
Why don’t you clowns just get it over with and switch parties, anyway.
And don’t think that you’re fooling anybody by pretending to be conservatives – everybody in Montco knows about how Murt is thick as thieves with Josh Shapiro. (If you don’t believe me – Google it.)