Marcellus Impact Fee: Grover Norquist v. Joe Scarnati

By Jared Edgerton, Contributing Writer

The Marcellus shale impact fee debate just got a little more complicated.

Yesterday Grover Norquist, head of the Americans for Tax Reform, sent a letter to several Pennsylvanian lawmakers, specifically Senator Mary Jo White and Senate President Pro Tempore Joe Scarnati. In the letter, Norquist decreed that the proposed drilling impact fee is indeed a tax, warning that “a vote in favor of Senate Bill 1100 also represents a violation of the Taxpayer Protection Pledge.”

Currently four State Senators, thirty State Representatives, and Governor Corbett have signed Norquist’s pledge to never raise taxes (a complete list of the members who have signed is below). The list includes five Democrats, including staunch severance tax supporter State Rep. Bud George. Neither White nor Scarnati have signed the pledge.

In the letter Norquist told White, whose committee would need to approve the impact fee, that in November Pennsylvanian voters chose to rectify “the state’s overspending problem,” and that the impact fee would only contribute “money for pet projects,” going as far to calling it a “slush fund.”

Scarnati introduced the impact fee in April as a $10,000 base fee per well that would generate additional revenue based on gas prices. Estimations put the impact fee at generating $76 million this year, $103 million in 2012 and $127 million in 2013. His proposal was tepidly accepted by some environmental groups, but has been generally criticized by others that say his plan falls short of holding Marcellus Shale accountable.

The crux of the environmentalist argument was the impact fee did not properly assess the environmental damages and that additional revenue generated by a stringent tax could offset slashes to education and human services in the budget and “address other state-wide environmental needs.”

Josh McNeil, Executive Director of Conservation Voters of PA, called Scarnati’s plan “written for natural gas drillers.” And Kristy Chrostoff, an environmental activist, opined that Pennsylvanian children would not have “full-day of kindergarten…because gas companies and other corporations are not paying a fair share of taxes.”

Norquist’s letter has reignited these frustrations. A blog post by Pennsylvanian environmental group PennFuture asks, “Who elected Grover Norquist to run Pennsylvania?

The blog also reminded Pennsylvanians of how they are still paying for their past experiences with the “old coal, steel, railroad and timber corporations,” citing that “70 percent of Pennsylvania voters and taxpayers favor the enactment of a tax on the gas drillers.”

Scarnati has also fired back in a letter to Norquist providing four reasons the impact fee is not a tax:

1) Not one penny of the impact fee is deposited into the General Fund.
2) The fee is entirely dedicated to local and statewide impacts associated directly or indirectly with gas drilling.
3) The impact fee is modeled after the municipal waste fee currently set forth in Pennsylvania law.
4) The fee is a fixed amount per well

In the letter Scarnati also disputed Norquist claim that the generated revenue would be a “slush fund” and used for “pet projects.” Scarnati wrote that this claim is simply inaccurate and guaranteed the money from the impact fee will be used for “local roads and bridges, conservation clean-up projects, emergency preparedness, watershed protection, dam safety projects and plugging abandoned and orphaned oil and gas wells.

Scarnati is hoping to revise the budget, passed by the House on Tuesday, to include the impact fee.

Time will tell how much of an impact Norquist has on the impact fee. The only thing certain is that the final judge and jury in this dispute is Tom Corbett.

Nicole Houck contributed to this report.

PA signatories of the Taxpayer Protection Pledge:

4 Senators of 50
Lisa Boscola (D-18)
John H. Eichelberger (R-30)
Mike Folmer (R-48)
Jane Orie (R-40)

30 House members of 203
Stephen Barrar (R-160)
Kerry Benninghoff (R-171)
Stephen Bloom (R-199)
Scott W. Boyd (R-43)
Jim Cox (R-129)
Thomas C. Creighton (R-37)
George Dunbar (R-56)
Brian Ellis (R-11)
Joe Emrick (R-137)
Camille George (D-74)
Mark M. Gillen (R-128)
Ted Harhai (D-58)
Susan C. Helm (R-104)
Rob Kauffman (R-89)
Fred Keller (R-85)
Tim Krieger (R-57)
David M. Maloney (R-130)
Jim Marshall (R-14)
Daryl Metcalfe (R-12)
Gerald J. Mullery (D-119)
Scott Perry (R-92)
Joseph A. Petrarca (D-55)
Jeff Pyle (R-60)
Dave Reed (R-62)
Brad Roae (R-6)
Todd A. Rock (R-90)
Mario M. Scavello (R-176)
Justin Simmons (R-131)
Rosemarie Swanger (R-102)
Katherine McDowell Watson (R-144)

May 26th, 2011 | Posted in Front Page Stories, Harrisburg | No Comments