Mine the budget

MINING companies desperately want access to natural-gas reserves under the Marcellus Shale, a geological formation in western Pennsylvania. The state desperately needs new sources of revenue. So why did Gov. Rendell take a tax on natural-gas extraction off the table in budget negotiations?

For months, Rendell has been talking about imposing a new tax on mining. According to state officials, the proposal would generate more than $47 million in the first year and $500 million by 2015. That kind of money would go a long way to help solve the state's multibillion-dollar deficit.

Rendell said he decided to drop the proposal after meeting with officials from mining companies. Natural-gas prices are low, and the governor fears a new tax could stunt the growth of a new industry. It may also appease Republicans in the state Senate, who oppose any tax increase.

Still, we wonder if this was the best decision. Pennsylvania is one of the only states in the country that doesn't tax mineral extraction. Also, the elimination of this source of revenue could mean more painful budget cuts. It shouldn't be taken off the table without a painless alternative to raising revenues.