Citing a projected budget deficit, a bipartisan group of lawmakers from the House and Senate joined today to call on their colleagues to pass a Marcellus Shale gas drilling tax.
The lawmakers said the state could generate close to $1 billion with a shale tax of as much as 6 percent.
Gov. Corbett and Republican legislative leaders have stood firm against the shale tax, fearing it would threaten the economic growth of the industry.
But lawmakers speaking at a news conference in the Capitol said Pennsylvania is poised to become the second leading producer of natural gas behind Texas and that drillers can well afford to contribute more to the state economy.
“Pennsylvania is the only state in the nation that does not impose a severance tax on natural gas,” said Sen. Vincent Hughes, (D., Phila.) the ranking Democrat on the Senate Appropriations Committee. “We all agree that we need legislation that will correct this policy failure and generate funding for critical needs, including education.”
Hughes said the lawmakers were not uniting behind a particular plan (there are at least three separate shale tax bills that have been introduced) but rather hoping to spark discussion that could lead toward an agreeable compromise as the budget season progresses this spring.
“This is a critically important issue for Pennsylvania,” said Rep. Gene DiGirolamo (R., Bucks), sponsor of one of the bills. “We’ve got an awful lot of challenges with the budget.”
DiGirolamo said he believed 25 to 30 Republicans would support a fair shale tax proposal
Senators John Yudichak (D., Carbon) said he wants to debunk the myths that the drilling jobs will disappear with a tax. ”It is shortsighted and we are shortchanging the people of Pennsylvania,” he said.
A spokesman for the Pennsylvania Chamber of Commerce said lawmakers are ignoring the high taxes businesses already pay in the state.
“The continued calls for a severance tax fail to consider the overall tax burden on job creators in our state. Pennsylvania’s corporate tax of 9.99 percent is by far the highest effective rate in the nation, and it is constantly referenced as a deterrent for job growth," said Todd Brysiak, director of communications for the Pennsylvania Chamber of Commerce
He noted shale drilling has led to more than $600 million in overall investments through the existing impact fee.
Under current law, Pennsylvania is projected to receive $217 million this year as a result of the current drilling impact fee. Proposed pieces of legislation currently circulating through the capitol could generate up to $937 million through a combination of both the fee and severance tax, said Hughes in a statement.
“This is a common sense issue, not a partisan issue,” said Rep. Gene DiGirolamo (R., Bucks).
DiGirolamo said he believed 25 to 30 Republicans would support a fair shale tax proposal.
Other lawmakers at the event were Sens. James Brewster (D.,Allegheny), Judith Schwank (D., Berks), Edwin Erickson (R., Delaware) and Reps. Greg Vitali (D., Delaware), Tina Davis (D., Bucks), Pamela DeLissio (D., Philadelphia), and Thomas Murt (R., Montgomery).
Click here for Philly.com's politics page.