Sunday, February 14, 2016

GOP lawmaker introduces gas drilling tax

Plenty of Democrats have called for a tax on natural gas drilling in Pennsylvania, but now a Republican has joined the chorus.

GOP lawmaker introduces gas drilling tax


Plenty of Democrats have called for a tax on natural gas drilling in Pennsylvania, but now a Republican has joined the chorus.

Rep. Gene DiGirolamo (R., Bucks) is proposing a 4.9 percent severance tax on natural gas drilling that he said would generate close to $640 million for the Commonwealth next year.

"It's going to be a tough budget year," said DiGirolamo. "There is an awful lot of need."

DiGirolamo said the distribution of the money ($237 million) now going to counties and municipalities under the impact fee would place and the additional $400 million would be divvied up within the general fund, with the largest piece for education (40 percent) and the rest set aside for the environment, parks, solar energy and health and human services. 

DiGirolamo, along with fellow Republican Rep. Thomas Murt of Montgomery Count  and Democratic Reps. Pam DeLissio of Philadelphia and Harry Readshaw of Allegheny County , today sent out a co-sponsorship memo to fellow House members seeking support for the legislation.

In it they write that the total impact fee under Act 13 that will be paid over 15 years amount to less than 2% of the value of the natural gas sold from the well.

"Our proposal, like that of so many other states, is to tax the value of the natural gas produced," the memo says. "The tax would be 4.9 percent of the value of natural gas sold from an unconventional well. Pennsylvania is the only major gas producing state that does not impose a drilling tax."

DiGirolamo said the tax is lower than virtually all of the other gas-producing states, including neighboring West Virginia, which has a 5 percent gas tax.

Gov. Corbett has long maintained he would not support any legislation with a tax increase. But recently he signed the transportation bill that includes lifting the cap on the oil franchise tax, which will all but certainly be passed on to motorists at the pump.

Some gas companies have threatened to pull up stakes and leave Pennsylvania if a tax was imposed.

DiGirolamo doubts that would occur. "I think the industry is thriving here and it looks to me that the gas deposits in Pennsylvania are incredible," he said. "This is a reasonable tax and it's the right thing to do."









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Commonwealth Confidential gives you regularly updated coverage of the state legislature, the governor and the workings of the state bureaucracy. It is written by Angela Couloumbis in the Inquirer's Harrisburg bureau, based in the statehouse, and by the newspaper's far-flung campaign reporters.

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