Rendell proclaims shale tax dead, blames Republicans

Gov. Rendell today proclaimed the Marcellus Shale natural gas extraction tax dead for 2010.

In a statement released this morning, Rendell blamed the Senate and House Republicans for failing to negotiate in good faith, despite his best efforts to reach a compromise.

Rendell accused the Republicans of putting the costs of gas drilling "on the backs of Pennsylvania taxpayers," rather than on the big oil and gas companies who "stand to reap enormous wealth from our state's resources."

"It is irresponsible for Senate and House Republicans to refuse to compromise and simply turn their backs on these negotiations after days and weeks and months of work," said Rendell. "They signed a pledge to the people of Pennsylvania to enact a tax that requires drilling companies to pay their fair share for removing our state's natural resources from the ground, and now they are walking away from that commitment."

In an Oct. 19 conference call with legislative leaders, Rendell asked for counterproposals to a compromise tax plan - containing a phased-in tax starting at 3 percent - that he had outlined last week.

On Wednesday, the Senate Republicans - who have said they want a tax no higher than 1.5 percent in the first year - offered no counter proposal and responded in a letter that in order for a tax to be considered in the Senate, the House would have to ask first. The House has so far passed two gas extraction tax bills and Democratic leaders in that chamber said they would not take further action until an agreement was reached with the Senate.

Rendell originally proposed a severance tax in February of 5 percent of the value of the gas at the wellhead, plus 4.7 cents per thousand cubic feet. A bill that passed the House earlier this month contained a tax of about 10 percent. Rendell this month proposed a compromise that called for a phased-in tax of 3 percent in the first year, rising to 5 percent in the third year.

The General Assembly has left the Capitol for its election recess, and Senate Republicans have announced that they will not return for voting days after the Nov. 2 election.

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