Wednesday, July 29, 2015

Crunch time: State legislature must pass severance tax

Yesterday, the House Appropriations Committee took the first step toward passing a severance tax on natural gas extraction in the Marcellus Shale region. The bill, which would generate about $200 million in new revenue, could come up for a vote in the State House as soon as today.

Crunch time: State legislature must pass severance tax

0 comments

Yesterday, the House Appropriations Committee took the first step toward passing a severance tax on natural gas extraction in the Marcellus Shale region. The bill, which would generate about $200 million in new revenue, could come up for a vote in the State House as soon as today.

That's a positive step, even if Republicans warn that the tax rate passed by the Appropriations Committee is unlikely to pass at it's current level. It's time for the state legislature to stop dawdling and join the rest of the country in taxing companies that mine natural gas in Pennsylvania.

Make no mistake: the natural gas drillers are not waiting to use our natural resources. Over the past two years, more than 3,000 drilling permits were issued by the Department of Environmental Protection. That number is projected to skyrocket in 2010, with another 5,200 permits expected.

Every second without a severance tax means Pennsylvania misses out on needed revenue generated by these very profitable wells. In fact, the Pennsylvania Budget and Policy Center estimates the state has already lost more $91 million due to delays in passing the new tax.

That's money the state desperately needs. For starters, the natural gas wells across Pennsylvania require millions of gallons of water to be blasted into solid rock. This process, called Hydraulic Fracturing, can have a negative environmental impact, and the state needs the resources to deal with these potential problems. Local governments also need money to invest in the infrastructure needed to facilitate drilling, like roads and bridges.

But the best argument for the legislature to pass a severance tax is ... they said they would.  Back in June, the state legislature passed a budget that included the promise that it would pass the tax by October 1st. It's a safe bet that many lawmakers might not have voted for the budget -- which included no tax increases and steep cuts -- if it had not contained the promise to tax natural gas extraction.

Follow us on Twitter and review city services on our sister site, City Howl.

0 comments
We encourage respectful comments but reserve the right to delete anything that doesn't contribute to an engaging dialogue.
Help us moderate this thread by flagging comments that violate our guidelines.

Comment policy:

Philly.com comments are intended to be civil, friendly conversations. Please treat other participants with respect and in a way that you would want to be treated. You are responsible for what you say. And please, stay on topic. If you see an objectionable post, please report it to us using the "Report Abuse" option.

Please note that comments are monitored by Philly.com staff. We reserve the right at all times to remove any information or materials that are unlawful, threatening, abusive, libelous, defamatory, obscene, vulgar, pornographic, profane, indecent or otherwise objectionable. Personal attacks, especially on other participants, are not permitted. We reserve the right to permanently block any user who violates these terms and conditions.

Additionally comments that are long, have multiple paragraph breaks, include code, or include hyperlinks may not be posted.

Read 0 comments
 
comments powered by Disqus
About this blog
Every year, city government spends slightly more than $4 billion. Where does all that money come from? More importantly, where does it go? Are we getting the most bang for our tax buck? “It's Our Money” is a joint project between Philadelphia Daily News and WHYY, funded by the William Penn Foundation, designed to answer these questions.

It's Our Money contributors

Tips? Comments? Questions?
Contact:

Holly Otterbein:
215-854-5809
hm.otterbein@gmail.com
@hollyotterbein

It's Our Money
Also on Philly.com
letter icon Newsletter