Pennsylvania lawmakers renew push for gas-drilling tax

With a looming Pennsylvania budget deficit estimated at more than $4 billion, some local Democratic state lawmakers sought Wednesday to inject renewed interest in taxing natural-gas drilling.

Although a similar effort failed last year despite better political odds, Democrats hope the tax will gain favor as the Republican-controlled legislature considers budget cuts in an effort to preserve Gov. Corbett's pledge not to raise taxes.

"The major driver is the $4 billion shortfall," said Rep. Greg Vitali (D., Delaware), the prime sponsor of a bill to enact a severance tax on gas drillers. "There's going to be more and more pressure to adopt this tax."

"We have to keep pushing," said Rep. Tim Briggs (D., Montgomery), one of 57 cosponsors of the measure. "We passed it out of the House with bipartisan support last year. . . . It's going to be difficult [this year], but a majority of Pennsylvanians, 62 percent in a recent poll, support a tax on natural-gas drilling."

Vitali made his pitch Wednesday at a House Democratic Policy Committee hearing in King of Prussia attended by a handful of local House members. Several interest groups testified, but gas-drilling representatives declined to appear, Vitali said.

Last year, the Democratic House approved a tax equivalent to about 10 percent, but Senate Republicans pushed for a rate of 1.5 percent that would go up to 5 percent after five years. In October, Rendell said bill was dead because an agreement couldn't be reached.

Corbett, who received more than $875,720 in campaign contributions from the gas industry, has said he opposes a tax but might consider a fee for gas drillers.

Vitali's proposal was referred Feb. 9 to the Finance Committee. He said no hearing had been scheduled, adding: "I honestly don't expect there to be. I think this bill is a vehicle to bring attention to this issue."

The measure would tax drillers' revenue at 6 percent. A third of the amount would go to the state's general fund, a third to county and municipal governments, and a third to environmental groups.

Pennsylvania ranks 12th of 33 states that produce natural gas, contributing about 1.3 percent of the nation's supply in 2009, according to Michael Wood, research director of the Pennsylvania Budget and Policy Center, a nonprofit, nonpartisan Harrisburg group. Pennsylvania is the only one of the top 15 natural-gas-producing states that does not tax gas extraction.

Wood told the committee that the proposed tax would generate close to $400 million annually by 2015.

The tax revenue targeted for environmental programs could help those running low on money, such as the Growing Greener Program. That program has protected more than 33,000 acres of farmland and restored more than 1,600 acres of abandoned mine land. The program, which received $200 million in 2007 and 2008, expects to have as little $15 million next year because of budget cuts, Andrew Heath, executive director of the Renew Growing Greener Coalition, told the committee.

"This will kill the Growing Greener Program," he said.

John A. Arway, executive director of the Pennsylvania Fish and Boat Commission, said environmental groups needed additional money to better police gas drillers' activities and protect the environment.

"We just do not have enough people or enough hours in a day . . . to help companies design and implement their projects in ways that have the least impact on our commonwealth's natural resources," he said.