Natural gas tax could hurt Pa
Gov. Tom Corbett sloughed off a poll Thursday that shows Pennsylvanians opposed to his steep education funding cuts and in favor of taxing the natural gas industry, arguing the tax would not end state budget woes but could alienate “a cornerstone of the future.”
“We didn’t campaign based on polls; we’re not governing based on polls,” Corbett said during a news conference after an appearance at the Greater Scranton Chamber of Commerce. “It’s not what we were elected to do.”
Corbett opposes the natural gas severance tax and his proposed 2011-12 budget cuts funding for public schools, higher education, public libraries and other education-related entities by $1.5 billion, or 15 percent.
A Franklin & Marshall College poll released Wednesday showed more than three-fifths of residents favor taxing natural gas production while more than three quarters oppose the education cuts.
Critics of Corbett’s budget argue a natural gas tax would not chase away the industry because Pennsylvania is the only state with no local or state severance tax and companies will not leave billions of dollars in potential profits in the ground.
But Corbett said he fears the industry will transfer gas well-drilling equipment and money for investment to other states where severance taxes on gas extraction might be lower if Pennsylvania imposes a severance tax on gas.
“It’s important to get this industry rooted in Pennsylvania,” he told reporters.
“I want them building their headquarters here,” he said during his speech to about 50 chamber members.
Corbett specifically defended the higher education cuts, which Penn State University President Graham Spanier has said could lead to higher tuition and closing of some Penn State satellite campuses.
“It’s Spanier that’s taking the fight to the students,” Corbett said. “He’s the one that, when hearing the budget, immediately said, ‘We’re going to put this on the backs of the students,’ where he’s been putting it the entire time.”
Over the last decade, Penn State has received $3.5 billion in state money while more than doubling tuition, the governor said.
“Who’s putting it on the back of the students?” he said.
Corbett said the painful cuts are necessary because of the $4.3 billion budget deficit he inherited from Gov. Ed Rendell, whose natural gas tax proposal, he noted, would have produced only $170 million next year.
“I think people lose sight of that,” he said of the inherited deficit. “That’s what I can’t lose sight of.”
Corbett reminded the chamber audience his budget is only a proposal and said he would listen to amendments, but said the bottom line for spending will be his proposed $27.3 billion.
“The final number of spending will not be above $27.3 billion or I will not sign the budget,” he said.
Corbett dismissed the argument that he did not ask businesses and corporations to sacrifice in his budget.
“First off, businesses and corporations have been sacrificing,” he said. “Their business has been so far down that they haven’t been able to employ people. … I’m not sure what you mean by them sacrificing. Does that mean more taxes? Well, you know where I am on more taxes.”
Corbett pointed to the elimination in his budget of legislative initiative grants – legislators’ money for special projects – that often went to companies.
Corbett’s budget reduces funding for the Department of Economic and Community Development – the source of many grants and loans for corporate and business development by $114 million, or more than a third of its 2010-2011 level. Much of that was money provided by one-time federal economic stimulus money.
“We have many corporations that come to us that are always asking us for more money,” the governor said. “We’re going to look at those very carefully. We have to reduce the spending there. And we have to let the free enterprise system work.”
Corbett told the chamber audience no one should be surprised that he opposes raising taxes because he promised that while campaigning for the office.
“I came straight out with what I said I’m going to do,” he said.
Corbett said the $20 million in funding that Rendell promised for renovating Lackawanna County remains under review. He declined to say if there is reason to think he would not approve the money.
“I’ve been so busy with this budget, that’s one that I haven’t really sat down and looked at,” he said.
Corbett also said he will name a transportation task force to examine ways of paying for transportation projects and mass transit within 30 days.
March 18, 2011
by Borys Krawczeniuk (Staff Writer)
bkrawczeniuk@timesshamrock.com
http://citizensvoice.com/news/corbett-natural-gas-tax-could-hurt-pa-1.1120478#axzz1GxRsqoZJ
Lawmakers discuss Marcellus Shale benefits
http://standardspeaker.com/news/lawmakers-discuss-marcellus-shale-benefits-1.1041896
Lawmakers discuss Marcellus Shale benefits
By JIM DINO (Staff Writer)
Published: October 3, 2010
The Marcellus Shale natural gas drilling project has the potential to ease Pennsylvania’s $3 billion budget deficit next year, but taxes and fees derived from the gas also have to protect the environment, local lawmakers said Friday.
State Reps. Eddie Day Pashinski, D-121; Neal Goodman D-123; Jerry Knowles, R-124; and Tim Seip, D-125, answered questions from members of the Northeastern Pennsylvania Manufacturers and Employers Association on Friday at Top of the 80s in West Hazleton.
Legislators were questioned on four topics: the 2011 budget deficit, taxes, transportation and energy.
Goodman started off by painting a bleak budget picture.
“Next year, we will have a minimum $3 billion budget deficit,” Goodman said. “The $2 billion from the Obama stimulus goes away, and there’s $850 million in medical malpractice in this year’s budget that may not be coming from the federal government. And we are $1 billion short on road and bridge money. It will be like this as long as the economy stays where it is.”
Pashinski said there are only five states in the black. “They are all energy-producing states,” Pashinski said.
And now, with the Marcellus Shale project, Pennsylvania will also become an energy-producing state, Pashinski said.
Pennsylvania must assess a severance tax, a tax on the gas that comes out of the ground, he said.
“Marcellus Shale is one of the richest gas fields in the world,” he said. “There are trillions of cubic yards of gas.”
A severance tax is in the natural gas industrial business model in every state except Pennsylvania, Pashinski said.
The House approved a bill last week setting a significant tax rate at 39 cents per thousand cubic feet, or mcf, of natural gas at the wellhead. Senate Republican leaders have proposed setting a severance tax rate at 1.5 percent during the first five years of a well’s operation before a 5 percent rate kicks in.
Goodman said he expected the tax – once the House and Senate get together on the issue – to end up being between 5 and 7 percent.
But he cautioned a good chunk of the money has to go to ensuring environmental protection, including hiring state Department of Environmental Protection inspectors.
Our area should have learned from what the coal industry did to the local environment, Goodman said.
“This is coal revisited,” Goodman said. “In the early 1700s, coal operators wanted to come in, and said ‘if you don’t let us come in, we’ll go to Kentucky or West Virginia, and come back here later.’
“But look at what happened. I know a place in Girardville where orange water oozes out of the ground.
“We are the Saudi Arabia of gas,” Goodman said. “This project will create 111,000 jobs. We have to be careful.”
Knowles said the tax should be fair.
“There are 23 to 28 shale deposits in the country,” Knowles said. “We don’t want them to abandon this project. These jobs start at $20 to $22 per hour. They are good jobs.”
One problem is, Pennsylvania residents are not trained or experienced enough in the field to get the jobs right now.
“They took an old valve plant in Bradford County and turned it into classrooms,” Knowles said. “We have to work with community colleges to increase the training.”
The taxes and fees from Marcellus Shale will raise an estimated $1 billion a year. While some want to put all of it into the state’s general fund, Seip wants to put half in the general fund, and the other half into transportation – mass transit, roads and bridges.
Seip suggested revamping the state’s sales tax law to tax more goods and services – raising $6 billion to $7 billion – to fund road and bridge repairs, and to replace the property taxes on primary homes.
“The sales tax law has not been revised since 1971,” Seip said.
His so-called Sales-tax Modernization Addressing Real Tax equality plan, or SMART plan, would subject the following items to the state’s 6 percent sales tax: Newspapers and magazines, advertising, catering, investment consulting, scientific research, and admission to theaters, museums and sporting events. High school sports would be exempt.
The legislators said property owners do get gaming funds toward reducing property taxes but often don’t realize it because the rebate comes in the form of a property tax reduction.
The legislators said Pennsylvania benefits much more than other states with gaming.
“New Jersey gets 9 cents on every gambling dollar, while Pennsylvania gets 55 cents,” Pashinski said. “About 34 cents goes into the general fund, 12 cents to save the equine industry, 5 cents toward tourism, the state’s second-largest industry, and 4 cents to local governments.”
Pashinski and Goodman said their constituents receive a $200 rebate on their property taxes every year from gaming.
Goodman said the 12 cents toward the equine industry is money well spent.
“We saved about 40,000 jobs and created another 8,000, (in the gaming industry)” Goodman said. “Dealers are making $35,000 to $40,000 a year.”
jdino@standardspeaker.com
Marcellus tax eyed to fill state budget shortfall
http://republicanherald.com/news/marcellus-tax-eyed-to-fill-state-budget-shortfall-1.942789
Marcellus tax eyed to fill state budget shortfall
BY ROBERT SWIFT (HARRISBURG BUREAU CHIEF RSWIFT@TIMESSHAMROCK.COM)
Published: August 12, 2010
HARRISBURG – Tapping revenue from a proposed natural gas severance tax is part of Gov. Ed Rendell’s plan to close a remaining gap in the new state budget.
The governor presented revenue-generating options that include $70 million from a severance tax, savings from a nearly 2 percent across-the-board spending cut and ending a 1 percent state vendor discount to legislative leaders for consideration Wednesday.
The meeting came one day after President Obama signed a $26 billion federal fiscal bill to aid cash-strapped states. That influx of federal aid leaves Pennsylvania with a revenue hole now estimated at $280 million in its $28 billion budget.
Rendell’s proposal also includes a $50 million reduction to the basic-education subsidy for school districts, which is one of the few items that received an increase in the new budget. But that would be offset by $387 million in federal aid to preserve teacher jobs to be distributed by the same method as the subsidy. The U.S. Education Department estimates that aid will support nearly 6,000 education jobs in Pennsylvania either by avoiding layoffs, rehires or new hires.
Severance tax revenues can help address state revenue needs, but a severance tax is also needed to deal with the impact of the drilling boom in the Marcellus Shale formation, said Rendell’s chief of staff, Steven Crawford.
“It is the right thing to do, knowing the stress this is bringing to local governments and conservation districts,” he said. “It’s about having the (natural gas) industry paying their fair share.”
House and Senate leaders have officially declared their intent to pass a severance tax by Oct. 1 and have it take effect Jan. 1, 2011, but many details have yet to be hammered out, such as the tax rate and revenue split between statewide and local uses.
The $70 million sum reflects what Rendell projects for a severance tax, said Senate Majority Leader Dominic Pileggi, R-9, Chester. The tax structure is undecided, and GOP senators want a large share of the revenue going to local municipalities and environmental programs, he said.
“Whether it results in $70 million going to the General Fund or not is an open question,” Pileggi said.
Both caucuses plan to review the governor’s proposal in the next few days, but the governor has leeway to decide what cuts he wants to make if an agreement isn’t reached.
A spokesman for the Pennsylvania School Boards Association warned against cutting the basic-education subsidy because of the new federal aid.
“State subsidy dollars can be used in many different ways, including purchasing education equipment and materials, while the federal education jobs money can only be used for compensation and benefits, so the two are not equal in our view,” said PSBA official Tim Allwein.
EPA’s Budget Proposal Seeks Efficiencies, Increased Environmental Protection
FOR IMMEDIATE RELEASE
February 1, 2010
EPA’s Budget Proposal Seeks Efficiencies, Increased Environmental Protection
Budget proposal aligned with Administrator Jackson’s key priorities
WASHINGTON - The Obama Administration today proposed a budget of $10 billion for the U.S. Environmental Protection Agency (EPA). This budget heeds the president’s call to streamline and find efficiencies in the agency’s operations while supporting the seven priority areas EPA Administrator Lisa P. Jackson outlined to guide EPA’s work.
“To meet our environmental challenges and ensure fiscal responsibility, we’re proposing targeted investments in core priorities. This budget cuts spending while promoting clean air, land and water, growing the green economy and strengthening enforcement,” said Administrator Jackson. ”The president’s budget is focused on creating the conditions that help American families, communities and small businesses thrive. Clean air, clear water and green jobs are rebuilding the foundations for prosperity in communities across the country.”
Budget Highlights:
Cleaning up communities: This budget includes $1.3 billion to address Superfund sites that may be releasing harmful or toxic substances into the surrounding community. Cleaning up these sites improves communities’ health and allows for these properties to be used for economic development.
In addition, $215 million is provided to clean up abandoned or underused industrial and commercial sites that are available for alternative uses but where redevelopment may be complicated by the presence of environmental contaminants. Revitalizing these once productive properties, known as brownfields, helps communities by removing blight, satisfying the growing demand for land, and enabling economic development. EPA will focus its efforts on area-wide planning and cleanups, especially in under-served and economically disadvantaged communities.
This budget also offers $27 million for EPA’s new Healthy Communities Initiative. This initiative will address community water priorities; promote clean, green, and healthy schools; improve air toxics monitoring in at-risk communities; and encourage sustainability by helping to ensure that policies and spending at the national level do not adversely affect the environment and public health or disproportionally harm disadvantaged communities.
Improving Air Quality: In addition to the funding provided through the Healthy Communities Initiative, this budget includes $60 million to support state efforts to implement updated National Ambient Air Quality Standards (NAAQS). EPA proposed stricter air quality standards for smog and nitrogen dioxide (NO2) and will work with states to help them meet those standards in the years ahead.
Building Strong State and Tribal Partnerships: This budget includes $1.3 billion for state and tribal grants. State and local governments are working diligently to implement new and expanded requirements under the Clean Air Act and Clean Water Act. New and expanded requirements include implementation of updated NAAQS and addressing emerging water quality issues such as nutrient pollution. In addition to the $25 million for greenhouse gas permitting and $60 million to support state efforts to implement updated NAAQS, the $1.3 billion for state and tribal grants includes $45 million for states to enhance their water enforcement and permitting programs. In order to help tribes move forward with implementation of environmental programs, $30 million is budgeted for a new competitive Tribal Multi-media Implementation grant program. To further enhance tribal environmental management capabilities, this budget also includes an additional $9 million for Tribal General Assistance Program grants.
Taking Action on Climate Change: This budget contains more than $43 million for additional efforts to address climate change and work toward a clean energy future. EPA will implement the greenhouse gas reporting rule; provide technical assistance to ensure that any permitting under the Clean Air Act will be manageable; perform regulatory work for the largest stationary sources of greenhouse gas emissions; develop standards for mobile sources such as cars and trucks; and continue research of carbon capture and sequestration technologies.
Protecting America’s Waters: This budget broadens efforts to clean up America’s great waterbodies. It provides $63 million for efforts to protect and restore the Chesapeake Bay and $17 million for the Mississippi River Basin to respond to non-point source control recommendations of the Nutrients Innovation Task Group and implement recommendations outlined in the Gulf of Mexico Hypoxia Action Plan.
This budget also invests $3.3 billion to maintain and improve outdated water infrastructure and keep our wastewater and drinking water clean and safe. This is in addition to $6 billion in funding provided to states through the American Recovery and Reinvestment Act (ARRA).
Assuring the Safety of Chemicals: This budget calls for $56 million for chemical assessment and risk review to ensure that no unreasonable risks are posed by new or existing chemicals. This budget also invests $29 million (including $15 million in grants funding) in the continuing effort to eliminate childhood lead poisoning, and $6 million to support national efforts to mitigate exposure to high-risk legacy chemicals, such as mercury and asbestos.
Expanding the Conversation on Environmentalism and Working for Environmental Justice: This budget contains $8 million for environmental justice programs. It targets increased brownfields investments to under-served and economically disadvantaged neighborhoods, and proposes $9 million for community water priorities in the Healthy Communities Initiative, funds that will help under-served communities restore urban waterways and address water quality challenges. EPA is committed to identifying and addressing the health and environmental burdens faced by communities disproportionately impacted by pollution. This commitment is fulfilled through the agency’s efforts to give people a voice in decisions that impact their lives and to integrate environmental justice in EPA programs, policies and activities.
More information: http://www.epa.gov/budget
CONTACTS:
Enesta Jones (Media Inquiries Only)
jones.enesta@epa.gov
202-564-7873
202-564-4355
Lina Younes (Public Inquiries Only)
younes.lina@epa.gov
202-564-9924
202-564-4355