House Democrats renew severance tax pitch

HARRISBURG – Facing an uphill political climb, a group of House Democrats said Tuesday that a state facing a $4 billion deficit can’t afford not to levy a severance tax on natural gas production.

They gathered at a press conference to revive legislation that at one point appeared close to passage last year, but whose prospects have faded greatly with a Republican-controlled statehouse. The measure sponsored by Rep. Greg Vitali, D-166, Havertown, would levy a tax at 5 percent of the value of each 1,000 cubic feet of gas produced, plus 4.6 cents per thousand cubic feet extracted. An estimated $245 million in first-year revenue would be distributed in one-third chunks to environmental programs, local governments and the state general fund.

Republican Gov. Tom Corbett is opposed to a severance tax, while Senate GOP leaders have floated the idea of giving local governments authority to levy impact fees on natural gas firms to offset the cost of drilling activities on public infrastructure and the environment.

However, Rep. Dan Frankel, D-23, Pittsburgh, said it makes no sense given the deficit not to consider tapping revenue from a severance tax.

“The revenue could also help alleviate some of the devastating state budget cuts that are expected to be proposed by Gov. Corbett,” said Sid Michaels Kavulich, D-114, Taylor.

Senate Republican leader Joseph Scarnati, R-25, Jefferson County, is willing to support an impact fee as part of a package addressing a number of Marcellus Shale drilling issues, said Scarnati aide Drew Crompton.

While not commenting directly on the severance tax issue, the Marcellus Shale Coalition, an industry trade group, said it wants policies that encourage capital investment in the natural gas industry and create jobs.

by robert swift (harrisburg bureau chief rswift@timesshamrock.com)
Published: February 9, 2011
http://republicanherald.com/news/house-democrats-renew-severance-tax-pitch-1.1102254