House Democrats push for severance tax
HARRISBURG – Facing an uphill political climb, a group of House Democratic lawmakers said Tuesday that a state government facing a $4 billion deficit can’t afford not to levy a state 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 fee 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.
The bill is supported by Reps. Sid Michaels Kavulich, D-114, Taylor, and Eddie Day Pashinski, D-121, Wilkes-Barre.
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.
Kavulich said the revenue also could help alleviate some of the state budget cuts that are expected to be proposed by Corbett.
He criticized impact fees for creating new problems for local governments and a fragmented approach to dealing with drilling activities.
The natural gas industry has had two years to establish itself in Pennsylvania and now must pay its fair share, Pashinski said.
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)
Published: February 12, 2011
http://standardspeaker.com/news/house-democrats-push-for-severance-tax-1.1103702