TL: The Pennsylvania House on Wednesday approved a bill that would impose the state’s first-ever tax on natural gas extraction, advancing a plan to split the proceeds among the state’s general fund, environmental programs and local governments....The 104-94 vote was a major step toward collecting revenue from the drilling boom in a wide swath of the state that overlays the Marcellus Shale gas formation.
What Does Severance Tax Mean?
A tax imposed on the removal of nonrenewable resources such as crude oil, condensate and natural gas, coalbed methane and carbon dioxide.
But they came up with a convoluted formula on how to use the proceeds as this chart from the Commonwealth Foundation documents. This should be a lot simpler with money going into the general fund and the remainder being dedicated to the DEP to deal with the inspection, regulation and inevitable clean up operations from this activity. But just like the slots money that was sold as a way to reduce property taxes our salons in Harrisburg look on this as another pot of gold to be spread around.
Predictably, Republicans are objecting as their world view seems to be there should not be any taxes on businesses of any kind. Nobody likes paying taxes but as a wise man once said "Taxes are the price we pay for civilization." I think the Yonk would agree with that.
The industry has no problem spreading around campaign cash instead of paying taxes. Since 2001 they have dropped $3 million into political campaigns and spent another $5 million for lobbying.
According to the website Marcellus Money, the top recipients of driller campaign cash during the past decade include: Attorney General and GOP gubernatorial candidate Tom Corbett ($372,000), Lt. Gov./Senate GOP leader Joseph Scarnati ($117,000), Democratic Gov. Ed Rendell ($84,000), Democratic gubernatorial candidate Dan Onorato ($74,000).
Local lawmakers receiving contributions include Senate Minority Leader Robert Mellow, D-Peckville ($7,000), Sen. Lisa Baker, R-Lehman Township ($1,500), Sen. John Gordner, R-Berwick ($1,300), House Majority Leader Todd Eachus, D-Butler Township ($1,250), Rep. Ed Staback, D-Archbald ($500), Rep. John Yudichak, D-Nanticoke ($250) and Rep. Karen Boback, R-Harveys Lake ($250)
Boback gave back the money. Good for her.
The production of gas from the Marcellus Shale has exceeded the expectations of the industry itself so these warnings that a tax on them will drive them out of the state is nonsense. The gas is under our feet and if they want it they will pay a fair premium to the people of Pennsylvania.