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Sen. Stack: Local Impact Fee Not the Answer; Pass Natural Gas Extraction Tax
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Sen. Mike Stack (D-Philadelphia) and several southeastern Pennsylvania lawmakers this week called on the governor and the General Assembly to enact a natural gas extraction tax that benefits all Pennsylvanians. “We are the only gas producing state that does not impose a natural gas extraction tax. Considering our state’s dire fiscal situation, there’s something seriously wrong with this picture,” Sen. Stack said. “The people of Pennsylvania and many legislators support this tax. The only one who seems to be steadfast in the corner of the natural gas drillers is our governor.”
During a capitol news conference, Sen. Stack explained that the country’s top four natural gas producers are collecting hundreds of millions of dollars in extraction taxes.
In 2010, Texas collected $1.7 billion; Wyoming collected $721 million; Oklahoma collected $743 million and New Mexico collected $654 million.
Border state West Virginia is also benefiting from natural gas, collecting $417 million last year.
“At a time when the state is facing a multi-billion-dollar deficit, severe cuts to education and social services, and a growing transportation infrastructure crisis, a natural gas tax is not only fair, it’s common sense,” Sen. Stack said. “The gas industry is expecting huge profits, so a severance tax is fair in exchange for taking our natural resources.”
Sen. Stack said Sen. Joseph Scarnati’s (R-Jefferson) proposal to impose a local impact fee on gas drillers does not go far enough.
No other gas-producing state has a local impact fee.
According to Sen. Scarnati’s proposal, the natural gas drillers would contribute up to $25,000 a year in taxes — the equivalent of seven days of production.
The impact fee could generate up to $121 million in revenue this year and retroactively from 2010 under Scarnati’s plan.
“Under this weak plan, gas drillers essentially pay for one week’s worth of product and profit the entire rest of the year. That’s a drop in the bucket,” Sen. Stack said. “If we had the guts to enact a true tax, we could ensure that affected municipalities and the entire state benefit from natural gas drilling.”
Sen. Stack noted that revenue from state’s 10 casinos benefits the entire state, as well as local municipalities where the casinos are located. In addition, the fines collected from the City of Philadelphia’s red light camera enforcement are equally distributed between the city and the state.
“If we’re willing to tax the gaming industry, and we’re willing to evenly divide red light camera fines between Philadelphia and the rest of the state, why can’t we impose a tax on the natural gas industry that benefits all Pennsylvanians?” Sen. Stack said. “The drillers won’t flee the state if we impose a tax on them. Drilling company executives have admitted as much at recent Senate Democratic Policy hearings.
“Arkansas is actually considering raising its severance tax. They’re not fearful that the gas drillers there will flee,” Sen. Stack said. “The natural gas industry came to Pennsylvania because there’s a demand for natural gas. That’s why the legislature must to stand up collectively, on behalf of the citizens who elected us to serve them, to enact a natural gas extraction tax.”
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5/16/2011 |
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