Disagreements Delay Proposed Marcellus Shale Gas Tax
Pittsburgh Post-Gazette
15 June 2010
By Tom Barnes
HARRISBURG -- Two disputes are delaying the state House from approving
a new tax on natural gas pumped from areas of Marcellus Shale in the
state.
The disagreements are over exactly how to structure a "severance tax"
and how to spend the money that would be generated, state Rep. David
Levdansky, D-Forward, said today.
House Bill 325, the fiscal 2010-11 tax bill that's now being discussed
by the Appropriations Committee, envisions a two-part gas tax, he said.
It would levy an 8 percent tax on the value of the all gas pumped from
the wellhead, plus another tax of 8 cents per thousand cubic feet of
gas extracted from the ground.
But Mr. Levdansky favors another approach. He wants to have a tax of 35
cents per thousand cubic feet of gas extracted, but to have no tax on
the value of gas from the wellhead. He said it would be simpler,
wouldn't require as much gas metering equipment and wouldn't vary up
and down with changes in the price of the natural gas.
House Democrats, who control the chamber, also differ on how to spend
the $100 million or so in annual severance tax revenue that would
result. Rep. Dwight Evans, D-Philadelphia, favors giving 80 percent of
the new tax revenue to the state general fund, to help erase a budget
deficit approaching $1.5 billion. Another 12 percent would go to local
municipalities where natural gas wells are located, to help them pay
for road repairs and other costs, and the rest would go to
environmental protection.
Mr. Levdansky said he favors a 50-50 split, with half the tax money
going to the state and the other half split between municipalities and
environmental protection. Another variation would be to give the first
$50 million in tax revenue to the state general fund, with the 50-50
split used for anything above $50 million.
A number of environmental groups, including Penn Future and the Sierra
Club, appeared with Mr. Levdansky today, saying they will press
legislators to enact a "fair" tax on the gas industry as part of the
2010-11 state budget, which is supposed to be enacted by June 30.
However, gas drilling industry officials oppose the new Marcellus tax,
or else want it to be as low as possible, and have contributed to the
campaign coffers of some legislative leaders seeking to postpone
enactment of the tax.
The environmental groups also said they will press the state Senate to
approve House Bill 2235, which has passed the House. It calls for a
three-year moratorium on leasing additional state forest land for gas
drilling.
Bureau Chief Tom Barnes: tbarnes@post-gazette.com or 717-787-4254.