Democrats Try Again for State Tax on Marcellus Shale

[Divernan]

http://www.post-gazette.com/pg/11039/1123916-503.stm

Democrats try again for state tax on Marcellus Shale
Tuesday, February 08, 2011
By Tom Barnes, Pittsburgh Post-Gazette

HARRISBURG -- Some Democratic legislators, aided by environmental groups, are making another try at enacting a severance tax on natural gas pumped from the vast areas of Marcellus Shale in Pennsylvania. Rep. Greg Vitali, D-Delaware, today proposed House Bill 33, which would impose a two-phase extraction tax. There would be a 5 percent levy on the gross sale value of each 1,000 cubic feet (mcf) of gas pumped from deep underground. There would also be a second tax, of 4.6 cents per mcf, which wouldn't vary according to the price of the gas.

Mr. Vitali estimated that if the tax is enacted this year, it would generate $245 million in 2011. That would rise to $320 million in 2012, $400 million in 2013 and $477 million in 2014, as the value of the natural gas and the amount of gas pumped rises, he estimated.

He would spend the money three ways: one third for the state general fund; one third for state environmental programs; and one third for county and municipal governments where the gas-producing sites are located.

The bill faces a tough time in the Legislature. Republicans, who control both chambers, generally oppose a severance tax on natural gas, as does Gov. Tom Corbett. Republicans also oppose using any of the severance tax funds to increase the state budget.





Read more: http://www.post-gazette.com/pg/11039/1123916-503.stm#ixzz1DOtfwK38

[Divernan]

1. Even Palin's Alaska and Bush's Texas have extraction taxes!

More from the linked article.
Mr. Vitali said that significant cuts in state education funding and a health program for lower-income people called adultBasic, along with other areas, are likely when Mr. Corbett proposes his fiscal 2011-12 budget on March 8. Some of the money from the severance tax could be used to compensate for such cuts, supporters said.

Environmental groups, such as the Sierra Club, Penn Future and Penn Environmental, liked the Vitali proposal to split one-third of the money among the Environmental Stewardship Fund, the Hazardous Sites Cleanup Fund, the Fish and Boat Commission and the Environmental Protection Department.

Democrats said Pennsylvania is the only major gas-producing state without a severance tax.

"Even Sarah Palin's Alaska and Texas, which has a Republican governor, has an extraction tax," said Sen. Daylin Leach, D-Montgomery. "This isn't some crazy liberal idea."

Former Gov. Ed Rendell, a Democrat, tried last year to get the Legislature to enact a severance tax, but couldn't reach a compromise.



Read more: http://www.post-gazette.com/pg/11039/1123916-503.stm#ixzz1DOtfwK38

[Divernan]

2. Prime Sponsor Vitale is an exceptionally hard-working & ethical politician.

I worked with him for 10 years in the State House before I retired. He was the only Representative in the Democratic Caucus who ALWAYS read all the bills before they came up for votes. When pending bills were reviewed in caucus, the other representatives lazily and shamefully relied on him to ask the tough questions, spot problems in the legislative language, etc. Of course, they usually voted according to their lobbyists' or Dem leadership's (DeWeese) instructions, but at least they understood the bills. I never saw Greg bought off by a lobbyist or cave to bullying by DeWeese or Veon. He voted a combination of his conscience and his constituents' best interests. He never had a prayer of getting into caucus leadership because he couldn't be bullied or intimidated or bribed. But his constituents were smart enough to keep returning him to office.

GO, GREG!

[Divernan]

3. Pennsylvania has lost $130 million by not passing a severance tax in October, 2009.

PLEASE CALL YOUR STATE REPS THIS WEEK TO SUPPORT HOUSE BILL 33!

Vitali was joined at the news conference by 17 other representatives, state Sen. Daylin Leach and a representative of state Sen. Andy Dinniman, who is gathering support for his own natural-gas severance tax legislation. Representatives of several environmental and outdoor groups attended the news conference. The bill has 57 co-sponsors.

The news conference featured a monitor, which showed a ticker from the Pennsylvania Budget and Policy Center showing that Pennsylvania has lost nearly $130 million by not enacting a severance tax when one was first introduced in October 2009.

"It’s important to emphasize that the goal is not to tax simply to punish an industry," said state Rep. Michael Gerber, D-Montgomery. "Many of us welcome the economic opportunity the industry presents, but we need revenue to protect the environment now and for years to come, to train Pennsylvanians for industry jobs and to support the local taxpayers who will bear the costs of an invasive industry."

"If we're going to win the future here in Pennsylvania, we need to have the revenue from the drilling tax to protect our environment and fund critical needs like our public schools," said state Rep. Steve Santarsiero, D-Bucks. "2011 needs to be the year we get this done."

[JPZenger]

4. Its a fee, not a tax

PA. has to call it a fee, or Corbett won't sign it. It is so Corbett can say he didn't break his no new taxes pledge.

In any case, PA is the ONLY state with a natural gas industry that does not charge a severance tax.

[blue neen]

5. I wonder if Tom Corbett spent any time during Super Bowl weekend

with his buddies from Range Resources?

All the Texas oil grifters helped finance his campaign...he'll never stand up to them.