Shale Daily / NGI All News Access

Pennsylvania Lawmakers Ignore Calls for Severance Tax

The Pennsylvania House on Tuesday and the Senate on Wednesday separately voted in lame duck sessions to override Gov. Ed Rendell's veto of an education bill. However, the severance tax on gas drillers that Rendell and some lawmakers had sought for more than two years was never considered.

"After nine months of assurances by the leadership of the Pennsylvania state Senate that no votes would occur after the November election, and five months after the leadership promised to pass a severance tax on deep natural gas drilling in the Marcellus Shale, the Senate violated both promises [Wednesday] by voting to override a veto on a bill but refusing to consider the tax on drilling," said Jan Jarrett, CEO of Citizens for Pennsylvania's Future (PennFuture).

"It looks as if Senate leaders never intended to keep faith with their constituents and pass the severance tax," Jarrett said. "And the high-minded rhetoric about not holding a lame duck session as a good government measure was nothing but talk."

In fact, the proposed severance tax had drawn wide support, not only from Democrats. In October the Marcellus Shale Coalition had said it was "regretful that...commonsense legislative initiatives" had not been adopted by the state (see Shale Daily, Oct. 26).

Following months of wrangling and cajoling by Rendell, a Democrat, and members of both parties, the governor declared the severance tax dead and blamed GOP lawmakers for failing to "negotiate in good faith" (see Shale Daily, Oct. 22).

Jarrett said without a severance tax, "money is lost to Pennsylvania's citizens and communities, with more than $107 million lost to the commonwealth so far. Meanwhile, our state budget is straining, 'Growing Greener' funding has all been spent, the Fish and Boat Commission and Game Commission are struggling, and -- perhaps worst of all -- the municipalities that host the drillers are forced to look under the couch cushions for money to deal with the strain drilling is putting on their communities. This tax is desperately needed, and the members of the Senate decided to turn a deaf ear to that desperation."

The state's current budget, said Jarrett, "is out of balance because it relied on revenue from the promised severance tax. There are no new revenues anywhere in sight. And the drillers will continue to laugh all the way to the bank knowing they can play Pennsylvanians for suckers while they pay the tax everywhere else they drill."

Gov.-elect Tom Corbett, a Republican, takes office in January. Corbett pledged during his campaign not to raise any taxes, which would include enacting a severance tax. Earlier this month he said he was appointing a task force to advise him on "reasonable" drilling practices (see Shale Daily, Nov. 15).

Comments powered by Disqus