Senate Democrats want changes to impact fee bill
By Caleb Taylor | PA Independent
HARRISBURG — With a week remaining until the state budget is expected to be passed, the debate over a potential fee on natural gas drilling is heating up.
Senate Democrats on Wednesday called for a higher impact fee on the drilling companies, while a fiscally conservative organization argued that the proposed “impact fee” should be counted as a tax.
“I do not want another budget season to pass without a responsible Marcellus shale impact fee in place,” said state Sen. John Yudichak, D-Luzerne.
Gov. Tom Corbett is opposed to including a gas drilling fee in the state budget, but Democrats and some Republicans in the General Assembly are stepping up their efforts to include it.
Yudichak’s amendment to the bill, introduced by Senate President Joe Scarnati, R-Jefferson, would increase the base fee from $10,000 to $17,000 per well with some adjustments for productivity and volume. Yudichak said his plan would produce $205 million in revenue in the first year and $260 million in the second, with revenue jumping to more than $450 million by the fifth year as the industry increases production.
The revenue in the amendment would be divided between local governments, receiving 55 percent, and various environmental and infrastructure projects, receiving 45 percent. Ten percent of the funding distributed to local governments would go to areas without drilling activities but with pipelines or other facilities involved in the transportation of natural gas.
“Every poll that has ever been done (on an impact fee) has shown that (voters) support some type of fee or some type of legislation where the money is shared,” said state Sen. Andrew Dinniman, D-Chester.“Our Republican colleagues, they read polls and understand this just like we do.”
In Scarnati’s proposal, the local government revenue would remain in parts of the state where drilling is taking place. If a municipality banned drilling, it would not be eligible to receive revenue of the fee.
Americans for Prosperity, a conservative lobbying organization in Washington, D.C., released a statement Wednesday condemning an impact fee as a new tax. An involuntary financial assessment, by any name, is a tax, said Sam Rohrer, Pennsylvania’s director of Americans for Prosperity.
“Call it what they like but the proposed ‘impact fee’ coming from proponents in the House and Senate is nothing short of a new tax,” said Rohrer.
Despite the fact that it contains adjustments for value and production, Yudichak said Wednesday that his new amendment should count as a fee and not a tax.
According to a Quinnipiac poll released this past week, 69 percent of voters support a new tax on companies drilling for natural gas. Also, 55 percent of voters opposed tax increases.
Earlier this week, Corbett said he would veto a state budget that included a tax or fee on natural gas. He prefers to wait until the Marcellus Shale Advisory Commission – an executive body created by the governor – completes its work at the end of July.
However, Scarnati has repeatedly said the impact fee should be considered along with the budget.
Patrick Creighton, spokesman for the Marcellus Shale Coalition, a natural gas industry group, said the impact fee concept is “certainly something we are willing to take a look at” but that the specifics were up to lawmakers in Harrisburg and Corbett’s Marcellus Shale Commission, which was formed to examine the impact of the natural gas industry in Pennsylvania.
