Marcellus Shale tax likely? Even Republicans think so

Slick Willie Sutton was a bank robber in the early-to-mid 20th century and when a reporter once asked him why he robbed banks, he answered with disdain.

“Because that’s where the money is,” Sutton is quoted as saying.

Lawmakers trying to plug a billion dollar budget hole are likely to tax Marcellus Shale drillers for the same reason; because that’s where the money is.

The budget wrangling is well underway and the spending plan is due June 30.

The two parties and four caucuses aren’t agreeing on much these days. Ask a simple question, like will the budget be done on time, and you get contrarian answers.

“I don’t think so,” said Representative Madeleine Dean (D-Montgomery) who is on the House Appropriations Committee, which moved a budget bill out of committee Wednesday, though it’s only a vehicle for the real budget plan that has not yet been hashed out by leaders.

Representative Dan Moul (R-Adams) is confident the budget will be done on time.

“It’s important that the governor keeps his string of on-time budgets alive and well,” Moul said.

Both sides aren’t agreeing on whether the budget will make the deadline, but they do agree that there’s a deficit of about $1 billion.

There also seems to be growing consensus that one of the fiscal fixes will be a drilling tax. Some say it’s inevitable. Dean’s bill – House Bill 2020 – would tax gas extraction at five percent.

“We need to capture those revenues,” Dean said. “It’s constitutionally the right thing to do. They are our resources, but obviously in a budgetary crunch we must do it.”

It’s hardly news when a Democrat calls for an extraction tax. They’ve been doing that for years. But the headline at the Capitol Wednesday is that conservative Republicans seem to be open to the idea. Moul says he could vote for a tax as long as it’s similar to what surrounding states are charging drillers.

“We don’t want to be known for having the highest one (drilling tax). We don’t want to chase anybody out of Pennsylvania,” he said. “If they put something on the table that’s reasonable, they might have the votes for that.”

That is an about-face from the previous position held by House Republicans.

Even Governor Corbett’s stance seems to be softening. He was once vehemently opposed to any sort of tax on drillers. Wednesday, his spokesman said this: “The governor will consider ANYTHING (our emphasis) but he wants pensions and he wants liquor FIRST (our emphasis).”

So, if lawmakers can craft pension reform and a form of liquor privatization or modernization, the governor might swallow hard and sign off on a drillers tax. House Republicans agree with Corbett. Sources say they won’t just agree to a Marcellus tax without getting some of its priorities in return.

That’s fairly standard June fare and the push-pull of negotiations. But it is significant that Republicans are showing a way forward to a drilling tax.

“Some of our members have an interest in seeing liquor privatization,” said Representative Stan Saylor (R-York), the majority whip in the House. “They think that’s an ultimate thing, that government needs to get out of before they start taxing other businesses.”

But make no mistake, Marcellus is in play this budget season more than it’s been in any other. Some lawmakers are saying privately that there will be no choice but to raise taxes on drillers to make ends meet in Harrisburg..

There’s 19 days left and lots of dollars to find.

“The only things I think are off the table would be a sales tax, and a personal income tax,” said Representative Glen Grell (R-Cumberland), on the Appropriations Committee. “The big, broad based taxes are off, but all of those other taxes are on the table and being discussed.”

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