Lawmakers looking for funds to balance budget call for natural gas tax

HARRISBURG, Pa. (WHTM) – There are pools of natural gas beneath Pennsylvania’s rolling hills and dales.

But to some state lawmakers there’s gold in them thar’ hills.

“It is part of our public estate,” said Representative Madeleine Dean (D-Montgomery) at a rally late last week in the Capitol. “And in any one year the industry takes for profit as much as ten billion dollars out of the ground.”

She was speaking as part of the pro-union CLEAR (Coalition of Labor Engagement and Accountable Revenue) rally calling for an extraction tax on Marcellus Shale drillers in Pennsylvania. The group insists that had their been an extraction tax since 2009, state coffers would be $2 billion richer. That’s a significant number since the state’s facing a $2 billion deficit and still looking for ways to fund the $32 billion, 2017-18 budget it passed just last week. The ralliers say the answers easy and wonder why the legislature continues to pass on gas.

“We have something here that is a bountiful natural resource,” said Senator Judy Schwank (D-Berks). “Let’s use it wisely but lets also think to it as something we can use to benefit every single one of us.”

Senator Vincent Hughes (D-Philadelphia) said legislative leaders promised then-Governor Ed Rendell that an extraction tax was coming in October, 2010. It was supposed to be a done deal. Except it wasn’t and seven years later it’s all but been extracted from the revenue conversation.

“It’s wrong,” Hughes said with his typical preacher passion and cadence. “It is wrong. It is wrong. It’s morally wrong, financially wrong that this one major industry has been able to take a walk, take a walk for years, while everybody else is making their fair and appropriate contribution.”

“That’s a total crock,” responded Dave Taylor, President of the PA Manufacturing Association, whose members rely on cheap energy. “This industry is paying every tax there is.”

Taylor points out that the natural gas industry pays an impact fee, which had an effective tax rate of 9 percent last year. He says piling on more taxes is nearsighted and short changing the PA economy.

“The manufacturing sector that’s waiting to be born will be bigger than the drilling by several orders of magnitude,” Taylor said. “And that’s what these politicians are willing to forfeit to smash and grab and take money now rather than care for the industry and see to it that it grows.”

Despite deficits and debt in PA’s finances, legislative leaders will not further burden drillers with a tax. Even though a majority of their constituents support it. Even though a majority of lawmakers might too and not just Democrats.

“I guarantee you there would be 50 or 60 Republicans in the House that would vote for something that’s reasonable and responsible,” insisted Representative Gene DiGirolamo (R-Bucks). “Let’s get the bill up for a vote. We need this in Pennsylvania,” he said to thunderous applause.

But it won’t happen.

And it shouldn’t happen, say many conservative lawmakers, who feel the state wouldn’t need to look for new sources of cash if it stopped spending so much of it.

Industry supporters also note that gas drilling does benefit all Pennsylvanians with cheaper energy bills.

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