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Future of the impact fee: Local Republican officials say it could disappear after the Nov. 4 election

TOWANDA — The elimination of the impact fee, which could occur if Democrat Tom Wolf were elected governor, would be “devastating” for townships in Pennsylvania’s Marcellus Shale region, the president of the Bradford County Township Officials Association said Thursday at a press conference in Towanda.

State Rep. Tina Pickett, Bradford County commissioners Doug McLinko and Daryl Miller, and other local Republican officials spoke in front of the Bradford County Courthouse at the press conference, which was held to raise awareness about the future of the impact fee on gas drilling and how it could be affected by the Nov. 4 election, and the consequences that would occur if the fee were eliminated.

Under Act 13, if a severance tax on gas drilling were enacted in Pennsylvania, the impact fee — most of whose revenue is directed to counties and municipalities that are affected by gas drilling — would be automatically repealed.

Gov. Tom Corbett supports the impact fee and is against any kind of severance tax, whereas his Democratic opponent, Tom Wolf, has called for a severance tax, Republican officials said at the press conference.

The press conference was part of the Pennsylvania Republican Party’s statewide Day of Truth campaign, which was intended to raise awareness about the future of the impact fee and the consequences of its loss.

Voters need to be mindful of how they vote in November “because it could affect rural counties in Pennsylvania much more than they imagine,” McLinko said.

Townships in the Marcellus Shale use revenue from the impact fee to undertake road work, to upgrade their road maintenance equipment and purchase additional equipment, and to undertake sewer and water projects, said Wyalusing Township Supervisor Marvin Meteer, who also serves as the president of the Bradford County Township Officials Association.

Related: Marcellus production rates expected to grow in November

While gas companies have rebuilt roads in the Marcellus Shale region, there are other roads that municipalities are responsible to maintain, he pointed out.

In Bradford County alone, townships and boroughs last year received over $7 million in revenue from the impact fee, he said.

“For us (townships in Pennsylvania’s Marcellus Shale), to lose the impact fee at this point would be devastating,” said Meteer. “Local governments are very limited when it comes to ways they can increase their revenue. This would be lost revenue that can’t be made up for in other ways.”

Pickett talked about how the impact fee was intended to address the impacts of gas drilling on communities in the Marcellus Shale, including the impact on housing.

When the gas industry arrived several years ago in Pennsylvania’s Northern Tier, there was a huge influx of people who needed places to stay, but “there wasn’t a lot of extra housing, if any (of that existed),” she said.

Consequently, as a result of the law of supply and demand, “the cost of housing went very high, which put renters, and even people buying a home, in a very difficult position,” she said.

Pickett pointed out that some of the revenue from the impact fee goes to the Pennsylvania Housing Finance Agency, “which returns it to us (counties in the Marcellus Shale) to develop new housing,” she said.

New housing projects funded by the impact fee are occurring in Wyalusing, Towanda, Sullivan County and other places, she said. “(These are) good projects that help people have good housing at a reasonable cost,” Pickett said.

Bradford County Commissioner McLinko expressed doubt that Bradford County would be able to complete its planned $20 million training facility for first responders if the impact fee were eliminated.

He said the county has used revenue from the impact fee to eliminate its debt, to invest in local parks, and to provide a $10,000 donation to every fire company and volunteer ambulance service in the county to use as they see fit.

“We hope to continue” to make donations to the fire and ambulance companies with money from the impact fee, he said.

The county has also used money from the impact fee for numerous other purposes, including spending over $1 million on upgrading equipment used by employees in the county’s 911 center, he said.

And in the future, the county will be starting a program where it will use impact fee money to provide low- or no-interest loans to boroughs and townships to jump-start projects they want to do, he said.

When the pace of drilling increases in the future, the impact fee will be needed to pay for measures to address the impacts that the increased drilling will have on the county jail and the Bradford County Human Services Department, because otherwise the taxpayers will have to pay for those measures, he said.

One of the arguments that is being made in favor of enacting a severance tax is that every other major gas producing state in the country has a severance tax, Troy Borough Council President Krystle Bristol said.

However, Bristol pointed out, Pennsylvania has a 9.9 percent corporate net income tax, which is the highest in the nation, as well as a 1.89-mil capital stock & franchise tax. Pennsylvania is the only state to have both a corporate net income tax and a capital stock & franchise tax, she said.

Bristol said that she had initially been opposed to the impact fee because she felt that “all the industries were paying enough with those two taxes.”

However, at the time, it appeared inevitable that some sort of tax, such as a severance tax, was going to be levied on Pennsylvania’s gas industry, and the impact fee was the best compromise available, she said.

Troy Borough has used over $200,000 it has received from the impact fee over the last three years to fix roads, repair a bridge, and purchase a new cruiser for its police department, some of which would not have been able to have been accomplished if the revenue from the impact fee had not been available, she said.

Bristol also said that if a severance tax is enacted, Bradford County would have a difficult time getting a share of the revenue that would be raised by the tax.

Revenue from the severance tax would go into the state’s General Fund, she explained.

“It will be wasted downstate,” she said. “We would have to plead with Harrisburg (for a share of the severance tax revenue). And that has not gone well in the past” when Bradford County has sought other revenue from Harrisburg, she said.

Miller also expressed doubt that much revenue from a severance tax would be coming back to Bradford County.

“The severance tax will go to Harrisburg,” Miller said. “Does anybody believe that it will come back here in any meaningful way?” Miller asked rhetorically.

Meteer also addressed statements made by some candidates that the impact fee could be reinstated after a severance tax was enacted.

“We’d be starting at ground zero” in trying to resurrect the impact fee, Meteer said. “Everyone would want a piece of the pie.”

Meteer added that the “pie” has already been divided, with much of the revenue going to “where it needs to go, to the municipalities where the impacts are being felt.”

Wolf would use revenue from a severance tax to pay for education funding, according to McLinko.

While county officials had in the past talked about a much lower cost estimate for the training center for first responders, the project, with all phases included, is now estimated to cost about $20 million, Miller said.

 

James Loewenstein can be reached at (570) 265-1633; or email: jloewenstein@thedailyreview.com. 

2 comments

  1. Good! Can’t wait. The severance tax is a better deal, at least for Greene County, the poorest in the Commonwealth.

  2. I can’t see why the 2 other commissions don’t call out McLinko on his “gas drilling has not caused one case of contamination” denial. For God’s, sake there have been 243 confirmed cases, and this Bozo keeps saying things like that. It’s shameful to have someone that ignorant in such a high office.

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