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Editorial: A natural gas drilling tax is fair, sensible

If Republican state lawmakers do not pass a severance tax on natural gas drillers, they’ll be bucking the wishes of a solid majority of Pennsylvanians.

And they won’t have a recalcitrant governor to blame this time around.

During Tom Corbett’s first and only term, the natural gas industry boomed in Pennsylvania, yet he stubbornly rejected calls — even from within his own GOP — for a fair severance tax on companies drilling in the Marcellus Shale formation.

We remain the only large, natural-gas producing state that does not tax drillers removing this precious natural resource — even after budget cuts and fee increases have further burdened average Pennsylvanians.

Gov. Tom Wolf, fresh off his inauguration last month, made good on a campaign promise this week by unveiling natural-gas drilling tax he says will generate as much as $1 billion a year, with the “lion’s share” dedicated to education funding.

The plan calls for a 5 percent severance tax on the value of the gas, plus 4.7 cents per thousand cubic feet of gas extracted from the Marcellus Shale.

Critics say Wolf, a Democrat from York County, is over-estimating the tax’s revenue potential.

Related: Wolf severance tax keeps impact fee distribution

But even if the amount is as low as, say, $675 million — one estimate reported late last year — it would still be significantly higher than revenue from the impact fee Corbett opted for in place of a severance tax.

The Pennsylvania Budget and Policy Center estimates the impact fee will bring in $270 million in 2015-16.

York and other non-gas producing counties in Pennsylvania receive a share of those fees for use on transportation, conservation and outdoor recreation projects — and that might stop under a severance tax.

However, we think easing the burden on school taxpayers would be a fine trade-off.

New state Rep. Kristin Phillips-Hill, R-York Township, argued a tax dedicated to school funding simply “throws more money at the problem.” She said lawmakers need to deal with issues such as pensions and prevailing wages that drive up costs for school districts.

We say: Why not all of them above? Yes, those issues need to be addressed, but that doesn’t mean gas drillers should get a free pass.

They are not going to leave if Pennsylvania passes a severance tax, another argument we hear often. There aren’t too many options for natural gas drillers, and all of the others already collect a severance tax.

A severance tax makes sense and is fair — which is probably why a solid 61 percent of Pennsylvanians support it, according to a recent Mercyhurst University poll.

 

This article was from The York Dispatch, Pa. and was legally licensed through the NewsCred publisher network.