Politics & Government

State Legislators Propose Marcellus Shale Gas Tax

The tax - to be set at 4.9 percent - would generate $362 million during the 2012-13 fiscal year and rise to $562 million annually within five years.

State Reps. Gene DiGirolamo (R-18th) and Tom Murt (R-152nd) are holding a press conference today in Harrisburg to urge support for their legislation on a drilling tax in the Marcellus Shale natural gas formation.

In a recent release, the representatives outlined their proposed legislation.

“One of the largest concerns about the natural gas companies that have taken advantage of large natural gas deposits in our state is that they’re not paying their fair share,” DiGirolamo said. “Pennsylvania is the only major natural gas-producing state in the nation that does not have a tax or fee levied on natural gas extraction. As a result, many taxpayers feel they’re shouldering more of the tax burden than they should. This legislation is designed to level the playing field.”

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The tax being proposed in the new legislation would help provide financial support to a number of items that have taken budget cuts in recent years, the legislators claim. The tax revenue would be broken down into three areas: 

  • 28 percent to local governments
  • 28 percent to environmental programs
  • 44 percent to state government.

The tax - to be set at 4.9 percent - is estimated to generate $362 million during the 2012-13 fiscal year and rise to $562 million annually within five years. This rate is lower than neighboring West Virginia, where the industry is also thriving.

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Those programs that would be targeted to receive revenue would include statewide environmental programs, hazardous site cleanup programs, local municipalities (those that both host drilling sites and others), affordable housing, conservation districts, education, job training, transportation infrastructure and human services.

The lawmakers claim their proposal meets the following criteria:

  • It’s fair and reasonable to the industry
  • It will sustain the growth of the industry and be comparable to rates in other states
  • It assists host communities and helps with job creation, social and environmental costs and impacts
  • It makes long-term investments in natural resources and environmental programs, along with the economy and human capital
  • It strengthens the Commonwealth’s safety net for times of need
  • It makes sure every citizen can benefit from development in the Marcellus Shale.

According to a release, a group of organizations will join the legislators to speak at the press conference, including: Citizens for Pennsylvania’s Future (PennFuture), United Methodist Advocacy in Pennsylvania, Drug and Alcohol Service Providers Organization of Pennsylvania, Pennsylvania Coalition Against Domestic Violence, Pennsylvania Housing Alliance, the Coalition for Labor Engagement and Accountable Revenues (CLEAR Coalition), Education Voters of Pennsylvania, Pennsylvania Budget and Policy Center and the Waiting List Campaign, a group supporting adults with special needs.

The event is scheduled to begin at 10 a.m. For those who cannot travel to Harrisburg for this press conference, it will be web-streamed live at DiGirolamo’s website.

“The industry here in Pennsylvania is comprised of many out-of-state companies that are paying a drilling tax in other states,” DiGirolamo noted. “These companies expect to pay a tax, and we want to make sure that whatever tax is imposed is as fair as possible.”


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