Wolf links tax on shale drillers, school aid in Monroeville visit
Governor projects potential revenue at $1 billion
February 16, 2015 10:49 PM
Gov. Tom Wolf talks with Monroeville Mayor Gregory Erosenko after a press conference at the Monroeville Municipal Building Monday.
Andy Pollak, of Irwin, asks Governor Tom Wolf about the environmental impact of fracking during a press conference at the Monroeville Municipal Building.
Gov. Tom Wolf gives a hug to Linda Hippert, executive director of the Allegheny Intermediate Unit after speaking with her and Nina Zetty, (right) superintendent of the Gateway School District.
By Mary Niederberger / Pittsburgh Post-Gazette
When Gov. Tom Wolf unveils his state budget proposal on March 3, he’ll have to find a way to fund the state’s 500 school districts with existing revenue.
But if he has his way, the 2016 budget proposal will include projected revenues of $1 billion from a natural gas extraction tax on the state’s drilling industry, much of which he said would be used to fund schools.
The governor pitched his proposal to raise money for schools with an extraction tax Monday during a news conference at the Monroeville Municipal Center, flanked by local Democrats, including county Executive Rich Fitzgerald and several state legislators.
Before heading to the podium, Mr. Wolf circulated through the room to meet and shake hands with each of the several dozen people who gathered, including local school officials and politicians, reporters and a group of anti-fracking protesters.
Then Mr. Wolf made his way to the microphone to explain his proposed Pennsylvania Education Reinvestment Act, which calls for a 5 percent severance tax on the value of the gas at wellhead plus 4.7 cents per thousand cubic feet of extracted gas.
He noted that Allegheny County schools have lost $47 million in state funding since the 2010-11 school year and that the state ranks 45th in the United States for education funding.
“We cannot have an education system that is not adequately funded,” the governor said. “We cannot keep disinvesting in education and expect to get to a good place.”
He said adequate funding of public schools is necessary to ensure that students learn the skills they need to help move the state’s economy forward.
Mr. Wolf’s proposal totals a 5.8 percent tax, which is comparable to those in other surrounding states and lower than the 6.5 percent tax proposed in Ohio. He called it a “reasonable tax” and a “competitive tax.”
The governor predicts it would raise $1 billion in revenue and has promised “the lion’s share” to education, with other smaller portions used for environmental oversight of the industry and investment in alternative energy development.
Mr. Wolf also has pledged to come up with a distribution formula that would give some of the funds back to local communities that host wells to replace the impact fee natural gas companies currently pay to the state and local communities.
The proposal originally was unveiled to the state Legislature last week and announced at a visit to school in Chester County. On Tuesday, in addition to his appearance in Monroeville, Mr. Wolf toured Greater Johnstown High School and spoke about his extraction tax proposal there.
The $1 billion total is about the amount that was cut from the state education budget in 2011, during former Gov. Tom Corbett’s administration. Mr. Corbett and his supporters said the reduction was necessary because of the loss of federal stimulus funds that former Gov. Ed. Rendell had used to balance the education budget.
Mr. Wolf said he believes he will get “fair consideration” on his proposal among legislators since both parties already had introduced other bills.
However, Republican leaders already have said that a higher priority for the upcoming legislative session is overhauling the state’s enormously underfunded pension system.
The natural gas industry is one certain opponent to the extraction tax. Drilling firms have has argued that an extraction tax in Pennsylvania would discourage investment in the Marcellus Shale industry.
David Spigelmyer, president of the Marcellus Shale Coalition, released this statement after the governor’s address:
“Labor leaders, small businesses, as well as local and county government share our deep concerns about the negative effects — especially as it relates to job growth and community investments from shale impact tax revenues — that even higher energy taxes will have on the Commonwealth’s economy. Pennsylvanians are looking to their elected officials to help create new jobs, not higher energy taxes.”
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