Some Democratic legislators push for shale gas tax
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HARRISBURG -- With time getting short, a dozen House Democrats and several environmental groups today demanded that the Legislature meet an Oct. 1 deadline for enacting a new tax on the natural gas extracted from areas of Marcellus shale in Pennsylvania.
Using a football analogy, state Rep. David Levdansky of Forward said, "We are clearly in the red zone and we're in the last two minutes of the game. We need a touchdown.'' On a football field, the red zone is the area between the 20 yard line and the goal line.
Democrats, who control the House by a 104-99 margin, are meeting in a closed party caucus this afternoon to see if there is enough support for a shale gas tax. It would take at least 102 members of the 203-member House and 26 of the 50 senators to enact a tax. The new levy would take effect Jan. 1 if enacted now.
When the current state budget was adopted in early July, legislators agreed to pass a Marcellus shale gas tax by Oct. 1. But there are only nine or 10 session days left before that deadline and many unanswered questions still remain about a tax.
Two of them pertain to how to structure a tax and how to use the revenue generated by a levy. Gov. Ed Rendell favors a two-part tax, putting a 5 percent tax on the value of the gas that's extracted and sold, plus a levy of 4.7 cents per MCF, or 1,000 cubic feet of gas pumped out. He hopes that would raise about $100 million a year.
Mr. Levdansky wants to impose a 35-cent fee on each 1,000 cubic feet of gas produced, which he thinks would raise up to $200 million a year.
Some gas industry firms prefer the approach used in Arkansas, putting a 1.5 percent tax on the gas pumped out of the ground, at least for the first three to five years, while the gas industry is getting started.
There are also many competing interests for use of the money, such as helping erase a $282 million state budget deficit; giving more funds to state agencies such as the Department of Environmental Protection, the Fish and Boat Commission and the Game Commission, to protect land, air and streams; and giving funds to municipalities where gas drilling is going on, to help repair road damage causes by drilling equipment and protect local water supplies. In addition, school districts in the areas of Marcellus shale want a slice of the funds because school classes sizes could increase as gas industry workers move in.
First Published September 13, 2010 2:35 pm
