Pa. budget vote pulled as House members disagree on gas tax
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HARRISBURG -- Efforts to enact a timely state budget for fiscal 2010-11 encountered a setback Tuesday, as support in the House for a $320 million tax package went south and Democratic leaders decided to send the bill back to the Appropriations Committee.
"After two hours of debate, the only reason you pull a vote on a bill is because you don't have the votes," said House Republican leader Sam Smith, who said that nearly all of his 99 members would have voted against House Bill 325, the Democratic tax package.
"The non-vote is a clear indication that a majority of House members disagree with the Democratic leadership's plan to raise taxes," he added.
The revenue plan included a two-part tax on natural gas extracted from areas of Marcellus Shale, plus higher taxes on cigarettes and new taxes on cigars and smokeless tobacco.
With only two weeks before the new fiscal year begins July 1, Gov. Ed Rendell said he'll meet today with leaders of the four legislative caucuses to try to reach agreement on a tax and spending package for 2010-11. But the sides are far apart, with Mr. Rendell favoring a $29 billion budget and most Republicans saying spending can't exceed $27.5 billion. Mr. Rendell is urging GOP leaders to specifically list the areas they will cut.
Democrats control the House and need almost all of their 104 members in order to pass the tax package. It was strongly opposed by Republicans, who criticized the proposed Marcellus Shale gas tax and claimed it would "kill a new industry in Pennsylvania and the jobs it will bring."
The Marcellus Shale Coalition, an industry group, is also opposed to the tax, saying gas drilling companies would just go to other states with pockets of underground gas.
But when some Democrats, such as Reps. David Levdansky, Bill DeWeese and John Pallone, refused to support the tax bill, it was really in trouble. Mr. Levdansky, D-Forward, disagreed with House Democratic leaders over how to structure the natural gas "severance tax" and over how to spend the $142 million a year that would be generated.
As designed by Rep. Dwight Evans, D-Philadelphia, the severance tax would have two parts -- an 8 percent tax on the market value of all gas pumped from the wellhead, plus another tax of 8 cents per thousand cubic feet of gas. Mr. Levdansky favors a simpler tax -- 35 cents per thousand cubic feet of gas, but no levy on the market value of gas from the wellhead.
Some Democrats also disagreed on how to spend the severance tax revenue. Mr. Evans wants to give 80 percent of the new tax revenue to the state general fund, to help erase a budget deficit approaching $1.5 billion. Another 12 percent would go to local municipalities where natural gas wells are located, to help them pay for road repair and other costs, and the rest would go to environmental protection.
Mr. Levdansky favors a 50-50 split, with half the tax money going to the state and the other half split between municipalities and environmental protection. Some environmental lobbyists, including Penn Future and the Sierra Club, said Tuesday that legislators should enact a "fair" tax on the gas industry as part of the 2010-11 state budget.
First Published June 16, 2010 12:00 am
