June 27, 2018
The argument for a natural gas severance tax in Pennsylvania usually starts with fingers pointed toward other big energy producing states and their drilling taxes.
Well, the state Public Utility Commission last week announced that nearly $210 million is being distributed in impact fees this year based on production of natural gas in 2017.
Of that total, $52 million is going to northeastern counties in the state.
Lycoming County is receiving $3.7 million and its municipalities $5.8 million.
The money is going for local bridge, road, water, sewer and other infrastructure improvements, community parks, first responders, soil and water conservation, and environmental and housing initiatives.
What you won’t hear from the gas severance tax pushers is that Pennsylvania’s drilling tax revenue for 2017 is more than the drilling tax collected by the states of West Virginia, Ohio, Arkansas and Colorado combined.
And these states produce more natural gas than Pennsylvania.
The $210 million being distributed is a $36 million increase – 21 percent – over last year’s impact fee total. It brings to $1.5 billion the new revenue total to local communities and their governments since the impact fee was instituted in 2012.
A portion of the impact fee from natural gas companies also goes to state government environmental programs of the Department of Environmental Protection, county conservation districts and Pennsylvania’s Growing Greener program.
It’s fine that the state revisit each year the need for a natural gas severance tax. But the numbers show that the impact fee has been a more effective generator of revenue than the taxes imposed in other states, and the money is being sent where it should be – to the places that need it for infrastructure impacted by the industry.
It feels to us like the real objection from some to the existing tax revenue coming from the industry rests with it going to local communities rather than the General Fund of the state budget.