Natural Gas Impact Taxes Generate $223.5M for Pa. Communities, State Programs

All of Pennsylvania’s 67 counties will receive a portion of the $223.5 million generated in 2014 from the state’s natural gas impact tax, according to the state Public Utilities Commission (PUC) [NOTE: Click here to view county + municipality totals]. And since 2012, safe shale development has generated a total of more than $850 million in these tax revenues that directly benefit communities – including those without drilling activity.

County and local leaders are putting these tax revenues to work through boosting infrastructure development and enhancement projects, first responder services, and community parks as well as lowering taxes in some taxes. That’s why local officials are stressing that impact taxes are “of great importance” to their budgets and services.

Despite the hundreds of millions of dollars in tax revenue directly benefitting local communities, some Harrisburg policymakers want even higher energy taxes that threaten these benefits. In fact, Gov. Wolf’s energy tax represents the highest-in-the-nation, according to independent experts. Make no mistake, even higher energy taxes jeopardize shale’s local benefits, good-paying jobs, consumer savings and our regional manufacturing resurgence.

MSC president David Spigelmyer, commenting on the wide-spread benefits of the Pennsylvania’s impact tax and the threat of higher energy taxes, said:

“These tax revenues are essential to county and local government budgets, helping to stabilize and even lower taxes for Pennsylvania families. What’s more, these special natural gas tax revenues, more than $850 million since 2012, which are overwhelmingly sent directly to local governments rather than Harrisburg, are enabling important infrastructure and other vital community improvement projects. That said, while we continue to make positive progress, we cannot lose sight of the fact that these local community benefits are jeopardized by higher energy tax plans being considered by some in Harrisburg.”

Here’s how local communities are benefitting from these essential tax revenues:

WESTERN PA

  • Washington Co. Leads State in Impact Tax Revenues: Washington County and its municipalities led the state in reimbursements from impact fees paid by drillers in 2014, with the county receiving $6.5 million and its municipalities garnering $11.1 million for a total of $17.63 million. … Over the past four years, PUC has collected and distributed more than $855 million in impact fees. … “We’re really pleased with the numbers,” said Washington Co. Commission Chairman Larry Maggi. “It gives us and the municipalities an opportunity to do projects we might not otherwise be able to do.” “We’re taking care of our bridges, rehabbing roads and rehabbing infrastructure,” Maggi said. … “The impact fee is, and continues to be, of great importance to the county,” Greene Co. Commissioner Chuck Morris said. “This increase will enable the county to provide services that are needed throughout the county and assist with infrastructure and other needs.” … Act 13 is a great benefit to the township, [Cumberland Twp. Supervisor Bill] Groves said. “It enables us to do things in a year that normally would take two or three years to complete,” he said.
    • Pennsylvania’s impact tax continues to work as designed, delivering millions in natural gas tax revenues to each and every county across the entire commonwealth,” said Dave Spigelmyer, president of the MSC. “These tax revenues are essential to county and local government budgets, helping to stabilize and even lower taxes for Pennsylvania families. What’s more, these special natural gas tax revenues, more than $850 million since 2012, which are overwhelmingly sent directly to local governments rather than Harrisburg, are enabling important infrastructure and other vital community improvement projects. That said, while we continue to make positive progress, we cannot lose sight of the fact that these local community benefits are jeopardized by higher energy tax plans being considered by some in Harrisburg.” (Washington Observer-Reporter, 6/10/15)
  • Beaver Co.’s Impact Tax Share Increases to $423K; Plus Another $463 to its Municipalities: Beaver Co. will be receiving $423,000 in drilling impact fees, state Rep. Jim Christiana said Tuesday in a press conference in which he dismissed Gov. Tom Wolf’s severance tax plan as a “fairy tale.” Christiana and Speaker of the House Mike Turzai held a joint press conference in Harrisburg to tout the $223.5 million in state-disbursed impact fees to municipalities and counties for 2014. … Wolf’s estimates that a severance tax would generate $1 billion while natural gas prices have fallen drew Christiana’s ire. “His revenue projections are a fairy tale,” Christiana said. “They are not realistic.” … Turzai said Wolf’s proposal is “completely punitive” and will stymie natural gas expansion and job growth in Pennsylvania. “The governor is basically calling for a de facto (drilling) moratorium akin to what New York has,” Turzai said. … As for Beaver County, it will receive $423,467 under Act 13, a 14 percent increase from last year, when it received about $371,000. (Beaver County Times, 6/9/15)
  • $48M in Impact Taxes to Benefit Southwestern Pa.: Southwestern Pennsylvania counties and municipalities will share $48 million of the $223.5 million in impact fees that natural gas production companies paid to the state this year. … The Pittsburgh region’s share of the impact fees will go to communities that host shale … Counties also receive a portion of the fees to spend on conservation, green corridors and other environmental initiatives. … Washington Co. and its municipalities will receive $17.6 million, and Greene Co. and its municipalities will receive $11.8 million. Butler Co. communities will receive $5.7 million, followed by communities in Westmoreland Co. with $3.7 million, Fayette Co. with $3.5 million and Allegheny Co. with $2.2 million. (Pittsburgh Post-Gazette, 6/11/15)
  • Southwestern Pa. Sees Impact Tax Revenue Increases 7.5%: Southwestern Pennsylvania will see its share of the state’s impact fee revenue increase by 7.5% this year, according to new PUC data. The commission, which administers the impact fee, said it will be handing out $18.7 million to the nine counties in this corner of the state and to their municipalities. That’s up from $17.4 million in the previous round of annual disbursements. … The impact fee is essentially a tax levied against new Pennsylvania gas wells. The fee is paid by well operators each year during the first 15 years of the life of a well. (Pittsburgh Business Times, 6/10/15)
  • “Shortsighted” Energy Tax Proposals Would “Stop Growth of Jobs”: The state collected $223.5 million in impact fees in 2014, down slightly from the $225.8 million the previous year, PUC said Tuesday. House Speaker Mike Turzai used the preliminary figures to denounce Gov. Tom Wolf’s proposed severance tax. … Turzai and Rep. Jim Christiana argued the money the state collected in impact fees shows that the industry is paying the state enough for the gas it produces and does not need another tax. … “The governor is forgetting to remind Pennsylvanians of the impact fee and how much it’s bringing in,” Turzai said. “It is a tax on natural gas.” … “It’s going to stop the growth of jobs,” Turzai said. “It’s punitive in nature, and it’s shortsighted.” (Pittsburgh Tribune-Review, 6/9/15)

SOUTHEASTERN PA

  • “York County to Receive More than $420,000 in Natural Gas Revenue”: York Co. will receive more than $420,000 in natural gas drilling impact fee revenue from activity in the Marcellus Shale. “Pennsylvania’s abundance of natural gas and the fees required by Act 13 of 2012 are the reasons we as a county stand to benefit, even though we are not part of the Marcellus Shale formation,” said state Rep. Keith Gillespie. … The four-year total distributed to the county is more than $1.5 million, he added. The impact fee money has been used for countywide farmland preservation, work on the Heritage Rail Trail County Park, work on Camp security in Springettsbury Twp. and improvements to baseball fields in the city. (York Daily Record, 6/10/15)
  • Lancaster Co. Receives $508K in “Valuable” Impact Tax Revenues: Lancaster County will receive a little over half a million dollars as its 2014 share of the so-called drilling Impact Fee. … Lancaster county’s 2014 share is $507,694.29 from the state’s total of $223.5 million. … The county uses the proceeds for preserving farmlands and repair of public infrastructure such as bridges. “The impact fee is very valuable to the county.  We have invested the Legacy Portion of the funds in our nation-leading Agriculture Preserve Program directly and with challenge grants to the Lancaster Farmland Trust,” said county commissioner Dennis Stuckey. (LNP, 6/11/15)

NORTHWESTERN/CENTRAL PA

  • Impact Tax Revenue “Welcome News for Local Budgets”: Elk Co. will get the largest local portion of the impact fee, with $383,148 slated for the county’s portion, followed by McKean Co. with $365,240; Potter Co. with $256,456; and Cameron Co. with $233,310. … Cameron and Elk counties both saw increases over last year’s amount received. … “It’s really significant revenue coming back directly to our counties and our municipalities as opposed to going to Harrisburg and being put in the general fund,” said state Rep. Marty Causer … Causer said he’s continuing to fight to keep the impact fee in place, with funds being directed to the counties and municipalities where the drilling takes place. “The counties that have no drilling want that money,” Causer said. “Local municipalities in our area…one of the biggest things they struggle with is highway and bridge issues. (Impact fee revenue) has helped them a great deal. I know the county has used a significant amount for 911 emergency services. That’s a great use for those funds. “If they didn’t have that revenue, they’d have to turn to property tax,” Causer added. “I think the system is working.” McKean Co. Commissioner Joe DeMott agreed. “We’re happy to be getting that money. It comes in very handy.” … “This money is certainly beneficial to us when we’re working with these projects that would be cost prohibitive without it,” DeMott said. “I’m really happy we’ve had the drilling we have had, and would encourage more in the future.” He added that in his experience, the drillers working in the county have been cooperative with local governments. “People here understand drilling. It’s been happening here for well over 100 years — since the start.” (Bradford Era, 6/11/15)

NORTHEASTERN PA

  • Bradford, Sullivan Co. Tap Impact Tax Revenue for Vital Services: The Bradford Co. government will be receiving $6.42 million in revenue from the impact fee this year, while the Sullivan Co. government’s allotment of impact fee dollars this year will be $638,359. … The Bradford Co. commissioners plan to distribute a portion of the county’s 2015 allotment to the fire companies and volunteer ambulance services that operate in the county, [Bradford Co. Commissioner Daryl] Miller said. In addition, the commissioners plan to distribute some of the county’s 2015 allotment in the form of grants that will be provided by the recently established Bradford Co. Impact Fee Grant Program, Miller said. … … Sullivan Co. Commissioner Wylie Norton said Sullivan Co.’s 2015 allotment of impact fee dollars is the highest it’s ever been. … Some of Sullivan’s 2015 allotment will be used to offset a shortfall in funding for the county’s 911 program. … Some of Sullivan’s 2015 allocation will be also be used to fund a homestead exclusion on 2015 county property taxes. (Towanda Daily Review, 6/9/15)
  • Seven-County NEPA Region to Receive More Than $20M in Impact Taxes: The seven-county region is set to receive more than $20 million from unconventional gas well impact fees, according to preliminary numbers from PUC. Susquehanna Co. can expect about $16 million and Wyoming Co. about $3.6 millionCounties with no drilling, like Lackawanna and Luzerne, receive the remaining funds Lackawanna is to receive $205,082 and Luzerne, $306,863 from the Marcellus Legacy Fund. In Springville Twp., Susquehanna Co. township supervisor Duane Wood said much of it goes right into infrastructure projects. The township has 2¼ miles of road that need to be repaved this year and two lengths of storm drain that must be replaced. “Around here, that’s what we’re doing with this. … That’ll shoot a big chunk out of it,” Mr. Wood said of the $887,000 marked for his town. It’s much of the same 5 miles south, in Washington Twp., Wyoming Co., which is to receive $460,000. [Twp. supervisor Dan Huff] believes the impact fee system, rather than a tax, works better for small towns, because they’re guaranteed a check every year and not dependent on the market. … “My fear is it will get funneled away from the counties up here that are getting the impact,” Mr. Huff said. (Scranton Times-Tribune, 6/10/15)
  • “Our Region is Not Part of the Marcellus, Yet Communities Here Still Benefit”: Northampton and Lehigh counties stand to receive a combined $627,795 in 2014 impact fees from natural gas drilling in Pennsylvania’s Marcellus Shale geological formation. … “Our region is not part of the Marcellus Shale formation, yet communities here still benefit, as was promised under Act 13,” [Rep. Justin] Simmons said. “Revenue from the impact fees is going toward road repairs, water system upgrades and public safety improvements across the state.” …  Speaker Mike Turzai on Tuesday pointed to the impact fee revenue and said a severance tax could harm an industry creating steel manufacturing, engineering and refinery jobs. (Lehigh Valley Express Times, 6/10/15)
  • Greater Lehigh Valley Communities Receive $2.6M in Impact Tax Funding: More than $2.6 million will be headed to the Greater Lehigh Valley from Marcellus shale impact fees. … Money distributed by the fund can be used by counties for emergency response planning, training and other activities; water, stormwater and sewer system construction and repair; infrastructure maintenance and repair; and statewide environmental initiatives. (Lehigh Valley Business, 6/10/15)

Become a United Shale Advocate today and join the thousands of other Pennsylvanians who support new jobs, not even higher energy taxes.