MSC in Tribune-Review: Impact fee pays Pa. municipalities dividends

By David Spigelmyer

In central Pennsylvania, boaters and anglers can use two new access points to enjoy the scenic Juniata River. Near Wilkes-Barre, workers will rehabilitate four steel bridges that have fallen into disrepair. In Williamsport, a new $16 million airport terminal broke ground early this spring. And in Westmoreland County, the DiVirgilio Sports Complex underwent a rehabilitation and expansion.

These meaningful community improvements are among hundreds of local projects that have been made possible by Pennsylvania’s unique impact fee on natural gas drilling which has succeeded in its design to deliver increased benefits to all 67 counties.

Another nearly $210 million in new natural gas impact fee revenue is on its way, the Public Utility Commission announced recently. Since 2012, nearly $1.5 billion has been generated in new revenues from the impact fee that is levied on natural gas development.

This special drilling tax is unique to Pennsylvania – we are the only state that levies an impact fee on top of all the other taxes every business pays in the Commonwealth. In total, more than $4.5 billion has been generated in new tax revenues, royalty and bonus fee proceeds resulting from shale gas development in Pennsylvania.

Unlike other states where drilling tax revenues flow to state politician-controlled budgets, Pennsylvania takes a different and better approach. Much of the natural gas impact fee revenue goes directly to localities – not to a state general fund – so that community-level leaders direct how the resources are utilized.

The impact fee has become a winning policy solution that empowers county and municipal leaders by keeping the majority of revenues local, allowing them to purchase critical emergency equipment, upgrade water and sewer systems, improve neighborhood parks, and fix roads and bridges without raising other taxes.

Meanwhile, statewide environmental and conservation efforts have received a much-needed boost in funding. Since 2012, more than $462 million has been invested in key environmental and recreational grant programs, like the state’s award-winning Growing Greener program and the Marcellus Legacy Fund.

These grant dollars have helped to preserve farmland, conserve critical open space, build and rehabilitate local parks, hiking trails and playgrounds, and funded key water and sewer infrastructure projects. Additionally, the Department of Environmental Protection has received $42 million in new revenues to enhance environmental safety and oversight, while tens of millions of dollars have flowed to county conservation districts and conservation projects to help meet their critical charge of watershed protection and restoration.

Locally, in Westmoreland County, more than $27 million in impact fee money has been used for Sewickley Creek acid mine treatment, City of Jeannette and Penn Borough flood protection, expansion at Twin Lakes Park, and the Connection Communities Through the Saint Vincent Trail program, to name just a few examples.

The impact fee’s direct community benefits are on top of the energy savings, local jobs, and environmental progress that safe, responsible natural gas development delivers. In fact, as we celebrate America’s birthday, support from local natural gas operators, for example, has helped many communities put on fireworks displays and parades.

Generating direct community benefits like these, and many others, are why local leaders and voters across the Commonwealth support maintaining this tax over sending more money to a budgetary black hole controlled by Harrisburg politicians.

Pennsylvania’s unique impact tax ensures that revenues from our affordable and abundant natural gas resources are directed to the community programs all across the Commonwealth for the benefit of all Pennsylvanians.

David Spigelmyer is president of the Pittsburgh-based Marcellus Shale Coalition. Learn more at MarcellusCoalition.org.