MSC in Patriot-News: Pa.’s Shale Impact Tax Generates $850 Million for Communities

The op-ed “Here’s how a principled shale tax can break the budget stalemate” fails to acknowledge that Pennsylvania already has the “reasonable” severance tax which the authors seek to enact.

Pennsylvania’s tax – called an “impact fee” – has generated more than $850 million in new revenues since 2012 and is largely directed to local communities. These tax revenues help local officials boost infrastructure spending, enhance public safety, improve community parks, reduce property taxes and meet other local priorities. Taxes on natural gas operators have also directed over $300 million into statewide environmental protection programs, including Growing Greener.

Oddly, the column seeks to draw a parallel with West Virginia as a model of a “thriving” natural gas industry. The fact is West Virginia has half the rigs, a quarter of the production and a tenth of the jobs that Pennsylvania has successfully maintained. It is not in Pennsylvania’s best interest to join the pack in a race to the bottom.

Given the current price of natural gas in Pennsylvania, the impact fee equates to a 6.5 percent severance tax. The low price structure and high cost of business in the commonwealth has already led to reductions in capital expenditures and job loss. We should not exacerbate this situation through higher taxes that make our state uncompetitive.

The significant new revenue helping Pennsylvania communities should be proof enough that lawmakers got it right when they authorized an impact tax and allocated those dollars to help all Pennsylvania communities.

Erica Clayton Wright
Marcellus Shale Coalition
Pittsburgh, Pa. 

NOTE: Click HERE to view this letter online.