Over the years, we have heard local leaders use one word to describe Pennsylvania’s unique tax on natural gas development: “Godsend.” Without the tax revenue delivered directly to local communities, buying that new fire truck, fixing the courthouse dome or improving the biking trail just wouldn’t have been possible.
Seven years after its implementation, we continue to hear that the impact tax on shale drilling is an essential revenue source, helping to improve communities and our environment throughout the Commonwealth.
Recently, we joined Jason Fink of the Williamsport/Lycoming Chamber of Commerce, along with other locally elected officials and energy producers in the region, to discuss how tax policy is a proven, effective solution for every county in Pennsylvania.
The tax is expected to generate a record $247 million in new revenue this year, according to the Independent Fiscal Office, putting its overall collection at nearly $1.7 billion since 2012. That’s hundreds of millions of dollars annually for local governments and special programs to fund critical infrastructure and conservation projects across the state.
In addition to money that goes directly to counties and townships, the Commonwealth Financing Authority has approved 715 projects funded by the impact tax, an investment totaling more than $117 million in communities across the state. Importantly, these projects are proposed and designed by local leaders to address communities’ most pressing needs, such as improved sanitation, road repairs, flood mitigation or open space preservation.
Pennsylvania’s natural gas operators are also ensuring that our environment is protected and enhanced. Tax revenue from the industry, combined with approximately $100 million annually in royalties from energy development on state lands, is a critical funding source for the state’s Environmental Stewardship Fund and its Growing Greener program. The impact tax alone has generated $462 million for statewide environmental and conservation programs.
Such important community projects reflect the broad benefits of Pennsylvania’s natural gas impact tax, which has been operating as its’ design intended for the past seven years.
Often, folks don’t realize when a streambank is restored or a bridge undergoes repairs that the impact tax may be responsible for funding that project. Indeed, Gov. Wolf forgets to mention how natural gas is already funding major infrastructure projects in all 67 counties as he travels the state promoting his “Restore Pennsylvania” plan that will triple tax Pennsylvania natural gas development.
Our industry is proud to deliver these benefits. We’re safely producing and delivering the affordable energy that defines modern life, while generating huge amounts of much-needed revenue for local, county and state government. Small businesses are growing, our region’s manufacturing base is being revitalized and consumers are realizing energy savings.
But Gov. Wolf’s proposed triple taxation threatens this growth that will harm consumers and cost jobs. Capital investment flows like water and follows the path of least resistance; our lost opportunity will quickly become other states’ gain.
Pennsylvania’s abundant natural gas resources is an economic blessing, one that is capable of driving manufacturing and job growth well into the future and far beyond Restore Pennsylvania’s short-term trajectory. Our elected leaders in Harrisburg got it right when they passed the Impact Tax in 2012 and should fully get behind what is already working for communities and the Commonwealth by supporting commonsense energy policies that encourage long-term, sustainable progress.
David Spigelmyer is president of the Pittsburgh-based Marcellus Shale Coalition.
Click here to view this op-ed online.