Pa. Natural Gas Impact Tax an Overwhelming Success, Driving Revenue to Communities

Pennsylvania’s unique tax on natural gas, the impact fee, is working as designed, directly benefitting Butler County and all 67 counties, local leaders confirmed during an event last week.

The event at Butler County’s Alameda Park, where impact fee revenues will be used to upgrade the playground this fall, featured remarks from the Butler County Commissioners, state Senator Scott Hutchinson, state Representative Marci Mustello, state Representative Jeff Pyle, state Representative Jim Marshall and Allegheny Township Supervisor Chuck Stowe.

And the message was clear – Pennsylvania’s natural gas impact tax works.

Butler County and its municipalities received more than $8 million this year, bringing the seven-year total to more than $40 million in new revenue to improve local roads, bridges, parks and first-responder services since 2011.

The local community experiences the benefits of the impact tax firsthand. In an editorial following the news conference, the Butler Eagle concluded, “The [MSC] has said a severance tax would “cost consumers, hurt local jobs … and negatively impact investment.” We agree. It’s better to keep the impact fees as the shale industry booms in the state.”

Here are the highlights from last week’s event:

David Spigelmyer: “I think it’s fair to say that Butler County, and the way they’ve invested those funds in a multitude of ways, has been a shining example of how these funds were meant to be used.

…Today, natural gas rates at area utilities are less than 70% than what they were in 2008. And, contrary to where we were at decade ago, near a third of our electric supply is produced with natural gas. What has that meant to consumers? The affordability of natural gas has driven down wholesale prices of electricity by 41%, and we have reduced sulfur dioxide emissions, nitrogen emissions, and carbon emissions around our country because of the fact that we’re burning natural gas for power generation.”

Butler County Commissioner Kevin Boozel: “The capital projects and technology investments we have made in Butler County would not have happened without the impact fee, it’s very simple.”

Pa. State Senator Scott Hutchinson: “Today we are celebrating Pennsylvania’s manufacturing renaissance which is being led by the shale gas industry, bringing cheap, abundant and clean energy – in vast amounts – for the rebuilding of our manufacturing economy here in Pennsylvania.  … It’s important that we don’t kill the goose that laid the golden egg. We do not need to have a severance tax in Pennsylvania, we have something else that we are celebrating today, and that is the impact fee- and what a wonderful model that has been. The impact fee is a successful and commonsense way to take an extra tax on this industry and primarily drive the money back to the communities.”

State Representative Jeff Pyle: “This is a brand-new creation of wealth. Every township will tell you we’re better off for [the impact fee]. … The impact fee is I think one of the most successful things I’ve had a part in. And like Hutch said, if ain’t broke, don’t fix it. It’s not broke – it’s working exactly as we thought it would, to everyone’s benefit, especially here in Butler.”

State Representative Marci Mustello: “Butler County is a shining example for the commonwealth for how this impact fee money is supposed to be used.”

Leslie Osche, Chairman of Butler County Board of Commissioners: “Because of impact fees dedicated to conservation districts, our conservation district was able to become an independent non-profit two years ago, getting out from underneath the county, reducing our staff size, and allowing them – more importantly – more freedom to invest more time and money to move along development permits in our county.”

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