Mr. Scarnati earlier this month introduced a plan calling for gas companies to pay the state $10,000 for each well they drill in Pennsylvania. At least six other tax proposals are alive and well in the state, including one from state Rep. Greg Vitali, a Democrat who represents the affluent Philadelphia suburbs.
“I think it is political influence that’s at play here,” he said in an interview with The Washington Times on Monday. “The drilling industry has spent enormous amounts of money on political contributions. There is no good policy reason to not impose this tax.”
Mr. Vitali estimated that his plan would raise $200 million this fiscal year, money that would go a long way to plug Pennsylvania’s projected multibillion-dollar budget deficit. It would tax natural gas at 6 percent of the current market value of the fuel. He said that would still give his state an economic edge over others, some of which tax gas at nearly 10 percent.
The money would be split three ways: A third would go to the state’s general fund, a third to municipalities and a third to environmental stewardship programs, which fund water and forest-restoration efforts statewide.
Of the plans on the table, Mr Vitali’s would raise the most money over the next five years, according to an analysis from the Pennsylvania Budget and Policy Center. Other proposals would implement tax rates of about 3 percent.
Natural-gas proponents think critics are off base.
“It’s a myth that they’re not paying any taxes,” said Tom Ridge, former Pennsylvania governor and homeland security secretary and current adviser to the Marcellus Shale Coalition. He argues that the drilling companies already pay millions of dollars into state coffers each year in corporate and other taxes.
Others dispute that. The Budget and Policy Center released a report last month claiming that gas companies structure their books to avoid taxes.
Either way, a “tax” appears unlikely. Republicans dominate the House and Senate, and Gov. Tom Corbett, also a Republican, made a “no new taxes” pledge during his election campaign last year. Some say he could remain true to his word but still embrace an “impact fee,” as Mr. Scarnati and others have proposed.
Industry insiders also point out that gas companies don’t need the government’s help to start operations, as is often the case with large-scale wind- or solar-power projects.
“We’re not waiting for subsidies. We’re not waiting on new technology from anyone. This was done the old-fashioned way,” said Range Resources spokesman Matt Pitzarella.
© Copyright 2013 The Washington Times, LLC. Click here for reprint permission.
Ben Wolfgang is a national reporter for The Washington Times. Before coming to the Times, he spent four years as a political reporter in Pennsylvania. His focus is on education and science policy. Ben lives in southeast D.C. and has played guitar in several bands while still in Pennsylvania. He can be reached at email@example.com.
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