Lawmakers still pushing for severance tax in Pennsylvania

By Andrew Staub | PA Independent

HARRISBURG, Pa. — A bipartisan group of state lawmakers Wednesday repeated a familiar refrain: It’s time for a severance tax on Pennsylvania’s natural gas industry.

But Republican Gov. Tom Corbett doesn’t seem ready to budge on his opposition to a severance tax. The state already instituted an impact fee on the industry.

“Quite honestly, it’s sort of the same old, same old,” said Patrick Henderson, Corbett’s top energy adviser. “It’s ‘let’s tax a segment of the economy here in Pennsylvania that’s growing and hiring Pennsylvanians, and let’s judge their value by how much more money government can take from them.’”

State Sen. Vincent Hughes, D-Philadelphia, led the group in pushing a severance tax, contending there’s a growing interest in both chambers and both parties to further tax the natural gas industry.

The lawmakers weren’t there to push a particular piece of legislation, but they did have a destination in mind for severance tax funds.

“Many of us believe, collectively, that a lion’s share, if not all of those dollars, should go to our education system,” said Hughes, the Democratic chairman of the Senate Appropriations Committee.

The continued push for a severance tax came less than a week after Corbett announced the state expects to collect $224.5 million from the impact fee this year. That would bring the total collections to more than $630 million since 2012, with most of that money injected into local communities.

“The impact fee is working. They ought to be celebrating that,” Henderson said of the lawmakers pushing for a severance tax.

State Rep. Gene DiGirolamo, R-Bucks, said the state needs a severance tax on top of the impact fee. He’s one of four House members who have introduced legislation that would implement a severance tax and send 40 percent of the money to education.

DiGirolamo argued a severance tax is the cost of doing business, and that the natural gas industry wouldn’t flee if one was imposed.

“The gas underneath Pennsylvania is pure, it’s abundant and they’re going to be here for a long, long time,” he said.

A briefing paper from the Pennsylvania Budget and Policy Center released in August found that replacing the impact fee with a 4 percent severance tax could bring in $1.2 billion annually by 2019-20. That’s three times more than the impact fee, according to the briefing.

Still, the administration has been firm from the start.

“Regrettably, the administration drew a line in the sand and said there will be no severance tax on natural gas,” said state Sen. John Yudichak, D-Luzerne. “That policy is shortsighted, in my view.”

Andrew Staub is a reporter for PA Independent and can be reached at Andrew@PAIndependent.com. Follow @PAIndependent on Twitter for more.