Rendell's proposed severance tax does set aside money for local municipalities

BY JAMES LOEWENSTEIN (STAFF WRITER)
Published: May 25, 2010

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Ten percent of the revenue from Gov. Ed Rendell's proposed severance tax on natural gas would be set aside for municipalities where drilling activity occurs, despite statements to the contrary that were made by state Rep. Tina Pickett, which were published last week in The Daily Review, according to the governor's deputy director of communications.

In articles in Friday's and Saturday's Daily Review, Pickett was quoted as saying that Rendell included in his proposed state budget for the upcoming year a proposal for a severance tax on natural gas, whose revenue would entirely go into the state's General Fund, with none of the tax revenue to be set aside for local municipalities.

After Friday's article was published, Rendell's deputy director of communications, Michael Smith, e-mailed The Daily Review asking the newspaper to correct Pickett's statements.

When asked for comment on Monday about Smith's statement, Pickett first consulted with the Republican executive director of the House Appropriations Committee, Ed Nolan. After speaking to Nolan, Pickett then reported that when the governor originally proposed his budget in February "he gave no one numbers or an indication (that there would be) a local share" of the severance tax revenue that would be set aside for municipalities.

She said she had not been aware until now of the 10 percent set-aside.

And she said the governor's office is now claiming that its intention all along was to have a 10 percent set-aside for local municipalities.

However, Smith said Monday afternoon that Rendell's proposal for a 10-percent set-aside of severance tax revenue for municipalities was included in a fact sheet on his budget, which was posted on the governor's Web site on Feb. 9, the day Rendell proposed his budget. Information about the 10 percent set-aside was also distributed to the media statewide on Feb. 9 in a packet on the budget, Smith said. And the governor's proposed budget for the 2010-11 fiscal year, which is posted on his Web site and has not been changed since Feb. 9, also includes information on the 10 percent set-aside, Smith said.

Information about the 10 percent set-aside can be found by going to www.pa.gov, and then clicking on "2010-11 Budget."

James Loewenstein can be reached at (570) 265-1633; or e-mail: jloewenstein@thedailyreview.com.

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5 posted comments

REMEMBER NOVEMBER!!
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Concerned Citizen,  05/25/10 6:54
Add a local ten percent to whatever share the county would get just from the tax's input to the general fund, by virtue of being a county in the commonwealth, and given the magnitude of the extraction dollars we're talking, this is some mega bucks. Too bad we can't do it like Alaska, where residents get a share just because they're residents.
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wishful thinking,  05/25/10 11:56
Tina - please write a guest op-ed piece for all of the newspapers in your district (can't play favorites, you know) stating how you or your party is helping those negatively impacted by the drilling.

Side note: I feel sorry for the out-of-area hunters who bring their tourism dollars here every year who will be unable to secure affordable accommodations this fall.

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BC Native,  05/25/10 9:43
Do the math - I can't, as my old calculator only goes to ten digits. If the companies are paying a billion out to landowners, figure what their take is from the production. Take ten percent of that and give it back to the county to distribute to townships and schools. Property taxes to support schools would be a thing of the past. Roads and bridges would be safe and solid, and able to withstand the traffic we're seeing. I can't see a downside to this except that it doesn't begin to compensate us for what's going to happen to our county.
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go for it,  05/25/10 8:31
Oh wow! A whole 10%...that is very bad odds! I'll gamble that more then 10% goes to Phila & Pittsburg!
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don't like the odds,  05/25/10 6:28