Time running out for gas severance tax

Published: October 19, 2010

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In a state where lawmakers are worried more about governance than politics, placing a fair tax on the extraction of natural gas would be an easy call. Every gas-producing state except Pennsylvania has one, after all.

But from Harrisburg taxpayers get only rhetoric rather than revenue. If state politicians' hot air were combustible, the nation's energy problems would be resolved without having to tap the abundant methane trapped in the Marcellus Shale.

Lawmakers made much of their alleged signal achievement earlier this year, when they adopted the new state budget by July 1, the beginning of the current fiscal year. That was crucial in this election year because of their failure last year to pass a budget until 101 days after their deadline.

But the "timely" budget they adopted this year was predicated upon adoption of a "severance" tax on Marcellus Shale gas by Oct. 1.

Now, without a severance tax in place, the budget itself is a sham and lawmakers are, in effect, again nearly three weeks late in passing a valid budget.

The House has passed a severance tax of 39 cents per 1,000 cubic feet of gas, an effective rate of about 7.3 percent that is comparable to taxes placed on gas extraction in other states.

Senate Republicans' proposals are little more than farcical giveaways to the gas industry. Proposed rates are as low as 1.5 percent for the first five years of a well's production.

The administration has proposed a compromise but Senate Republicans so far are refusing to discuss it, preferring to try to force the issue into next year after elections are over and new faces are in the Capitol.

In doing so they are low-balling Pennsylvanians while pandering to corporate interests headquartered mostly in the South. And they are breaking their own promise to adopt a severance tax as a key component to a balanced budget. They should remedy that before the current legislative session ends in a few days.

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