DeLissio outlines bipartisan plan for 3.2% severance tax on Pa. natural gas

HARRISBURG, Feb. 6 – State Rep. Pamela A. DeLissio, D-Montgomery/Phila., and others called on the state legislature during a Capitol news conference Wednesday to pass a severance-tax bill that would enact a 3.2 percent tax on natural gas extracted in Pennsylvania.

The bill’s other prime sponsors are Reps. Gene DiGirolamo, R-Bucks; Thomas Murt, R-Montgomery; and Harry Readshaw, D-Allegheny. The bill would keep in place the impact fee passed into law in 2012.

"Our proposal, like that of so many other states, is to tax the value of the natural gas produced. Added together, the impact fee and the 3.2 percent drilling tax would equal approximately 5 percent of the value of natural gas sold," DeLissio said. "Pennsylvania, now the second largest producer of natural gas in the nation, is the only major gas-producing state that does not impose a drilling tax.

"Including a severance tax on the value of Pennsylvania’s natural-gas production would generate additional funds above the existing impact fee, while still protecting host communities who benefit from the fee."

During the news conference, DeLissio stated that the budget for the upcoming fiscal year will need to address a greater than $2 billion structural deficit. This deficit was created by the current budget’s reliance on one-time transfers and other unsustainable revenue streams, she added.

"If a severance tax had been passed in 2012 instead of the impact fee, the Commonwealth would have hundreds of millions more in revenue and have experienced fewer devastating cuts to Human Services programs and basic-education funding," she said. "The 2012 legislation favored the industry in numerous ways. This legislation strikes a balance between supporting the natural gas drilling industry and the needs of the citizens of Pennsylvania.

"The governor’s budget address on March 3 will inform us as to whether or not our proposed tax is adequate. The co-prime sponsors on this bill are open to working with the governor to determine how to best meet the needs of our constituents and whether or not our proposed tax is sufficient."