Marcellus Shale tax would provide valuable revenue to Pennsylvania
House Democrats have outlined their efforts since 2010 to improve tax fairness as it pertains to Marcellus Shale Development
As Pennsylvania faces a nearly $2 billion structural deficit brought on by years of Republican budgeting full of one-time gimmicks and smoke and mirrors, a Marcellus Shale tax could provide much needed help in closing the hole left by Republican leadership.
Presently, Pennsylvania imposes an “impact fee” on drilling companies. However, estimates show that a Marcellus shake tax – one similar to the drilling taxes enacted by every major gas-producing state – would generate much more revenue than the impact fee currently generates.
A recent study by the Pennsylvania Budget and Policy Center finds that a shale tax, compared to the current impact fee, could generate up to three times the revenue for Pennsylvania. This revenue could go a long way toward closing the budget gap left by the previous administration.
While the impact fee is based only on the number of wells drilled each year and the price of natural gas, a severance tax could be based on the amount of gas produced and the price of gas. This would give Pennsylvanians a fairer return on the natural resources being removed from the state.
In addition, it would make the major gas companies pay their fair share for extracting Pennsylvania’s natural resources.