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GOP lawmakers join call for higher tax on Marcellus drillers - abc27 WHTM

GOP lawmakers join call for higher tax on Marcellus drillers

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HARRISBURG, Pa. (WHTM) -

Are the companies that drill for gas in Pennsylvania's Marcellus Shale region properly taxed?

For years, Democrats have said no, that gas is an undertaxed source of revenue that could be curing myriad ills in the commonwealth.

On Tuesday, at least two Philly-area Republicans joined that chorus. Rep. Gene DiGirolamo (R-Bucks) and Rep. Tom Murt (R-Montgomery/Philadelphia) aligned with a pair of Democrats in proposing a severance tax of 4.9 percent.

"We think it's reasonable," DiGirolamo said at a Capitol news conference. "We think it's fair, we think it's the right thing to do."

Currently under Act 13,  drillers pay roughly three percent in what's called an "impact fee." The money goes to communities that host drilling and the agencies that regulate it.

The Murt-DiGirolomo proposal, along with Democrats Pam DeLissio (Montgomery/Philadelphia) and Harry Readshaw (Allegheny) would steer 40 percent of the tax revenue to the impacted communities, but send 60 percent statewide to enhance funding to schools, the environment and human service programs.

The state's top teacher's union, the Pennsylvania State Education Association, environmental group PennFuture, and the Service Employees International Union all support the idea and spoke at the news conference.

"We have working Americans that can't afford to pay their bills and feed their families," said Kathy Jellison, executive director of SEIU. "All the time we're sitting on the mother lode of Marcellus Shale here in Pennsylvania that could be helping Pennsylvanians."

There are critics of the tax proposal.

"Gas drilling is saving our economy and these folks want to tax it and kill it," said Kevin Shivers, executive director of National Federation of Independent Business, a small business advocacy group.

Shivers points out that drillers have paid $400 million in impact fees and have created tens of thousand of jobs. The companies pay business taxes and their employees pay income taxes. Why, Shivers wonders, is the industry being targeted?

"I think it's indicative of the old style of doing business in Harrisburg, and that is just to continue to grow government as normal and look for somebody else to pay for it," Shivers said.

But Murt, the Republican, has adopted a Democrat's mantra on this issue.

"It's time for the natural gas industry to pay their fair share," Murt said.

Senate Republican Leader Dominic Pileggi dismissed the taxing proposal because, he said, the governor would never sign it, so it's not worth the legislative exercise.

But Pileggi, himself a Philly-area lawmaker, concedes there's likely a $1.4 billion deficit for next year, and he hesitated when asked if the current impact fee on gas drillers is good enough.

Does he personally believe they're paying their fair share?

"I think we have the best we can get under the existing structure we have here in Harrisburg," Pileggi said. "The governor has said very clearly he would not sign a straight-up extraction tax."

Pileggi went further, predicting that the question to tax or not to tax drillers will be central to next year's governor's race. The Democrat, he said, will promise to increase taxes on Marcellus drillers. Corbett will promise not to. Voters will decide.

That could be bad news for Corbett, as current polls suggest that a majority of Pennsylvanians don't think drillers are properly taxed.

It's significant that Republicans, like Murt and DiGirolomo, are breaking ranks even if their proposal falls into a legislative black hole. Murt insists an overwhelming majority of his constituents support an increased tax on drillers.

Is he worried about pushback from his caucus colleagues?

"I know right from wrong," Murt said with emotion in his voice. "Assessing this tax, proposing this tax, beginning this discussion is the right thing to do in the Commonwealth of Pennsylvania."

 

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