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Missing out on state revenue

Published February 26. 2011 09:00AM

Dear Editor:

The Pennsylvania Budget and Policy Center (PBPC) estimates that by failing to levy a severance tax on natural gas production in the Marcellus shale, Pennsylvania has missed out on $135 million and counting thus far. That's new revenue desperately needed for a state that is facing a projected budget deficit of $4 billion. When Governor Corbett proposes his budget plan next month, our communities are likely to be faced with deep and painful cuts. That's why considering a shale tax becomes even more important. Unfortunately, given the actors involved in our legislative process, the natural gas industry is likely to be given a pass.

Since November, it has become a well known fact that Governor Corbett has been the recipient of nearly $1 million in campaign contributions from companies involved in the oil and gas industry. The Governor has been the biggest benefactor of contributions from these companies. The second? State Senate President Joe Scarnati, who has accepted more than $117,000 in contributions according to Common Cause Pennsylvania, a government-watchdog group. Senator Scarnati made the headlines again recently when it was reported that Consol Energy, Inc., one of the largest natural gas drilling companies in the state, picked up the tab for his trip to the Super Bowl in Dallas. Consol paid for his ticket to the big game, his plane ride, and his hotel bill. Pennsylvania law allows legislators to accept gifts like Senator Scarnati's Consol-sponsored Super Bowl trip as long as he reports it on his financial disclosure forms, but accepting such perks from corporations doing business with the commonwealth should raise a red flag for any interested observer. Given Senator Scarnati's stature as the presiding officer of the State Senate, it should give all Pennsylvanians additional reason for concern.

State Representative Doyle Heffley has fallen in line with his Republican colleagues in Harrisburg against a severance tax. This, despite a January poll conducted by the Pittsburgh Tribune-Review found that nearly two-thirds (63%) of registered voters were in favor of taxing the Marcellus shale gas industry. Fifty six percent of registered Republicans responded that they favored a tax, putting them at odds with most of their party's lawmakers in Harrisburg. Representative Heffley maintains that a tax would have a negative effect on the natural gas drilling industry. The PBPC cites studies done in Wyoming, Utah, and other natural gas drilling states that show reasonable tax rates have had little effect on the industry. Companies base their drilling decisions on the location of natural gas reserves and given the size and potential of the Marcellus shale, we shouldn't expect companies like Consol Energy to pack up and leave overnight.

A reasonable severance tax could mean many things like new revenue for a state sorely needing it and protection for communities from potential environmental problems that drilling may present. From Palmerton to Panther Valley, schools, citizens, and government agencies can't afford the cuts they'll likely incur come budget time. We understand the risks presented to our environment by energy companies looking to turn a profit. We need the revenue and regulation that are possible with industry in the Marcellus shale. Here's hoping our elected leaders in Harrisburg feel the same way.

Billy O'Gurek, Chairman

Carbon County Democratic Party

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