House Adds Environment Funding to Marcellus Tax
Washington PA Observer Reporter
29
September 2010
HARRISBURG - The state House of Representatives on Tuesday made a
last-minute change on a Democratic bill to impose a tax on natural-gas
drilling, adding money for environmental causes that drew dozens of
Republican votes.
The amendment to the gas tax bill, which passed 154-45, would dedicate
60 percent of the revenue for local municipalities and environmental
needs. The other 40 percent would go into the state's general fund.
A previous version of the bill had earmarked 60 percent for the general
fund, but hours into the debate Tuesday the Democratic leadership
suddenly backed the amendment by Rep. Kate Harper, R-Montgomery.
The change delayed a final House vote on the bill until today. Whatever
passes is nearly certain to be changed in the state Senate.
The proposal would tax the gas at the rate of 39 cents per 1,000 cubic
feet, which could increase with the price of natural gas. The tax is
projected to net more than $316 million in 2011-12, its first full
year. For the first three years, the revenue will be divided 60-40
after the first $70 million is sent to the general fund and $5 million
goes into job training.
A natural-gas drilling procedure called hydraulic fracturing, or
fracking, is being studied by the U.S. Environmental Protection Agency
as drillers swarm to the lucrative Marcellus Shale region primarily
beneath Pennsylvania, New York, West Virginia and Ohio. Critics say
fracking could poison water supplies, while the natural-gas industry
says it's been used safely for decades.
Harper's amendment would shore up the state's Growing Greener
environmental program, which she said was nearly out of money. It also
would increase funding for the Environmental Hearing Board.
"My amendment would put the money from the tax into places where we can
be prepared to deal with the cost of any errant fracking or any errant
drilling," Harper said.
Local government services would receive 16 percent of the tax revenue,
with a disproportionate amount going to areas in the wide swath of
Pennsylvania where natural gas is being drilled.
Earlier, Republicans who represent areas with heavy Marcellus drilling
activity argued the economic boost their constituents are experiencing
would be at risk if a tax is imposed.
"This tax would place Pennsylvania, once again, at a noncompetitive,
economic disadvantage," said Matt Baker, R-Bradford.
Rep. Jeff Pyle, R-Armstrong, warned a tax could push drilling companies
to other states. "This redistribution of wealth on a first-time tax of
39 cents that has never been borne by a Pennsylvania landowner is
nothing more than increased spending," Pyle said.
Several Republicans complained that the tax bill had been rushed
through Appropriations a day earlier, a procedure that allowed
Democratic leaders to bypass dozens of proposed amendments.
House Majority Leader Todd Eachus, D-Luzerne, told reporters afterward
that he decided midway through Tuesday's debate that Harper's amendment
"made good bipartisan sense."
"If you live in a place that there's drilling, you understand the
danger to clean water and the environment," he said.
Several members remarked they were looking past the House vote to the
Republican-controlled Senate and to next year, when a new governor
could make imposition of a new tax difficult.
Rep. Mike Hanna, D-Clinton, said failing to act now would delay passage
of a natural-gas drilling tax for at least five years.
"That's the reality you're going to have to face with your
constituents," Hanna said.