The Pennsylvania General Assembly's gas-filled rooms

August 23, 2010|By BEN WAXMAN
  • A natural-gas drilling rig at work in Susquehanna County.

NOTE: THIS STORY HAS BEEN CORRECTED.

ONE OF THE big questions this fall on the state's legislativeagenda is how much of a tax will be imposed on companies extracting gasfrom the Marcellus Shale formation.

The legislature failed to impose a tax last year, but didauthorize a tax. The amount of the tax will be determined in the fall.

It's worth asking why such a tax failed - at a time when thestate was facing a $3.2 billion budget shortfall, and when every otherstate with gas drilling imposes an extraction tax - especially sincethe answer will likely have a big impact on this year's debate over howmuch to tax.

Story continues below.

Opponents of the tax say that they were hesitant to impose atax on a fledgling industry before it got established in the state.

That's one argument. Another is that the natural gas industrypoured so much money into lawmakers' campaign accounts that it was ableto buy favorable legislation from state lawmakers. It did this out ofthe public eye, yet perfectly legally. And thanks to loopholes in thelaw, it's likely to do it again.

"This fall, there's a 18-day period from Sept. 13th to Oct. 1when lawmakers will be able to rake in cash from the gas industry andnot have to report it until after their tax votes are cast."

Last year, natural-gas companies dumped thousands of dollarsinto the campaign coffers of state politicians. We know about thedonations now, but most of them were hidden from public view untilafter the tax debate had ended.

Here's how: On May 26, 2009, lawmakers introduced a bill thatincluded an extraction tax. While the bill bounced back and forthbetween the House and Senate for four months, natural-gas drillersdonated a whopping $191,042 to candidates, lawmakers, and politicalaction committees, according to an analysis by Pennsylvania CommonCause. By the end of the process on Oct. 9, the part of the bill thatwould have taxed natural gas extraction was gone from the legislation.

If lumped together, the amount donated by gas companies duringthis period alone would make the industry the fourth-largest singlecontributor in the state, behind only the Pennsylvania Republican Party($1,987,099), Philadelphia Trial Lawyers Association ($1,595,000) andInternational Brotherhood of Electrical Workers Local 98 ($212,500).(Environmental groups gave, too, in opposition, but totals aren'tavailable.)

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