Pennsylvania Senate wraps up with no proposal for tax on gas from Marcellus Shale

HARRISBURG - In a burst of last-minute activity, the Pennsylvania Senate wrapped up its final scheduled work day of the 2009-10 legislative session by approving dozens of bills on an array of topics, from the controversy-plagued Delaware River Port Authority to pension funds, gun owners' rights, and overcrowded prisons.

The chamber took no action, however, on the 800-pound gorilla in the room: the proposed imposition of a tax on natural gas extracted from the Marcellus Shale.

Senate leaders say that if an agreement is reached with the House and Gov. Rendell on a natural-gas tax in coming days, they may yet schedule days next week to vote on the proposal.

Proposals to tax the state's newest growth industry - drilling operations in the gas-rich Marcellus formation - have risen and fallen for the last two years. Rendell and other Democrats generally support such a tax as a way to bulk up the state's recession-depleted revenues and fund environmental protections. Republicans warn that too steep a tax could drive drillers away.

Most measures approved Thursday by the GOP-controlled Senate now go to the state House, where Democrats have a slight edge. Among them:

Pensions. The Senate approved, 41-8, a bill overhauling the pension plan for government employees to address multibillion-dollar debts looming over depleted pension funds.

The bill is designed to generate $3 billion in savings for Pennsylvania's public-employee and teacher pension funds while addressing an impending spike in payouts from those funds, said sponsor Sen. Pat Browne (R., Lehigh).

But the measure may face a rough ride through the House. Shortly after it passed, House Democratic leaders issued a statement saying the Legislative Reference Bureau had found the bill unconstitutional because it violates the single-subject rule of the state constitution.

Under the bill, pension-plan benefits would be rolled back 25 percent, to pre-2001 levels, and the vesting period would be increased from five years to 10.

Browne's measure also stipulates that employees would have to compile a combination of age and years of service that totals 92 to receive full retirement benefits.

The bill also creates an Independent Fiscal Office, a nonpartisan bicameral agency that would develop state-revenue estimates and analyze spending proposals. The office is the brainchild of Senate Republicans, who have sparred with Rendell and House Democrats over revenue estimates.