Big budget cuts? We smell gas

Gov. Corbett delivers budget address with Rep. Sam Smith (center) and Lt. Gov. Jim Cawley looking on.
Gov. Corbett delivers budget address with Rep. Sam Smith (center) and Lt. Gov. Jim Cawley looking on.
Posted: March 09, 2011

IF THERE were a moral to the story that Gov. Corbett spun yesterday in his much-anticipated, first budget talk, it was that all wealth is not viewed equally - at least not when it comes to Corbett's notions about bailing Pennsylvania out of its $4 billion budget hole.

To middle-class state employees, to upwardly mobile college students at Pennsylvania-funded universities, to the working poor who've looked to Harrisburg for affordable health insurance, Corbett sent out more sacrifice signals yesterday than a third-base coach on a built-for-speed baseball team. He even urged that teachers take a one-year pay freeze - an issue not under his direct control.

"If government is here to share the taxpayer's wealth then everyone needs to share in the sacrifice," said the new governor, whose relaxed posture and shock of white hair threw off an aura of imperial calm, even as he metaphorically jabbed a budget dagger so sharp that it would have made Caligula proud. "Educators, Pennsylvanians await your decision."

But there's another group that's tapping into big-time wealth - a buried treasure right here in Pennsylvania - that isn't facing the kinds of tough decisions that cause a pay-frozen schoolteacher's family to cut back on groceries or cancel a weekend down the shore.

That would be the economically booming, mostly out-of-state natural-gas companies and their multimillionaire CEOs, who continue to rapidly expand their aggressive form of drilling known as hydrofracking, or simply "fracking," across large swaths of upstate Pennsylvania. The companies take in hundreds of millions of dollars without paying any dedicated Pennsylvania tax - even as such levies are imposed in the other 14 of the top 15 gas-producing states.

In a remarkable coincidence, 2010 gubernatorial candidate Corbett received a whopping $835,720 from oil-and-natural gas interests, including his largest single contributor - Marcellus Shale driller Terry Pegula and his wife, Kim, who gave $305,000 to his campaign at the same time Pegula was selling his exploration firm to Royal Dutch Shell and pocketing $3 billion.

Indeed, Corbett's career in elective politics was launched in 2004 when an Oklahoma gas driller - Aubrey McClendon, of Chesapeake Energy - funneled most of the dollars for an eye-popping $480,000 donation that went to Corbett's attorney-general campaign from an obscure GOP fund.

There's a saying in politics that a budget is really a political document and that was never truer than yesterday, as Corbett made it clear that he believes in a conservative, tea-party-flavored philosophy that sees middle-income public employees like teachers as feeding too well at the taxpayer trough while government's main role for big business is to get the heck out of the way, that - in the governor's own words on gas drilling - "Limited government means not mistaking someone else's property for your own."

Longtime political scientist and pundit G. Terry Madonna, of Franklin & Marshall College, sees Corbett on the road to becoming the most radical Keystone State governor in our lifetime. After yesterday, it's hard to disagree.

"Their philosophy is that the public sector is fat and bloated," said Madonna, who said he was stunned by the governor's scheme to cut about $625 million - which is more than half - for 14 state-owned colleges and universities and state-backed schools like Temple, Penn State and Pitt.

But what has many folks surprised is the other side of the equation: Corbett's steadfast opposition to any kind of tax on the state's fastest-growing industry, the drilling for natural gas buried under the Marcellus Shale formation that has quickly become a more than $2 billion-a-year enterprise.

Although Corbett was elected on a no-new-taxes pledge, several polls have shown that about 60 percent of Pennsylvanians would still support taxing the natural-gas drillers at a rate similar to the other energy-producing states.

Several lawmakers - such as Democratic state Rep. Greg Vitali, of Delaware County - are pushing for exactly that: a tax on gas production just a tad lower than the rate charged in neighboring West Virginia, which would bring in an estimated $200 million in the coming fiscal year and would rise to an estimated $400 million annually as drilling increases.

"Wealthy drillers are making tons of money while dramatically changing the character of the countryside - and they ought to pay their fair share," Vitali said. "It's absolute insanity. It's absolutely indefensible."

That's especially true in the context of a budget that also dramatically alters Pennsylvania's compact with its middle class by taking the drill bit to public schools, higher education and health-care programs like the adultBasic insurance plan for the state's working poor and unemployed that expired last week.

After all, $200 million in gas-tax money could, in theory, have more than restored adultBasic ($161 million), or prevented the funding cuts for not only Temple but Pitt (roughly $176 million combined) or seriously mitigated some of the feared budget impact in Philadelphia, where officials yesterday warned of an impact on full-day kindergarten and programs for the homeless.

But that would have thwarted Corbett's almost tone-deaf vision, which ignores alarming recent news reports about the environmental impact of the gas-drilling bonanza - such as what a federal official called untested "mystery liquids" dumped into Pennsylvania waterways.

In a 45-minute speech that made no mention of alternative energy or that fact that Pennsylvanians are paying through the nose for our addiction to fossil fuels, the fact that Corbett seemed to relish a future landscape of pipelines that would make swaths of the state resemble Exit 12 of the New Jersey Turnpike was almost beside the point.

That point being that it was not the Marcellus Shale but the middle class that was getting drilled in Pennsylvania yesterday.

Or, to bring it more up-to-date, getting fracked.

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