Terminology aside, Pa. natural-gas levy became inevitable

February 12, 2012|By Angela Couloumbis, Inquirer Harrisburg Bureau
  • State President Pro Tem Joe Scarnati (right) in 2009 with Sens. Jake Corman (left) and Dominic Pileggi.

HARRISBURG - You say "fee." I say "tax."

But here in the Capitol, at least, it doesn't matter much anymore, since no one is calling this deal off.

For the first time since politicians began seriously throwing around the idea in 2009, Pennsylvania will impose a levy on extraction of natural gas from the Marcellus Shale. Gov. Corbett is expected to sign it into law this week.

He is the same Corbett who ran in 2010 on a pledge to raise no taxes, and who bristled when anyone, Democrat or Republican, suggested he ease the state's budgetary woes by hitting the burgeoning natural gas industry with a tax.

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His ironclad stance is one big reason the bill that awaits his pen has the drillers paying a local-impact fee, not a tax.

But even before the ink was dry on the 174-page bill, questions were being asked in many quarters: Is this soon-to-be-law  fee all that different from a  tax? Or is it just a linguistic way of saving face?

"Ultimately, I think it's a political question," said Joel Burcat, an environmental lawyer with Saul Ewing who specializes in oil and gas law. "I personally don't think you can call it a tax, but I know there are those who will."

Indeed, there is a chorus.

The Republican legislator who pushed hardest for it said even he occasionally forgets himself and calls it a tax. Several conservative groups say it is a punishing tax, capable of doing what Corbett vowed to avoid: driving away an industry that is creating jobs.

"A fee is tied to actual impacts, whether regulation, or inspection, or actual costs to the government for an activity," said Matt Brouillette, who heads the Commonwealth Foundation, a Harrisburg-based free-market think tank. "This fee is tied to gas prices and has nothing to with actual costs."

Americans for Tax Reform (ATR), the Washington-based group led by Grover Norquist, e-mailed Pennsylvania legislators last week as they were poised to vote on the bill: "ATR will notify and remind your constituents as to how you vote on this unnecessary tax increase."

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