Area counties' Shale impact fees up 15.5%

Revenue from the Marcellus Shale impact fees go mainly to the counties and municipalities where the drilling has taken place.
Revenue from the Marcellus Shale impact fees go mainly to the counties and municipalities where the drilling has taken place.
Posted: June 17, 2014

Philadelphia and four surrounding counties will receive $3.9 million this year from the Marcellus Shale impact fee, up 15.5 percent from last year, according to figures released this month by the Pennsylvania Public Utility Commission.

In the three years Pennsylvania has collected the impact fee on unconventional natural gas wells, the five counties in the Philadelphia area have received $10.7 million out of the $626 million assessed.

The fee revenue is distributed primarily to towns and counties in areas where gas drilling is taking place. Other counties get smaller amounts based on a formula linked to population and local road mileage.

Though the impact fee survived a Pennsylvania Supreme Court ruling in December that struck down key provision of the legislation that enabled the fee, it now is facing a political challenge in Harrisburg about whether it should be retained for a fourth year.

Amid a debate about how to close a $1 billion-plus gap in Gov. Corbett's budget plan for the fiscal year beginning July 1, a growing number of lawmakers are calling for the state to enact a severance tax on natural gas production to replace the impact fee. A 5 percent severance tax, which would be assessed on the value of the natural gas produced, would generate about three times as much as the impact fee.

Tom Wolf, Corbett's Democratic challenger in the November election, also says he supports a "responsible and reasonable" severance tax.

Opponents of a severance tax say that gas drilling-companies already face high corporate taxes in Pennsylvania.

But the Pennsylvania Budget and Policy Center countered last week with a report saying that oil and gas extraction companies paid $10.3 million in corporate income taxes in 2013, less than the $19.6 million paid in 2008 when production was much lower.

The Marcellus Shale Coalition, an industry trade group, did not dispute the center's numbers, but questioned the motives of an organization it says is advancing an agenda supported by public-sector unions.

"Unfortunately, shortsighted election-year calls for new taxes on one of our most promising industries will lead to fewer jobs, lower energy production and less tax revenues," a coalition spokesman said in a statement.

More details on impact fee allocations are available on the PUC's website: http://bit.ly/196AlcB


amaykuth@phillynews.com

215-854-2947 @maykuth

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