The Pennsylvania Environmental Council today urged members of the House Environmental Resources & Energy Committee, who will meet next week to consider House 1489 (establishing a severance tax on natural gas extraction), to dedicate a meaningful percentage of any severance tax revenue to restoration and community programs.
To: Members of the House Environmental Resources & Energy Committee
From: Don Welsh, President and CEO, Pennsylvania Environmental Council
Re: House Bill 1489 (P.N. 1853)
On Tuesday June 23rd the House Environmental Resources & Energy Committee will meet to discuss House Bill 1489, sponsored by Chairman Bud George, which would enact a severance tax on natural gas extraction in Pennsylvania. As part of a broad coalition of environmental, sportsmen, conservation, and local government interests, the Pennsylvania Environmental Council (PEC) is supportive of a severance tax provided a meaningful percentage of revenues derived from the tax are dedicated to the Environmental Stewardship Fund to help address restoration needs across the state; particularly those resulting from extraction activities. We also support dedicating a portion of tax revenues to help local governments address community and infrastructure impacts resulting from extraction activities.
It is our understanding that an amendment will be offered on Tuesday that would dedicate tax revenues for such purposes.
Given extraordinary budget circumstances, coupled with unprecedented reductions in environmental and conservation program funding, we believe a severance tax makes sense for Pennsylvania to help fund associated state programs. According to a report recently published by the Pennsylvania Budget and Policy Center, Pennsylvania is the only major fossil fuel-producing state that does not levy a mineral resource extraction tax. The study also found Marcellus Shale producers, who are accustomed to paying such severance taxes in other states, do not pay Pennsylvania’s Corporate Net Income Tax because of the way they are incorporated.
Further, a recent bipartisan poll found 87 percent of the public supported using revenues from the enactment of a severance tax on natural gas production to benefit environmental programs.
A meaningful percentage of the revenues generated from any severance tax must be reinvested in the environment, public resources and local communities that will bear the greatest impacts of extraction activity. Public and private water supplies, local infrastructure, natural ecosystems, and recreational assets will all be affected. We should not miss a chance to secure a dedicated funding source to help address those impacts, as well as to maintain and enhance the very natural resources that generate real economic returns for our state.