Statement by Donald S. Welsh
President & CEO
The debate surrounding a natural gas severance tax has become the latest political football in budget battles in Harrisburg; one that sidesteps a much deeper and more serious issue: the more than $385 million in additional budget cuts for environmental programs now being discussed in the State Capitol.
These cuts would not only set back Pennsylvania’s cleanup efforts by more than a decade, they would erode the right of every Pennsylvanian to a clean environment uniquely guaranteed by our state constitution. Even in difficult economic times, there is a line between fiscal belt tightening and undermining the state’s capacity to operate at levels sufficient to meet state and federal requirements.
The Department of Environmental Protection and Department of Conservation & Natural Resources are being pushed past that brink now. The latest proposed budgetary cuts would be in addition to the $784 million in funding already diverted or cut from environmental programs this decade alone, including programs to support wastewater treatment plant operations, for staff that review permits and do inspections, insurance to cleanup storage tank spills, local recycling programs, support for watershed restoration and abandoned mine reclamation projects, and revenues diverted from State Parks and Forests and recreation programs.
And these are not just state revenues being lost. Several federal funding programs are provided on a match basis; meaning that for every dollar the state fails to invest in these programs, an addition federal dollar is lost as well. No matter how you look at this, it’s lose-lose for Pennsylvania citizens. This risk now looms for Pennsylvania’s share of the recently re-authorized Federal Abandoned Mine Land Trust Fund – something that Governors Rendell and Ridge, members of the General Assembly, representatives of the Pennsylvania Congressional delegation, and countless community and environmental organizations fought for for more than two decades. Are we going to turn our back on this historic effort?
The bottom line is that we need sufficient revenue to support the very laws and regulations that are enacted every year by the General Assembly and Governor. It is simply irresponsible to underfund these programs, which protect public health, create jobs, revitalize communities, and generate additional economic opportunities.
The Pennsylvania Environmental Council has previously stated our support for a severance tax on natural gas with a percentage of those revenues being returned to the environmental stewardship fund. We support a severance tax not as a magic bullet for budget deficits, or as a roadblock to economic growth, but as a responsible provision for the protection of the environment. This type of tax is widely used in other gas-producing states and polls show that the public supports it as a way to provide support for environmental and conservation programs. If there are actual fundamental inequities or competitive disadvantages in the severance tax proposal let’s get to work now to resolve those issues. Let’s craft a solution that is workable and fair to communities, landowners, and industry and that provides assurance for protection of the environment.
The suggested budget framework just announced by leadership of the General Assembly would require the Department of Conservation and Natural Resources (DCNR) to accelerate the leasing of additional state land for extraction. This proposal is unrealistic and presents serious problems.
First, artificially requiring the leasing of drilling rights on a set schedule without regard to market conditions will result in giving away the right to drill on public lands at bargain basement prices. Second, there is no guarantee the money generated from a lease program would end up supporting environmental programs, as was intended since the Oil & Gas Fund was created more than forty years ago. In fact, $174 million in Marcellus Shale lease revenue was taken from DCNR and used to balance last year’s state budget and more is proposed to be diverted to balance the budget this year.
Third, a mandated leasing may force DCNR to lease lands that are wholly inappropriate for extraction – whether because of sensitive habitat, areas designated as ecotourism regions, or other conditions. Although 74,000 acres of state land have already been leased, because development to-date has been slow, we do not have even close to a reasonable understanding of what expanded drilling will mean for our terrestrial and aquatic resources or public infrastructure.
All Pennsylvania citizens are guaranteed by Article I, Section 27 of our constitution the “right to clean air, pure water and to the preservation of the natural, scenic, historic and esthetic values of the environment.” And in particular, “Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.”
It is the General Assembly and Governor’s obligation to make the environment better, and adequate state funding is the first step in that effort. This right is guaranteed by our constitution. It’s time to find real, fair, and lasting solutions to these funding challenges.