07/08/24 - 115 New Stories - REAL Environmental & Conservation Leadership In PA: http://tinyurl.com/ype6tnrj
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House Hearing On Severance Tax, Groups Urge Renewal Of Growing Greener
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Witnesses testifying at a public hearing this week by Reps. Greg Vitali (D-Delaware) and Tim Briggs (D-Montgomery) said they support legislation that would tax Marcellus Shale natural gas drilling to help minimize cuts in next year's budget, fund the Growing Greener program and compensate municipalities impacted by drilling.
"A drilling tax needs to be part of the budget discussion this year because the Commonwealth is facing a $4 billion deficit," said Rep. Vitali. "Pennsylvania is the only major natural gas producing state in the nation that does not have a severance tax or fee in place. It’s time for Pennsylvanians to get some of the benefit."
"I will continue the push for a severance tax on natural gas extraction to ensure that drillers who are profiting from our natural resources pay their fair share and do not to allow this burden to fall on the backs of hardworking Pennsylvanians," said Rep. Briggs.
The hearing was held in King of Prussia by the House Democratic Policy Committee to examine Rep. Vitali's legislation-- House Bill 33. It would impose a tax slightly less than one in West Virginia -- about 6 percent of the market value of the gas. Rep. Vitali said this rate was selected because it has proven effective and should not hinder the growth of Pennsylvania’s natural gas industry.
"The tax structure proposed does not pick winners and losers among drillers," said Michael Wood, a Pennsylvania Budget and Policy Center researcher who testified at the hearing. "Setting the tax just under that in neighboring West Virginia eliminates an unnecessary incentive to drill in one state or the other."
The tax would generate about $200 million in fiscal year 2011-12, increasing to nearly $420 million by fiscal year 2015-16. The revenue would be shared equally by the state’s general fund, environmental programs and local governments.
It would also provide funding for Pennsylvania’s Growing Greener program, which is running out of money. The program has helped to preserve more than 75,000 acres of Pennsylvania farmland and open space, restored 16,000 acres of abandoned mine land and improved over 230 community parks in the past four years.
"The Environmental Stewardship Fund is being depleted at an alarming rate and if we do not immediately identify ways to renew its funding, the incredible work Growing Greener has been able to accomplish will cease to exist," said Andrew Heath, executive director of the Renew Growing Greener Coalition. (Click Here for full testimony)
"It is possible to save Growing Greener. First, as an emergency, short-term action, the Administration must divert the Growing Greener II Bond debt service out of the Environmental Stewardship Fund," said Heath. "When the Growing Greener II Bond was established in 2005, the enabling legislation allowed for the Governor to take up to $60 million from the Environmental Stewardship Fund to pay the debt. This is robbing Peter to pay Paul. This is making Growing Greener I pay for Growing Greener II.
"The estimated revenue coming in to the Environmental Stewardship Fund next year for Growing Greener projects is $65-$70 million. The estimated debt expense is $45-$50 million. This leaves $15-$20 million remaining for projects. It is scary to think that we will be going from a level of funding in 2007-2008 of $200 million, to a level of funding as low as $15 million next year. This will kill the Growing Greener program," said Heath.
“Additional revenue sources will need to be identified in order to renew Growing Greener; the diversion of the debt service is the first step in a longer process,” said Heath. “The Coalition believes that drilling tax legislation in Pennsylvania must include a substantial allocation to the Environmental Stewardship Fund, as House Bill 33 proposes. When we deplete our natural resources, we have a responsibility to future generations to reinvest in those natural resources. Dedicating a significant portion of drilling tax revenue to the Environmental Stewardship Fund and Growing Greener helps to ensure that drilling does not diminish our shared environment.”
Oliver Bass, Vice-President of Communications and Engagement for Natural Lands Trust, also provided testimony, noting that Growing Greener has done more than just preserve Pennsylvania’s land, water and air and provide recreation opportunities to the state’s communities, residents and visitors.
“It has contributed billions of dollars to the state’s economy in jobs, taxes, tourism and other revenue,” said Bass. “Renewing and expanding funding for Growing Greener is an essential investment in the state’s economic recovery and long-term prosperity.”
Fish and Boat Commission Executive Director John Arway testified in support of the bill, which would give the commission 1.4 percent of the tax revenue.
"We just do not have enough people or enough hours in a day to adequately keep up with the volume of Marcellus gas well development projects," Arway said.
Also testifying were Olivia Thorne, president of the PA League of Women Voters; Lisa Schaefer, government relations manager of the County Commissioners Association of Pennsylvania. Officials from Range Resources and the Marcellus Shale Coalition were invited to represent the drilling industry, but declined to attend.
A copy of testimony presented is available online.
More Upbeat About Possibly Smaller State Deficit
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2/28/2011 |
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