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FOR
IMMEDIATE RELEASE Contact:
Chris
Lilienthal, Communications Director, 717-829-4823, lilienthal@pennbpc.org Gas Drilling Tax Impasse
Costs Pa. $300 Million HARRISBURG,
PA (January 31, 2012) – Legislative inaction on a natural gas drilling tax
has cost Pennsylvania $300 million in lost revenue, according to the
Pennsylvania Budget and Policy Center. State cuts
announced in January to services ranging from help for victims of domestic
violence to hospital trauma centers to prekindergarten could have been
avoided if the Legislature had enacted a drilling tax. The
Pennsylvania Budget and Policy Center is tracking lost revenue through its Drilling
Tax ticker, which measures revenue lost since October 1, 2009 by not
having a tax in place. The ticker hit $300 million Monday, January 30, 2012.
The $300
million in lost revenue may be just the beginning. Reuters
reported last week that a Marcellus Shale “impact fee” bill now before
the state Legislature could cost $24 billion to $48 billion in lost revenue
over the next 20 years. “Drillers
continue to get a free pass in Pennsylvania, while teachers work without pay,
and victims of domestic violence are turned away from shelters,” said Sharon
Ward, Director of the Pennsylvania Budget and Policy Center. Across the
country, 98% of natural gas is produced in states that have drilling taxes or
fees. In many energy-producing states, that revenue supports services like
education and health care, funds environmental
conservation and protection, and mitigates the impact of drilling on local
communities. Pennsylvania
is the largest mineral-rich state in the nation without a drilling tax or fee
of any kind. All 11 states with more gas production than Pennsylvania have a
tax or fee. Unlike those states, Pennsylvania is giving away a one-time
resource. “Lawmakers
have put the interests of out-of-state drillers like Exxon Mobil and Shell
ahead of the interests of Pennsylvania communities,” Ward said. In a recent
report, Reuters calculated that at current gas prices a
Pennsylvania shale well would generate $2.4 million over 20 years
under a tax comparable to West Virginia’s. By comparison, an impact fee
approved by the state Senate would generate only $360,000 over that 20-year
period. Based on
an industry estimate that Pennsylvania will have 11,500 wells operating by
2020, Reuters determined that Pennsylvania will lose at least $24 billion in
gas revenues over 20 years – and much more if natural gas prices rise. “Giving
drillers that kind of tax break will come out of the pockets of working
Pennsylvania families now and for decades to come,” Ward said. “Pennsylvania
can do better.” View
PBPC's Drilling Tax Ticker at http://pennbpc.org/gas-drilling-tax.
The Ticker can be embedded on other web sites by copying the "Embed
Code" from the upper-right-hand corner of the Ticker. |
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The Pennsylvania Budget and Policy Center is a non-partisan policy research project that provides independent, credible analysis on state tax, budget and related policy matters, with attention to the impact of current or proposed policies on working families. |