As part of the 2010-2011 budget, the House, Senate and Governor Rendell agreed to implement a natural gas severance tax by October 1st. No details of the tax were agreed upon.
Ask your Representative and Senator to support a severance tax that dedicates a very significant portion of revenues to the environmental stewardship fund (Growing Greener).
Tell them that since our natural resources are heavily impacted by drilling, it would be wrong to enact a tax that did not reinvest in Pennsylvania’s natural resources.
Contact your Legislator! (Find your legislator's information)
BACKGROUND
Fair Share
In these tough economic times, as Pennsylvanians pay their taxes, the natural gas industry should pay its fair share as well. Yet Pennsylvania is the only major gas producing state that does not assess a severance tax on natural gas drilling. A natural gas severance tax would at least in part compensate for damage -- present and future -- to natural resources and public infrastructure and for the depletion of a nonrenewable resource.
Tax is Not a Drilling Disincentive
The severance tax would not create any greater disincentive to drilling than in other states; in fact, Pennsylvania has tremendous competitive advantages. Its vast gas resources are located where demand is huge. Since transportation is the largest factor in the cost of natural gas, PA gas can outcompete other states on location alone. Although drillers complain loudly about PA’s high corporate net income tax rate, the reality is that nearly all extraction companies are structured to avoid these taxes. The Governor’s proposed severance tax rate is five percent of the value of the natural gas at the wellhead, plus 4.7 cents per 1,000 cubic feet of natural gas removed, the same as West Virginia’s tax.