Gas tax is 'dead'
HARRISBURG, Pa. — A proposed tax on natural gas extraction in Pennsylvania "clearly is dead" for the year, Gov. Ed Rendell said Thursday, suspending at least temporarily what has been the state Capitol's most hotly contested debate in recent months.
The Democratic governor issued a news release that blamed legislative Republicans for what he described as their refusal to negotiate in good faith.
"Their clear unwillingness to change their previous proposal or to resolve differences with the House Democrats and with my administration makes it obvious that they have killed the severance tax in this legislative session," Rendell said.
He said the failure to enact a tax on drilling in the Marcellus Formation will harm the environment, make it harder for local governments to deal with the impact of drilling and cause the state government financial problems.
Pennsylvania is the only state with significant natural gas production that does not tax it.
The governor had tried to jump-start talks this week by seeking written counterproposals from House and Senate leaders of both parties. He said the response by Republican leaders did not produce a reasonable compromise on the tax rate, one of many aspects of the idea that has been disputed.
Spokesman Erik Arneson said Senate Republicans were surprised by Rendell's decision to end negotiations and said they are willing to continue talks.
Issues such as tax revenue distribution, zoning and limits on where gas companies may drill in coal regions "cannot logically be separated from the issue of imposing a reasonable severance tax," Arneson said.
