State lawmakers should return to pass fair gas extraction tax
It's probably too much to expect, but Pennsylvania's politicians should quit playing politics over a natural gas extraction tax.
While some legitimate political differences might exist between Democrats and Republicans on the tax issue, it's foolish for Pennsylvania to be the only state in the Marcellus Shale gas region to not benefit from an extraction tax.
Gov. Ed Rendell, who has been pushing for an extraction tax, declared the effort dead this week after legislative leaders in the state House of Representatives and Senate failed to produce a compromise tax plan.
Senate Republican leader Joe Scarnati says the tax rate first proposed by Rendell was too high, as was the tax plan proposed and passed by House Democrats.
Rendell and Democrats counter that Scarnati and Senate Republicans proposed a tax rate that was so low that it amounted to a giveaway to the gas industry, which has spent millions of dollars in campaign donations and lobbying efforts, benefiting mostly Republicans.
The stalemate over an extraction tax is another example of Pennsylvania's dysfunctional state government.
Finding a compromise tax plan should not be difficult, since both sides know that a reasonable tax rate would bring additional revenue to the state, as well as funding for environmental projects and money for road repairs directly linked to drilling operations. Also, since gas extraction taxes are being paid by gas drillers in other, neighboring states, it's clear that a tax plan in line with other states in the Marcellus region would not cause an exodus of drillers from Pennsylvania.
But politics as usual in Harrisburg means the reasonable thing won't be done, or if it is, it will not be done quickly.
A gas extraction tax has been discussed in Harrisburg for two years already. But despite the time for study of a fair gas extraction tax and long debate, lawmakers failed to find a compromise solution by Oct. 1, their self-imposed deadline.
Rendell has said he would like to see a renewed effort following the Nov. 2 election, but Republican leadership in the Senate is rejecting the idea.
This week, some encouraging news was found in the actions of five Republican state senators from the eastern part of the state who sent a letter to Scarnati urging a resolution to the gas tax issue during a "lame duck" session between the election and the end of November.
Given the budget crisis facing Pennsylvania, it's foolish to miss out on a reasonable tax that other states are already collecting. The increasing flow of campaign money from natural gas interests to politicians — including Tom Corbett, Republican candidate for governor — raises doubts about those opposed to a middle-of-the-pack gas-extraction tax.
The Marcellus Shale gas industry offers huge potential economic benefits for Pennsylvania, with an estimated 200,000 jobs possible, plus royalties and income taxes. Still, there is no reason for Pennsylvania to remain the only state out of the top-15 gas-producing states to not have an extraction tax.
Experiences in other states suggest the importance of reasonable environmental regulations and also the need for some tax revenue to be directed to the repair of roads damaged by heavy truck traffic associated with drilling operations.
State lawmakers should quit playing games and settle on a compromise extraction tax plan that considers environmental concerns, impact expenses and state budget needs, but without imposing a tax that is so burdensome that it drives gas drilling out of the state.
By failing to pass a compromise gas extraction tax, state lawmakers continue to demonstrate their incompetence and preference for politics over doing their jobs. Though lame duck sessions should generally be avoided, this year state lawmakers should return to Harrisburg after the election to pass a natural gas extraction tax.
There's no reason for failure on a gas tax other than politics as usual — and Pennsylvania voters have seen more than enough of that.
