Resist urge to misspend gas impact fee revenue
There’s a good reason why we call it an impact fee — the money Pennsylvania collects from natural gas companies for each well they maintain.
Gas producers will pay about $202 million in impact fees this year for new and existing wells in the state. Producers paid $2 million more in 2012 — there are more wells now, but state Act 13, the legislation that established the impact fee, tied it to the price of natural gas, and production increases in the past year have pumped up the supply of gas and lowered the price.
Act 13 was enacted in anticipation of new wealth arising from technology that enables drillers to access the Marcellus Shale, a gas-rich rock formation lying deep below most of Pennsylvania.
Every county in Pennsylvania gets a share of this wealth, as do most municipalities. Butler County officials learned last week they will receive about $1.1 million to spend in 2014 — a significant increase over the $741,351 collected in 2011 for the county’s current budget year. Municipalities in the county will share another $1.8 million.
Act 13 stipulates the money should be spent repairing wear and tear brought on by the increased drilling activity. As the name “impact fee” implies, it’s supposed to offset negative impacts of the gas industry, such as damage to roads and bridges. It’s not to be confused with revenue from gas industry employees’ incomes, the taxes they pay on their incomes or the commerce generated in Pennsylvania by the gas industry and its employees.
The impact fees are specifically to negate the impact of increased gas drilling.
However, the county has designated most of its impact fee revenue for other expenses. The largest portion, $250,000, will offset some of the deficit of the Sunnyview Nursing and Rehabilitation Center. Another $50,000 will pay for judicial services; and $101,351 is designated for the capital reserve fund.
While other shares of the money will go for justifiable expenses, such as improving emergency response systems and the county’s capital improvement fund, it’s hard to justify spending portions of it to balance budgets for the courts or nursing home. This is risky business if it continues another year or two.
County Controller Jack McMillin cautioned the county not to grow dependent on the impact fee as a permanent revenue stream, saying, “We just want to guard against wasting what is a temporary resource.”
That’s good advice for the county commissioners to follow.
