Osche joins opposition to natural gas tax Commissioner, industry against Wolf plan
Butler County Commissioner Leslie Osche joined an Allegheny County councilman and natural gas and oil industry representatives in a conference call Friday to explain their opposition to Gov. Tom Wolf's “Restore Pennsylvania” proposal.
The proposal Wolf unveiled in January would add a severance tax, based on the amount of gas extracted, on top of the impact fee that drillers already pay.
Wolf said the tax would generate $450 billion over four years for transportation capital projects, blight removal, contamination remediation, high-speed Internet access expansion, infrastructure to assist gas industry businesses, and other projects.
Osche agreed that the state needs to find a better way to pay for road and bridge improvement projects, but the county puts impact fee revenue to good use and she doesn't want to risk losing that money.
“There's no question the state has issues with transportation infrastructure — roads and bridges,” Osche said.
The county has used impact fee money to upgrade the 911 emergency dispatch system and create the infrastructure bank, and the money has been used for grant matches and to leverage other funding, she said.
Impact fee money, Osche said, will be used to pay for new election voting machines that are mandated by the state.
“We stand to lose those impact fees. The governor said we won't, but we could,” Osche said, adding that drillers have paved roads that might not have been touched without them.
“The shale producers are already investing in infrastructure and water systems across the state. They've invested in the (Butler County) community college. They've repaved may roads,” she said.
The county received $2.1 million from impact fees last year and the amount is expected to be higher this year, Osche said.
Commissioner Kevin Boozel, the minority Democratic commissioner, didn't participate in the conference call, but said he hasn't yet formed an opinion on the Democrat Gov. Wolf's proposal.
Boozel said he has asked many sources and is still waiting for answers to questions he has about the plan.
Boozel said he supports the impact fee, but he wants to compare the volume of gas extracted in Pennsylvania to the volumes from other states and compare the amount taxes and fees drillers pay. A big question, he said, is whether the impact fee and severance tax would make the amount drillers pay in Pennsylvania higher than what they pay in other states.
“Would the tax and impact fee be higher than other states? I don't know if it will be higher with the added tax. I keep asking for data, data, data, but I'm not getting answers,” Boozel said. “I haven't made a determination. I want what's best for Butler County and the rest of Pennsylvania.”
If the tax is imposed, it won't drive drillers away from the state, he said.
Sam DeMarco, an Allegheny County councilman, said the severance tax was devised as a means to provide money for a variety of projects and the tax would hurt an industry that is spurring the economy.
Allegheny County has received more than $13 million in revenue from impact fees over the years, and that money has been used for stormwater management projects, extending the Montour Trail, the Bakery Square project in Pittsburgh and many municipal projects such as renovating Crafton's swimming pool.
Some impact fee revenue is also going toward the $1.3 billion renovation at the Pittsburgh International Airport, he said.
“Unemployment is 3.8 percent in Pittsburgh and Allegheny County. That's the lowest it's been since they started recording in 1976. All of our building trades are busy and looking for more people. An additional tax that could impact this industry that has been so beneficial to Western Pennsylvania could have a negative impact on that,” DeMarco said. “Any increase will be passed on to consumers including low income (residents) and senior citizens. It will not be helpful.”
Imposing the tax in addition to the fee could cause drillers to leave the state, he said.
Nicholas Haden of Reserved Environmental Service, which treats drilling wastewater at plants locally in Penn Township and in New Stanton in Westmoreland County, said he finds it ironic that the gas industry has invested billions of dollars in the state without asking for incentives while the state offered Amazon $4.6 billion to locate a corporate headquarters in state.
In addition, trade unions have invested millions in apprenticeship programs to train people to work in the gas industry including the Steamfitters union, which built a training facility in Butler County, he said.
Assessing a severance tax, he said, could jeopardize those investments by driving the gas industry away.
“What do we do when the investment from the gas companies goes away?” Haden said.
