Severance Tax on Marcellus Shale Natural Gas
28, 2014- Howard Ondick
COUNTY- Senate Democratic plan for a fair and reasonable severance tax on the
Marcellus Shale natural gas industry in the commonwealth has been unveiled.
John Yudichak of Luzerne County, unveiled the plan at a news conference yesterday
at the Northeast Pennsylvania Industrial Resource Center (NEPIRC) in Hanover
Township, Luzerne County.
Yudichak today joined local leaders in education, environmental protection and
business to unveil details of a plan to enact fair and reasonable severance tax
proposal on the Marcellus shale industry.
“In order to fully capitalize on the benefits
of the Marcellus shale industry, we must have a comprehensive economic strategy
in place – and that strategy needs to include a fair and reasonable severance
tax,” Yudichak said. “Fair taxes mean better jobs, better education and better
environmental protection; and a severance tax would level the playing field for
all Pennsylvania businesses to grow along with the Marcellus shale industry and
ensure that we do not have to make drastic budget cuts to important state programs
plan would levy a new 5% tax on the extraction of Marcellus shale gas and the
revenue generated by the tax would be used to fund education, protect the
environment and stimulate the economy. It is estimated that the severance tax
would generate $720 million in the first year alone.
Under the proposal, education would receive
the largest share of the revenue generated by the severance tax, with $375
million in FY 2014-15, growing to $453 million in FY 2015-16, and more than $1
billion by 2020 dedicated to education funding. All annual increases in tax and
fee collections after FY 2015-16 would be dedicated to fund education.
$195 million of the revenue in FY 2014-15, and $250 million every year after
that, would be used to fund DCED programs; make infrastructure investments;
fund local economic development projects and implement new tax reduction
incentives to improve the local business climate.
proposal would also make significant investments in environmental protection
with $75 million dedicated to Growing Greener programs and $75 million
dedicated to replace the administration’s plan to allow Marcellus drilling near
state parks and forest land in FY 2014-15. In FY 2015-16 and every year
thereafter, the proposal would allocate $120 million for Growing Greener
programs and $30 million for other environmental programs.
addition to Senator Yudichak, Senator Judy Schwank of Berks County announced
the plan at a news conference today in Reading and Senate Democratic
Appropriations Committee Chairman Vincent Hughes of Philadelphia announced the
plan at a rally at the Philadelphia School District Administration Building.