Severance Tax Will Protect Pennsylvania Taxpayers

A well-structured severance tax on natural gas production will protect Pennsylvania taxpayers from shouldering the public costs that come with increased drilling, according to a PBPC report.

"Natural gas extraction in the Marcellus Shale has substantial risks and substantial costs that have not yet been fully explored in the rush to drill,” said Sharon Ward, Director of the non-partisan policy research center. “A severance tax is a well-tested mechanism to shift these costs back to producers, where they belong.”

The report, “Responsible Growth: Protecting the Public Interest with a Natural Gas Severance Tax,” examines the potential costs of increased natural gas drilling on taxpayers and the environment, how severance taxes are structured in other states, and what lessons Pennsylvania can learn from them. It was released at a Capitol press conference on April 28.

THE REPORT: Access the full report here.

REPORT SUMMARY: Access a four-page summary of the report here.

SEVERANCE TAX RATES: Access a table detailing natural gas severance tax rates in other states.

PRESS RELEASE: Access a press release on the report here.

MEDIA COVERAGE: View news reports citing PBPC's severance tax report.

MARCELLUS SHALE FORUM: View video from a January 19, 2010 forum on natural gas drilling in the Marcellus Shale.

ADDITIONAL RESOURCES:

• Shared Costs, Shared Resources: State Distribution of Severance Tax Revenues, June 2009
• Over 70% of Marcellus Shale Wells Will be Subject to 3.07% Personal Income Tax – Not the Corporate Net Income Tax, June 2009
• Reality Check: Natural Gas Industry Report Falsely Claims Sky Will Fall if Severance Tax Enacted, October 2009

TESTIMONY: Access testimony on the severance tax proposal delivered on April 3 by PBPC Research Director Michael Wood to the House Appropriations Committee's Subcommittee on Fiscal Policy.

VIDEO: View a video of the Capitol Press Conference where the severance tax paper was discussed.

AUDIO: Listen below to a conference call on the severance tax paper, featuring PBPC Director Sharon Ward; Research Director Michael Wood; Dan Fisher, Superintendent of the Bald Eagle Area School District in Centre County; and Norm Hatten, Superintendent of the Curwensville Area School District in Clearfield County.