Issue Spotlight: Pennsylvania's Natural Gas Impact Fee
In 2012, Pennsylvania enacted an “impact fee” on natural gas wells drilled into Pennsylvania’s Marcellus Shale that generates a relatively small amount of revenue from the expanding gas industry. PBPC estimates that, using a “moderate” production scenario, Pennsylvania's impact fee will bring in less revenue than a severance tax comparable to that of Texas or West Virginia. As production increases over time, the gap grows larger between the revenue generated at the West Virginia or Texas tax rates and from Pennsylvania’s impact fee.
In his budget address, Governor Wolf observed that Pennsylvania faces a choice of two paths. Taking one path would require us to deal with the reality of our structural deficit and raise revenues to close it. It would enable government to continue to meet its responsibilities to educate our children, serve those who need our help, protect the environment and encourage economic growth. Taking the other path would require us to accept devastating cuts to education and health and human services.
Gov. Tom Wolf presented his 2016-17 State Budget Proposal on February 9th. The Pennsylvania Budget and Policy Center will be posting analysis, infographics and related documents on this page as they become available. Check back often for the latest updates.
In a democracy, public policy is ideally made after extensive public deliberation and debate. Deals made in private and announced at the last minute make it impossible for citizens to understand and evaluate the actions of their legislators or for advocates to mobilize citizen opinion on the critical issues of the day. Unfortunately, the last few days have given us two striking examples of the failure to live up to this fundamental democratic norm.
State budget discussions have reached a critical point. The agreed-upon $350 million increase in education funding represents an important step towards the budget Pennsylvania needs. But while the latest proposal to extend the sales tax to more services would raise needed revenues, it would also place too much of the burden on Pennsylvania’s lowest-income families.
Even at the the 11th hour, lawmakers can achieve a better budget – one that reinvests in education and human services, raises adequate revenues in a fairer way, and strengthens families and communities. The Pennsylvania Budget and Policy Center calls on lawmakers to include the following eight proposals in a final budget fit for the holidays.
Over the past 48 hours, news report have trickled out about a tentative budget agreement between Republican legislative leaders and the Wolf Administration. Lacking the information for a full analysis, we will instead lay out criteria for evaluating any budget deal; assess what the early information indicates about the likelihood of this tentative budget agreement meeting these criteria; and suggest how the negotiators might improve the budget framework as they further develop its details.