Americans for Tax Reform comes out against Joe Scarnati’s “local impact fee” for natural gas drilling:
For the last two years former Pennsylvania Gov. Ed Rendell worked tirelessly to impose a new tax on natural gas extraction in the Marcellus Shale. While Rendell left office empty-handed, lawmakers in Harrisburg are back with a new proposal to tax one of the most promising sectors of the Keystone State economy. The game plan this year: just don’t call it a tax.
SB 1100, introduced last week by Sen. Joe Scarnati – who was the Senate field marshal for Rendell’s push for a severance tax last year, would impose $10,000 per wellhead “impact fee” on drilling operations in the Marcellus Shale.
Call it what you like, SB 1100 is a tax by any objective assessment. A large portion of the money derived from this new levy would go to localities where no drilling is occurring.
This is a significant development because the chief virtue of the local impact fee for someone like Tom Corbett, who signed ATR’s ridiculous No Tax Pledge, was that it’s nominally not a tax. But now Grover Norquist is saying he’ll score it as voting for a tax increase, so lots of Republicans are going to have to back away from any form of Marcellus Shale tax. If it’s all the same to Norquist, that means there’s no real point now in going with the local fees over a statewide severance tax. Looking past the political word games, the severance tax is clearly the better policy on the merits.