Corbett Will Allow Marcellus Shale Fees, Still Technically Not Raising Taxes (Updated)
Governor Tom Corbett has a plan, folks.
After all the Librul Hysteria over fracking and the “fire water” it may or may not produce, the governor seems to be stepping back from his hard line “No taxes” pledge and today proposed an optional fee on Marcellus Shale wells. But that doesn’t mean he’s going to be the one imposing the taxes fees. He’s putting it off onto the counties in which the rock is penetrated.
According to an Associated Press report, the governor is set to put out a large plan for natural gas drilling today. A briefing sheet releaed by the Administration says counties can impose their own fees on drilling companies (just don’t call it a tax), “of no more than $40,000 per well in a well’s first year.” The price would decline to $30,000 the second year, $20,000 the third, $10,000 the fourth through tenth years.
This could generate up to $120 million in the first full year and $195 million by the sixth. Most of the money raised would stay in the community, though about 25 percent would be sent off to the state for environmental protection and other infrastructure-y projects. Much of the money, it’s thought, will be spent on the environmental damage done to the land by fracking. Many conservatives and those in the industry contend fracking does not inflict the long-term damage on land naysayers say it does.
Pennsylvania is the only state that doesn’t tax production on natural gas. Or the STDs their workers potentially spread—though to be fair, STDs aren’t really taxed anywhere.
We reached out to the Commonwealth Foundation, a libertarian think tank in Harrisburg, for their assessment on this fee idea. “We like the framework of it,” says Nate Benefield, Director of Policy and Analysis at the Foundation. “It’s optional for local governments and counties to propose it. It’s restrictive about how high they can go, but there’s no minimum level. They can set the fee according to what they assess is the impact of local levels, and there’s no arbitrary number.”
He says the proposal is consistent with free market ideals, since it’s localized and optional.
The Pennsylvania Democratic Party, on the other hand, is disappointed with the proposal.
“The impact that the governor put forward is really limited,” says Mark Nicastre, Pennsylvania Democratic Party spokesman. “It’s the absolute basement for what he could have presented and the way that he did it…the fee assessed county-by-county, really doesn’t address the issue that the state has with the Marcellus drilling which is really a statewide issue, not a county-by-county issue.”
Nicastre says his party would have much rather seen a severance tax, which, he says, 60-70 percent of state residents support. “This is…the absolute minimum that the governor could have put forward,” he says.
Tom Corbett was one of the originators of this right wing “pledge” idea this political cycle, when he pledged not to raise taxes as governor. He’s so far held onto that pledge, though admitted during the 2010 election that taxes and fees are not the same thing.
Image: Think Progress