PA Gov. Corbett’s Budget Chief Explains Why PA Does Not Need a Marcellus Shale Gas Severance Tax

The budget battle in Pennsylvania has heated up. One of the biggest controversies has to do with PA’s lack of a severance tax on gas drilling in the state. Gov. Tom Corbett’s recently unveiled budget does not include a severance tax, which has been the focus of many who oppose the newly elected administration. Corbett’s Revenue Secretary-designate Dan Meuser had sharp exchanges at a budget hearing Monday on the proposed new budget, and offered the administration’s rationale on why a severance tax is not needed in PA:

Rep. Greg Vitali, D-Havertown, said it was indefensible for the governor to oppose a severance tax on natural gas production and yet propose steep cuts for basic and higher education. Vitali recently introduced new legislation to levy a severance tax.

Meuser said that natural gas firms pay millions of dollars in state corporate and sales taxes. He said the industry makes an indirect contribution to state revenues through royalties and bonus fees to landowners who lease tracts for drilling. These landowners in turn pay a state personal income tax reflecting those payments.

Those doubting the industry’s contributions should visit the drilling boom region in Northeastern Pennsylvania, Meuser said.

"Those counties are booming," he said. "Bradford and Susquehanna have the lowest unemployment in the state by far."

*The Citizen’s Voice (Mar 15, 2011) – Meuser defends lack of natural gas drilling tax