PA’s New Tax on Drilling (er Sorry, Impact Fee)

The new Marcellus drilling legislation passed by the Pennsylvania House and Senate (both controlled by Republicans), and due to be signed by Gov. Tom Corbett (also a Republican) is a great milestone. It places new restrictions on drilling and makes regulation of drilling across the state more even-handed. There are many things to like about the new legislation.

But it’s also a disappointment. The so-called impact fee is really just a tax trying to fly under the radar as a fee. Why a tax? Because the fee as originally proposed would stay in the areas where drilling happens, where drilling is having an “impact.” If a municipality has to repair roads, or spend more on emergency services and policing, or hire extra workers in government offices—that extra expense should be reimbursed. That’s what an impact fee is supposed to do.

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