During Drilling “Downturn” PA Local Govts Still Reap Econ Benefits

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One of the loudest, most persistent arguments by Democrats (and RINOs) in Pennsylvania in favor of a severance tax is that the existing impact fee (actually, better called an impact “tax”) have decreased over time because of a decrease in the number of new wells drilled due to the downturn in the market. There are two gigantic problems with their argument: (1) the impact tax has turned around, and is rising again (see IFO Predicts PA Impact Fees for 2017 Will Soar, Near Record High); and (2) a new study by environmental think tank Resources for the Future finds that even during the “downturn years,” the most heavily drilled shale states (including PA) saw an increase in revenue to local governments. Although impact tax revenue may fluctuate up and down, on average townships in PA now have more revenue because of shale than they did prior to the Marcellus revolution. Although the oil and gas industry has always been a “boom and bust” industry, and will remain so, it now appears the highs will not be as high and the lows not as low as they once were. Below is a full copy of “Local Fiscal Effects of a Drilling Downturn: Local Government Impacts of Decreased Oil and Gas Activity in Five US Shale Regions”…

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