PA IFO Predicts 2 Possible Scenarios for 2020 Impact Tax Revenue

The Pennsylvania Independent Fiscal Office (IFO) does a good job of guesstimating how much impact fee revenue will get generated in the coming year, based on permit and producing wells activity in the current year. Impact fees are PA’s equivalent of a severance tax–a fee paid by drillers for each new well they drill, paid over a 15-year period. This year IFO is offering up two scenarios for how much money the state will receive in impact fee revenues next year (based on wells drilled and active this year). One scenario is based on natgas prices averaging at least $2.25/MMBtus (million British Thermal Units) on the NYMEX, and the other scenario assumes gas prices slip below that level.

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