October 18, 2017
Central Penn Business Journal
A proposed severance tax on natural-gas drilling in Pennsylvania cleared the House Finance Committee today on a 16-9 vote, setting up a possible floor vote next week.
Gov. Tom Wolf called the proposal, known as House Bill 1401, a "fair and commonsense proposal" that would help address the commonwealth's structural budget deficit.
The Pennsylvania Chamber of Business and Industry blasted the idea, saying it would put Pennsylvania at a competitive disadvantage to other states.
It comes as the governor and lawmaker have been floating a range of solutions to pay for spending already approved in the state's 2017-18 budget.
Under the bill from Bucks County Rep. Gene DiGirolamo, a 3.2 percent tax would be levied on natural-gas drillers. That would be on top of an existing impact fee. When combined, the impact fee and severance tax would equal about 5 percent of the value of natural gas sold, according to the proposal.
Pennsylvania is the second-largest producer of natural gas in the country and is the only state that does not impose a severance tax.
Projections suggest the tax proposal would raise $350 million to $400 million per year, according to WITF.
The House has scheduled session days on Monday, Tuesday and Wednesday next week.