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Lawmaker to propose Marcellus Shale tax to raise $ for schools

State Sen. Vincent Hughes wants to generate $375 million for school districts by imposing a 5 percent tax on natural-gas drilling.

A recent photo from Cabot’s 10-well pad site in Auburn Township, Pa., where the company has set new production records.  (Ken Childress Photography/ Cabot Oil and Gas)
A recent photo from Cabot’s 10-well pad site in Auburn Township, Pa., where the company has set new production records. (Ken Childress Photography/ Cabot Oil and Gas)Read more

A STATE lawmaker from Philadelphia said he has a plan to generate $375 million for local school districts without costing taxpayers a dime.

Sen. Vincent Hughes, minority chairman of the Appropriations Committee, said yesterday that he would introduce legislation to impose a 5-percent severance tax on natural-gas drilling in the state's Marcellus Shale region. By 2020, Hughes said, the tax would generate more than $1 billion for education.

"Given the status of what's going on in our schools, we need a much more aggressive funding plan put in place," Hughes told the Daily News.

He is scheduled to announce the legislation today at a rally outside the Philadelphia School District's headquarters.

According to Hughes, the tax would generate about $720 million in 2014-15, of which $375 million would go to schools. More than half of that would go toward local school districts, $195 million would be directed to economic development and $150 million would go to environmental uses in the first year. As natural-gas revenues rise, so would the money for education, but the amount for economic development and the environment would remain flat.

Hughes said the money set aside for education would include reinstating the charter-school-reimbursement line item eliminated by the Corbett administration and provide money for a new basic-education funding formula.

The proposal, along with a plan outlined by Senate Democrats last month to raise an additional $300 million for education, would give Philadelphia schools an extra $236 million next year, he said.

Although the plan likely will face an uphill battle in the Republican-controlled Legislature, two other Democrats in the Senate - John Yudichak, of Carbon County, and Judy Schwank, of Berks County - are on board with it.

"[I support] this proposal because it is a common-sense solution to several large problems that have plagued Pennsylvania for the past few years," a Schwank spokesman said. "Taxing Marcellus Shale drillers is overwhelmingly supported by Pennsylvania residents, and similar levies in three dozen other states have not . . . hurt their economies."

Pennsylvania was the second-largest gas-producing state in the country, according to preliminary 2013 data, but is the only one among the top 11 gas-producing states that does not tax the industry. The state does have an impact fee, which generated about $202 million in 2012.

A spokesman for Senate Majority Leader Dominic Pileggi, R-Delaware County, did not return a request for comment.

Asked about the likelihood of his proposal being approved, Hughes answered indirectly.

"I think that's going to be in many respects up to the public to make a determination on," he said. "It is vitally important that the broader community speak up about this need."