Bucks GOP lawmaker wants to tax gas drilling

HARRISBURG Breaking ranks with his conservative colleagues, a Bucks County Republican on Thursday said he planned to introduce a bill to impose a tax on natural gas drilling.

Rep. Gene DiGirolamo's legislation would enact a 4.9 percent tax on the value of natural gas extracted and sold from state wells, potentially generating close to $640 million for the state next year.

"It's going to be a tough budget year," DiGirolamo said. "There is an awful lot of need."

Democrats for years have been lobbying unsuccessfully in the GOP-controlled legislature for a severance tax on drilling in the Marcellus Shale.

Gov. Corbett supported the smaller "impact fee" approved in 2012, but has opposed a tax, which other natural-gas-producing states have imposed.

Corbett's top energy adviser said gas companies have paid the state $2 billion in corporate, income, and other taxes since 2008.

"Gov. Corbett is focused on helping to create more jobs for Pennsylvanians, not more taxes that discourage job creation," said Patrick Henderson.

DiGirolamo said he thinks the topic is worthy of discussion by the legislature. He said he wants to protect the $237 million now going to counties and municipalities under the impact fee.

There has been no natural gas drilling in Bucks County, but the county does receive a small amount from the fees.

The additional $400 million would be divvied up within the state's general fund, with the largest piece - 40 percent - for education and the rest set aside for the environment, parks, solar energy, and health and human services.

DiGirolamo said the total impact fee, paid over 15 years, would amount to less than 2 percent of the value of the natural gas sold from the well. "Our proposal, like that of so many other states, is to tax the value of the natural gas produced," he wrote in his memo seeking cosponsors for the bill.

DiGirolamo said the tax is lower than virtually all of those in the other gas-producing states, including neighboring West Virginia, which has a 5 percent gas tax.

Some gas companies have threatened to leave Pennsylvania if a drilling tax was imposed. Henderson said they would seek out a "more favorable business climate."

DiGirolamo doubts that would occur. "I think the industry is thriving here, and it looks to me that the gas deposits in Pennsylvania are incredible," he said. "This is a reasonable tax, and it's the right thing to do."