FOR IMMEDIATE RELEASE
State Rep. Greg Vitali
Southeastern Pa. lawmakers call for drilling tax
HARRISBURG, May 11 – State Rep. Greg Vitali, D-Delaware, today joined several southeastern Pennsylvania lawmakers at a Capitol news conference to call on the General Assembly to enact a reasonable Marcellus Shale natural gas drilling tax that would benefit all Pennsylvanians.
"It's an absolute slap in the face of the citizens of Pennsylvania when we are asking them to suffer cuts in basic education, higher education and health care and we are not going to tax these wealthy drillers like other states," Vitali said. "It's an outrage."
The lawmakers pointed out that the four largest natural gas producing states have a drilling tax. Last year, Texas collected $1.7 billion, Oklahoma collected $743 million, Wyoming collected $721 million and New Mexico took in $654 million.
Neighboring West Virginia, which has a drilling tax rate of about 6 percent of the value of the gas, collected $417 million. Vitali's legislation, H.B. 33, would impose a tax rate slightly less than West Virginia's rate.
Vitali noted that drilling companies doing business in Pennsylvania had large gross profits last year. He said Anadarko made $9.1 billion, EQG made $5 billion and Talisman Energy made $4.9 billion.
The lawmakers said other tax proposals put forth fall short of what Pennsylvania should do. Sen. Joseph Scarnati, R-Jefferson, has proposed a local impact fee requiring gas drillers to pay up to $25,000 a year on a well.
"Under this weak plan, gas drillers essentially pay for one week's worth of product and profit the rest of the year," said state Sen. Michael Stack, D-Phila. "That's a drop in the bucket."
The money would stay in communities where drilling takes place, and Erika Staaf from PennEnvironment said that's not acceptable.
"We all live downstream," Staaf said. "Pollution does not stop at municipal and county borders."
Lawmakers noted money generated by a tax on the state's casinos and red light camera enforcement in Philadelphia is shared across the state.
Vitali said a proposal by state Rep. Kate Harper, R-Montgomery, would tax drillers at 1.5 percent of the value of the gas for the first five years of the legislation. Vitali said that rate is too low to generate revenue to help fund important environmental programs, help local communities deal with impacts of drilling and fill deep cuts proposed in the budget. He said Texas imposes a 7.5 percent tax, Oklahoma a 7 percent tax and Wyoming a 6 percent tax on gas drillers.