OVER THE next few weeks, counties across the state – including Luzerne County – must decide whether to adopt a limited impact fee on the Marcellus Shale natural gas industry. For counties with little drilling – such as Luzerne – the embarrassingly low impact fee, loss of local control and weak environmental protections is a terrible deal. With another year of deep state budget cuts likely, local taxpayers could feel it, too.
Luzerne County has only two nongas-producing wells and would get only about $22,600 this year from the impact fee. Every dollar helps, but that will not address the industry's real impacts on our communities.
When Gov. Tom Corbett and Republicans controlling the Legislature negotiated the bill – now Act 13 – they focused almost entirely on the counties with extensive drilling. They ignored the consequences to Luzerne County, where pipelines and natural gas compressor stations will be built and the damage to our roads and bridges from thousands of industry trucks will be realized.
The law actually makes the impacts here worse by stripping most of the zoning power from local officials to place reasonable limits on the industry. That means municipalities have little ability to determine where pipelines and natural gas compressor stations, such as one proposed by Chief Gathering LLC near a Dallas School District complex, are built.
When Gov. Corbett signed Act 13 in February, oil and gas company executives must have been popping champagne bottles. The industry's lobbying in Harrisburg paid off with an ineffective tax rate of less than 1 percent per well, the lowest rate of every major gas-producing state in the country.
Hardworking Pennsylvanians pay more than double the tax rate in personal income tax and the same companies, including Exxon, Chevron and BP, pay a severance tax of 7.5 percent in Texas, 7 percent in Oklahoma and 5.8 percent in West Virginia.
This law isn't in the best interests of taxpayers. We should have passed a severance tax that's competitive with other states and used the additional revenue for needs statewide. Instead, the law basically gave corporate welfare to some of the most profitable companies in the world at the same time the Corbett administration is proposing more cuts to schools, higher education and the health safety net.
If the governor's latest budget proposal is enacted, state funding for the average classroom of 25 students in the Wilkes-Barre Area and Hanover Area school districts will have been cut by $13,000 over the last two years. Our state universities and state-related schools, such as Penn State University and Temple University, would be cut 40 to 50 percent over that time.
Continuing those tremendous budget cuts could force more local property tax hikes, teacher layoffs and more students paying fees for sports and other activates. Higher tuition bills would leave thousands of college students to choose between racking up more debt and ending their dreams of a college education.
Counties and local taxpayers should never have been put in this position. The governor and Republicans controlling the Legislature should have passed a reasonable tax that is fair to the industry and public. The industry can afford it.
When Exxon announced a $9.4 billion profit in just the fourth-quarter last year, a company vice president said, "We remain bullish on the future of natural gas as an energy source," adding that natural gas "will play the dominant role going forward."
I guess that's little comfort when a senior citizen gets a property tax bill, a second-grade classroom gets more crowded or a college student won't be able to afford to finish school this year. This Marcellus Shale law is a wasted opportunity. The people of Pennsylvania deserved better and they should demand that the governor change this law to make it fair to the people and the gas industry.