Senate Democrats Propose 8% Severance Tax, Only 10% For Environment

Senators Art Haywood (D-Montgomery) and Vincent J. Hughes (D-Philadelphia) Thursday announced legislation to impose an 8 percent tax on Marcellus Shale gas along with the 1.9 percent impact fee.

Joined by Sen. Larry Farnese (D-Philadelphia), Haywood and Hughes said most of the revenue, which could reach nearly $2 billion a year within a few years, will go toward public education, the underfunded pension liability and environmental protection.

“When many of our most critical programs are underfunded, yet we have an abundance of natural resources, what we really have is a compassion deficit,” Sen. Haywood said. “As one of the top producers of natural gas in the nation, it is time to join a vast majority of gas-producing states and enact a shale tax that strengthens our shared future.”

Sen. Hughes, Minority Chair of the Senate Appropriations Chairman, said the bill could generate more than $1 billion for next year’s budget.

From the revenue raised in the proposal:

— $100 million dollars would go to the Growing Greener Program;

— 60 percent of the money would go to fund Public Schools; and

— 40 percent would go towards reducing the unfunded pension liability.

“The policy of the last four years is no longer acceptable and Pennsylvanians have made that abundantly clear in recent months,” Sen. Hughes said. “A fresh start for our state begins with a system of taxation that is fair, sustainable and accountable to the people.”

In addition to the tax, the bill would retain a 1.9 percent impact fee in order to continue payments to local governments affected by the drilling.

Sen. Haywood said the most critical need for the funding is public education.

“With the second highest shale production in the country, there is no reason our schools should lack basic resources, while extraction goes untaxed. We cannot allow industry to invest in our state without investing in our children’s future,” he said.

Jerry Jordan, President of the Philadelphia Federation of Teachers joined the senators at the conference in support of the proposal, stressing the need for increased funding in a district where some schools no longer have the resources to teach subjects that are crucial for state exams.

Judith Grant, a teacher at Spring Garden Elementary School, said that in the current underfunded state “teachers have to reach into our own pockets to provide resources for our students. There is a difference between providing something extra and providing basic necessities like pencils and paper.”

Cheltenham Township School Board Director Bill England also spoke in support of the proposal, saying it is “an opportunity to move our state forward" from one of the lowest in the nation for school funding.

“Deteriorating public schools and short-funded pensions are two dark clouds that hang over young Pennsylvanians and we owe it to them to make sure we don’t pass them on,” Sen. Hughes said. “It’s time to step up and make the tough decisions that will ensure opportunity for every child in every school in every school district.”