Challenge To Use Of Oil & Gas Fund Monies To Be Heard By PA Supreme Court March 9

On March 9 the PA Supreme Court will hear an appeal of a 2015 Commonwealth Court decision upholding the right of the General Assembly and the governor to transfer monies from DCNR’s Oil and Gas Fund to the General Fund and the use of those funds for DCNR State Park and State Forest Operations.

The PA Environmental Defense Foundation filed the original lawsuit against Gov. Rendell for his leasing of nearly 137,000 acres of State Forest land for Marcellus Shale natural gas drilling and then transferring $383 million of the proceeds from the Oil and Gas Fund to the General Fund to balance the state budget.

Gov. Rendell also used Oil and Gas Fund revenue to fund administrative and personnel costs of State Parks and State Forest Operations.  The practice continued during the Corbett Administration.

PEDF based its lawsuit, in part, on Pennsylvania’s Environmental Rights Amendment to the state Constitution.

With the makeup of the PA Supreme Court now dramatically changed as a result of the November 3 election, it will be interesting to see how the Court decides this issue.

The PA Supreme Court’s 2013 decision overturning portions of the Act 13 drilling law was based, again in part, on the Environmental Rights Amendment.  The new court, with new members, may be more sympathetic to that argument.

On Wednesday, the Independent Fiscal Office released its economic outlook and state revenue forecast that highlighted projected revenue going into the Oil and Gas Lease Fund is expected to drop 38 percent in the current FY 2015-16 to $71 million from $115 million last fiscal year (page 46).  Revenues will increase slowly in the coming years and not recover to $118 million until FY 2018-19 (page 73).

In FY 2014-15 the Oil and Gas Lease Fund supported $122.6 million in operating costs and the General Fund only $14.5 million.  In FY 2008-09 the General Fund support for DCNR was $113 million and Oil and Gas Lease Fund revenue $11.8 million, nearly the reverse.

Gov. Wolf's proposed last year to begin the process of weaning DCNR off of the Oil and Gas Lease Fund to pay for administrative costs with a $21.8 million General Fund appropriation. His proposal was included in the Republican budget passed in December and signed into law by the Governor with $48.7 million more in General Fund money for DCNR's General Government, State Parks and State Forest Operations line items.

For updates on the progress of the lawsuit, visit the PA Environmental Defense Foundation website.  Click Here to sign up for regular news from PEDF.

For more information on drilling, visit DCNR’s Natural Gas Development and State Forests webpage.