Shale Tax Earmark Suggested

A policy center is backing Governor Ed Rendell's proposal for a severance tax on Marcellus Shale gas extractions-but the Pennsylvania Budget and Policy Center wants a share of the profits to go toward local governments and environmental protection. Rendell says 5% tax on wellhead values and a 4.7-cent levy on every thousand cubic feet of extracted gas could bring in $107 million I the next fiscal year. Critics say that will kill the fledgling gas industry before it even gets established in the commonwealth, but Pennsylvania Budget and Policy Center executive director Sharon Ward disagrees. “There is really no evidence at all that a severance tax will kill the industry. In fact, there is credible evidence from other states that have looked precisely at this issue that the tax has little impact on production,” says Ward. Currently Rendell wants all the funds to go to the state’s general fund but Ward says a portion should help offset county property taxes. She says some should also be earmarked for Shale-related environmental oversight and upkeep.