Once again in his budget, Governor Ed Rendell is proposing a severance tax on natural gas removed from the Marcellus Shale formation. The Rendell budget for fiscal 2010-11 counts on $160 million in revenue from the severance tax with some of that money going to environmental protection efforts. Opponents in the state senate blocked action on the tax last year saying it would harm a new industry.
Now, a Democratic state senator who supports the severance tax wants most of the revenues designated for property tax relief for homeowners. Senator Andy Dinniman of Chester County says his bill would set aside $50 million of the projected $160 million in revenues for local governments and communities affected by the drilling ($22 million); the Environmental Stewardship Fund ($22 million); and $3 million apiece for the Fish and Boat Commission and the Game Commission. However, he wants the bulk of the revenues to go towards reducing real estate taxes rather than the state's general fund.
Dinniman projects that by 2014 revenues from the Marcellus Shale tax could reduce the average annual property tax bill by nearly $150.
Dinniman says every other major natural gas producing state imposes a severance tax on that natural gas.
Meantime, Republican State Representative Jim Christiana of Beaver County will conduct an information event on Marcellus Shale drilling in Aliquippa today. Christiana will be joined by several industry experts.