Governor Ed Rendell has given up hope a natural gas severance tax will be passed into law while he’s still in office.
Rendell says the tax on natural gas extraction from the Marcellus Shale formation in Pennsylvania is “clearly dead” in 2010, since Senate and House leaders have failed to make any headway in negotiations.
Press Secretary Gary Tuma faults Senate Republican leaders for sticking to a tax rate of 1.5 percent, which would eventually increase to five percent after five years.
Tuma says the Republicans’ rate is unacceptable.
"They simply came back and reiterated their same position. They did not budge from that position at all. So that makes it clear that they are not negotiating in good faith. They are not negotiating at all. They are simply saying it’s our way or the highway."
Senate Republicans are also insisting the House re-pass a severance tax bill before the election – an action House Democratic leaders have ruled out.
Erik Arneson, a spokeman for Senate President Pro Tem Joe Scarnati says they didn't expect this announcement...
"It took us by surprise, and we hope he will reconsider it. We are certainly willing to negotiate Marcellus Shale issues, and thought our letter made it clear the framework from which we wanted to do that."
If the bill doesn’t pass this year, the Rendell Administration will need to cut an additional 70 million dollars from the state budget.
Democrat Dan Onorato would support a severance tax next year if he becomes governor, but Republican Tom Corbett says the issue is off the table.