The fifteenth anniversary of the establishment of Pennsylvania’s natural gas impact fee is quickly coming upon us. And as a member of Governor Corbett’s Marcellus Shale Advisory Commission, I can speak firsthand to the intense forethought, debate, and work that went into creating our state’s unique assessment of the natural gas industry.
This Commission was charged with the challenging task of striking the delicate balance between ensuring the Commonwealth — and more importantly it’s citizens — received a benefit from the development of our natural resources under our feet while simultaneously creating an environment that encouraged the industry to grow and firmly establish operations within our state.
At that time, there was a loud contingent that pushed for a severance tax to help Pennsylvania’s budgetary woes. That same contingent looked to the natural gas industry as a never-ending revenue stream to fund pie in the sky programs and an ever growing state budget. However, the Commission knew that this option was shortsighted and not a sound strategy to promote long-term economic growth.
The Commission provided 96 recommendations to the Governor’s office and legislature. One of those recommendations was an Impact Fee — which was passed by the General Assembly and Act 13 was signed into law in 2012. Along with stricter environmental standards, this Impact Fee is in fact a tax assessed on the shale gas industry. And this money gets distributed annually into every county in the state.
Now, nearly fifteen years after it was established, the natural gas Impact Fee is a model for a fair and transparent taxation of an industry. Since it was implemented, it has generated nearly $3 billion for the citizens in our Commonwealth. These funds have been used by local governments to pay for community projects, infrastructure upgrades, green space enhancements and community improvements just to name a few. The Impact Fee is a success story and will continue to bring much needed revenues to local governments for decades to come.
For some elected officials in Harrisburg who continue to say that the shale industry doesn’t pay any tax or their fair share is simply untruthful and absurd. Keep in mind that this Impact Fee is an addition to every other Pennsylvania tax that all corporations and businesses are obligated to pay in our Commonwealth every single year.
I suggest that these elected officials read the Marcellus Shale Advisory Commission’s report and fully read the Act 13 legislation. After that I recommend a sit down meeting with the PA PUC to understand how these fees are collected and distributed throughout the Commonwealth every year. Ignorance is no excuse for espousing nonsense. And oh by the way and for the good of the order, the PA PUC recently announced that the natural gas Impact Fees for the year 2025 totaled $244 MM.