HARRISBURG – State Senate Democrats today responded to Governor Tom Corbett’s Marcellus Shale Impact Fee proposal.
State Senate Democratic Leader Jay Costa (D-Allegheny) said he was heartened by the governor’s focus on job creation, but the plan falls short.
“The governor said we must move quickly in order to make sure Pennsylvania creates jobs,” Costa said. “Senate Democrats have been arguing for months that creating jobs for Pennsylvanians must be the number one priority for this fall’s session of the General Assembly. We’ve also been waiting months for an energy policy from the administration. We’d be the first to argue we must move. Let’s do so responsibly.”
“I am very concerned by the way money is being allocated for transportation. As I have said repeatedly in the past, road repairs have been and should remain the responsibility of the drilling companies. Imposing an impact fee shouldn’t relieve them of this responsibility.”
“The utter lack of funds going toward environmental protection is also a concern. This meager amount, layered on budget reductions which have already been imposed on the agency tasked with protecting Pennsylvania while this industry grows at breakneck pace, is severely lacking. We only get one shot at this – and if we don’t protect our water and our land, then we have learned nothing from our history.”
25% of fee revenue would be allocated statewide under the governor’s plan. Of that, the governor seeks to channel only 10.5% of that to the Department of Environmental Protection. Corbett’s proposal would direct the money to the restricted account for plugging of abandoned and orphaned oil and gas legacy wells and administration of enforcement of oil and gas program and other permits related to natural gas development.
“While I respect the governor for finally recognizing that job creation must be our top priority and for bringing job training into the public discussion, we need to be clear on one thing: all Pennsylvanians must benefit .” said Senate Democratic Appropriations Chairman, Vincent Hughes (D-Philadelphia/Montgomery). “That doesn’t happen under the governor’s proposed plan. There was entirely too much focus on the industry, and what the industry needs to create jobs. The governor said today that Pennsylvania is sitting on the second largest energy reserve in the country. The gas companies aren’t going anywhere.”
“We also need to look closely at this plan as it pertains to transportation. We can’t let these multi-million dollar companies forego their obligation to repair the wear-and-tear on roads and infrastructure just because an impact fee has been imposed, and PennDOT is getting some of this money.”
The governor’s impact fee proposal would send 75% of fee revenue to local municipalities where drilling occurs. It is expected to generate $120 million in the first year. If so, Pennsylvania’s Department of Transportation would get $21 million; DEP $3.15million; and counties $32.4 million.
Senate Environmental Resource and Energy Committee Democratic Chairman John Yudichak (D-Luzerne/Monroe/Carbon) warned of the potential unintended consequences of allocating the majority of revenue to counties to distribute to local host and surrounding municipalities.
“The governor’s county-assessed fee approach will create a fragmented patch work of ’have and have-not’ communities across Pennsylvania. It completely overlooks countless communities across Pennsylvania that have road, water system, and other infrastructure demands placed upon them.” said Yudichak.
“We do not apply this type of ‘point of origin’ revenue standard to any other industry whether its gaming, landfills or our corporate tax structure. If the governor truly believes in this industry’s potential to create jobs and revitalize our economy, he must realize we need a strong statewide job’s policy — not a limited county-by-county jobs policy. How can you develop a secondary markets for natural gas in Pennsylvania like power generation and natural gas vehicles if the bulk of the money only goes to those counties that host a Marcellus Shale rig?”
Yudichak added that he was pleased that the governor singled out community colleges and other state-related and state-system universities for their vital role in developing the industry and preparing Pennsylvanian’s workforce.
“I hope when all is said and done, we do indeed see a very active role from these institutions. They took a big hit in this year’s budget, but their importance to our economy is greater than ever. As the natural gas industry grows, they should grow and benefit as well. They have been and will continue to be willing partners.”
“If there’s one thing we must continue to support aggressively, it is education and job-training,” said Hughes. “In the end, it comes down to creating a ready, willing, and able workforce.”
“The well-being of Pennsylvania workers, Pennsylvania unions, and our communities as a whole is what’s important. That is why I am pleased to see the governor putting jobs on the front burner. Now we need to sit down and work together to make sure we reap the economic rewards in a prudent way that protects our natural resources. We want our children and grandchildren to be able to enjoy prosperity in Pennsylvania for years to come.”
Editor’s note:
The Democrats’ job creation plan includes renewed investment in job-producing programs and public works such as water and sewer projects as well as money for new business investments. The plan also provides a new round of capital infusion for the state Machinery and Equipment Loan Fund and would establish Pennsylvania’s version of the successful “Georgia Works” on-the-job training program.
The Pennsylvania Investment Bank would target more than $1.2 billion for water and sewer system reconstruction, new business investment and other public works. The bank would capture funds generated from existing borrowing capacity. The bank would use $500 million in Commonwealth Finance Authority dollars plus a half-billion from PENNVEST (Pennsylvania Infrastructure Investment Authority).
The investment bank would also utilize $80 million in funds from a proposed Marcellus Shale tax or fee along with surplus state revenues. Democrats estimate that these sources would generate $180 million.
Pennsylvania’s unemployment rate spiked by nearly a half percent from July to August – rising to 8.2 percent. Since May, the number of unemployed Pennsylvanians grew by 45,000.