Commission Report Sets The Stage For Fall Impact Fee Debate

Scott Detrow / StateIm­pact Pennsylvania

Jim Caw­ley and Patrick Hen­der­son speak to reporters after a July com­mis­sion meeting

Gov­er­nor Corbett’s Mar­cel­lus Shale Advi­sory Com­mis­sion is rec­om­mend­ing an impact fee on drillers, to com­pen­sate local gov­ern­ment for the strain on ser­vices caused by Pennsylvania’s nat­ural gas drilling boom.

Leg­isla­tive reac­tion to the report’s lan­guage has been muted, at best. Many law­mak­ers say the sug­ges­tion doesn’t go far enough.

(Read the full report here.)

Still, the doc­u­ment will likely play a major role in whether or not an impact fee becomes law this year.

• Broad­cast Report: Com­mis­sion Report Will Set Terms For Impact FeeStateImpact’s Scott Detrow on what hap­pens next for the pro­posed impact feeDown­load

The report is 137 pages. It’s divided into ten sec­tions, with 39 sub-sections, and most impor­tantly, 96 rec­om­men­da­tions for new laws, reg­u­la­tions, or approaches to drilling.

And it landed in the Gen­eral Assem­bly with a thud.

You’d think the recep­tion would have been different.

A grow­ing num­ber of law­mak­ers from both par­ties are des­per­ate to pass some sort of tax or fee on nat­ural gas drillers, and the commission’s green light was seen as the final hur­dle to get­ting a bill passed.

But the report’s impact fee lan­guage had most fee sup­port­ers rolling their eyes.

They’re voic­ing two big prob­lems. The first, as Sen­ate Demo­c­rat John Yudichak explained, was the commission’s rec­om­men­da­tion fee rev­enue stay within com­mu­ni­ties host­ing drillers, instead of going into any statewide funds aimed at pro­tect­ing the envi­ron­ment or clean­ing up water­ways. “That can­not be effec­tive at all,” he said. “I don’t think it’s prac­ti­cal. I don’t think it rec­og­nizes real­ity on the ground. And I don’t think it’s pos­si­ble that that can get past the Gen­eral Assembly.”

And mem­bers of both par­ties scratched their heads at this line: “Any fee should include a cor­re­la­tion between the amount of the fee and costs incurred.”

“How do you quan­tify a stream that is going to be pol­luted, but we’re not going to find out about it for 20 years? How do you quan­tify that?” asked Yudichak.

But like it or not, law­mak­ers will need to work within the commission’s parameters.

That’s because Gov­er­nor Cor­bett — the guy who signs the bills into law — has been clear he’ll heed the panel’s rec­om­men­da­tions, on whether or not to sup­port a fee.

Cor­bett has been stead­fast in that mind­set. He sin­gle­hand­edly stopped a fee bill from mov­ing through the leg­is­la­ture in June, by threat­ing to veto any fee that reached his desk before the report came out.

And the gov­er­nor is against a broader tax. He doesn’t want to slow down the growth of an indus­try putting peo­ple back to work, as he explained dur­ing an April speech. “ Those are peo­ple back on the employ­ment rolls,” he said dur­ing an appear­ance before the State Town­ship Super­vi­sors Asso­ci­a­tion. “Those are peo­ple that, if they were on wel­fare they can be off wel­fare now. That we won’t be spend­ing tax dol­lars on. Those are peo­ple that have salaries that will pay income taxes. That will go and buy goods, and pay sales taxes. And the peo­ple who sell them the goods now have jobs that are growing.”

Cor­bett is also deter­mined to keep his “no new taxes” pledge. The dif­fer­ence between a tax and fee is in the eye of the beholder, but Corbett’s staffers have warned they’d con­sider a bill send­ing money to the state gov­ern­ment a vio­la­tion of the promise.

We’ll have to wait a bit longer to hear Corbett’s reac­tion. Advi­sors say he won’t pub­licly weigh in on the report until August, at the ear­li­est. The admin­is­tra­tion will spend the next few weeks digest­ing the report and map­ping out its shale strategy.

A grow­ing num­ber of Repub­li­can polit­i­cal strate­gists now see some sort of impact fee as inevitable, given the fact 7 in 10 vot­ers are in favor of a levy.

Sen­ate Repub­li­can lead­ers are eager to pass a bill by year’s end. Their House coun­ter­parts are vague on the issue, but a grow­ing num­ber of their rank-and-file mem­bers want to get a mea­sure passed.

The GOP can’t expect much help from Democ­rats who don’t rep­re­sent drilling dis­tricts. The minor­ity party’s lead­ers want to keep push­ing for a broader tax, and then make the lack of a levy a major cam­paign issue, espe­cially in light of this year’s bil­lion dol­lar bud­get cuts.

August is the slow­est month of the year for the Gen­eral Assem­bly, and law­mak­ers won’t return to Har­ris­burg until Sep­tem­ber. But when the House and Sen­ate recon­vene this fall, you can expect the impact fee debate to be front and center.