The Impact Fee Debate, Previewed

The debate over whether or not to impose an impact fee on nat­ural gas drillers will likely dom­i­nate the state Capi­tol, when law­mak­ers return to Har­ris­burg next month.

We’re already halfway through August, so the AP has this handy “back to school primer” on what to expect when the fall ses­sion begins:

HARRISBURG — The sub­ject of fair­ness — always a ques­tion in tax pol­icy — inevitably will sur­face as part of the debate when the Leg­is­la­ture tries again this fall to impose a levy on Pennsylvania’s boom­ing nat­ural gas industry.

Nat­ural gas pro­duc­ers don’t pay a tax on pro­duc­tion in Penn­syl­va­nia, although they do in every other major gas-producing state. The coal indus­try in Penn­syl­va­nia pays a prop­erty tax based on pro­duc­tion value to coun­ties, munic­i­pal­i­ties and school dis­tricts — as well as a fed­eral sev­er­ance tax.

For now, Penn­syl­va­nia has one of the low­est tax bur­dens in the coun­try for the indus­try, which is spend­ing bil­lions of dol­lars to tap thou­sands of wells into the Mar­cel­lus shale for­ma­tion, con­sid­ered the nation’s largest nat­ural gas reservoir.

Col­orado and Texas have the heav­i­est tax bur­dens, impos­ing a prop­erty tax on the value of oil and nat­ural gas — gen­er­at­ing about $2 bil­lion a year in Texas — as a way to address the local impact of drilling. In Texas, a sep­a­rate state sev­er­ance tax on gas and oil raised almost as much in the 2010 fis­cal year. Col­orado has a con­ser­va­tion tax and a sev­er­ance tax.