Four Key Things to Watch in Governor Corbett’s Budget Address

Scott Detrow / StateIm­pact Pennsylvania

Gov­er­nor Cor­bett announces his impact fee plan, in October

In last year’s bud­get address Gov­er­nor Tom Cor­bett promised to make Penn­syl­va­nia the “Texas of the nat­ural gas boom.” That hasn’t hap­pened yet.

A year later, gas prices have con­tin­ued to plunge, partly due to a glut cre­ated by the shale boom, and partly due to mild win­ter weather. Sev­eral gas com­pa­nies, like Chesa­peake Energy, have announced scal­ing back on nat­ural gas pro­duc­tion. And fore­cast­ers, such as the U.S. Geo­log­i­cal Sur­vey and the Energy Infor­ma­tion Agency, have reduced the amount of recov­er­able nat­ural gas they think lies beneath Pennsylvania.

The governor’s speech likely won’t even be the main event of the day, when it comes to drilling. The Sen­ate and House are expected to pass a nat­ural gas impact fee today, after more than a year of debat­ing the issue. (More than three years, if you count the back-and-forth over whether or not to impose a sev­er­ance tax, which began to heat up in 2009.)

Still, the governor’s bud­get address sets the leg­isla­tive agenda for the year, so here are four things to watch for:

1) Lean times for the state’s cof­fers mean likely bud­get cuts for envi­ron­men­tal pro­grams. The Depart­ment of Envi­ron­men­tal Pro­tec­tion and the Depart­ment of Con­ser­va­tion and Nat­ural Resources are two likely places to trim. Envi­ron­men­tal­ists say they’re lean enough. So big sav­ings may have to come from some­where else in the bud­get. But with school dis­tricts across the state on the brink of bank­ruptcy, don’t count on any bud­get increases for forests, state parks, and wildlife protection.

2) Dur­ing his cam­paign for office, Cor­bett said he’d be will­ing to lift the mora­to­rium Demo­c­rat Ed Ren­dell placed on leas­ing out addi­tional state for­est land for drilling. But it hasn’t hap­pened yet. Some envi­ron­men­tal­ists worry it could be in his new bud­get. Oth­ers who have actu­ally seen the bud­get say there’s no plan to reverse the mora­to­rium. Cor­bett may be wait­ing for higher gas prices in order to max­i­mize the rev­enue. Pen­n­Fu­ture and other envi­ron­men­tal groups have del­uged the Gov­er­nor with a let­ter cam­paign against lift­ing the mora­to­rium. Pen­n­Fu­ture CEO Jan Jar­rett opposes leas­ing the for­est at all, but adds that doing so now would amount to a “fire sale.” Although the highly unpop­u­lar move may not be men­tioned in Corbett’s speech, look to see if it’s in the fine print under rev­enue projections.

3) The envi­ron­men­tal restora­tion fund Grow­ing Greener is all but bank­rupt. The impact fee would direct $20 to $30 mil­lion in leas­ing rev­enue into the Envi­ron­men­tal Stew­ard­ship Fund each year, begin­ning in 2013. But Grow­ing Greener has become a skele­ton of its for­mer self when it was estab­lished ten years ago under then gov­er­nor Tom Ridge.

4) Rev­enue pro­jec­tions from per­mit fees. More than 3000 Mar­cel­lus wells have been drilled since the boom began in 2005. One glimpse into the future may be what the Cor­bett Admin­is­tra­tion expects from the shale rush.