Within the next decade, Pennsylvania is poised to enjoy a natural gas development boom. Long-term projections of rising natural gas prices and the advent of advanced drilling techniques have made it economically feasible to extract natural gas from the Marcellus Shale, a deep geologic formation that underlies 54 of the 67 counties of Pennsylvania.
Pennsylvania has a long history of supplying the nation with natural gas that provides energy for cooking, heating, and other important uses. Only Texas has more currently active wells.
The Pennsylvania General Assembly is drafting legislation to institute a severance tax on the natural gas extracted from the Marcellus Shale formation. The state budget for Fiscal Year 2010-11 set a deadline of October 1, 2010 for enactment of a severance tax that would take effect in January 2011. No revenue from the tax was included in the final budget agreement.
People and businesses contribute to public services in the state, to police, fire protection, schools, roads, clean water, and all the things we need. We pay taxes. We pay income and sales taxes and businesses pay business taxes.
Virtually every state in the nation with mineral resources, including natural gas, oil, coal, and even sand, collects revenue from the companies that extract these finite resources. Severance taxes provide these states with an important source of funding for investments in education, colleges, transportation, and other infrastructure that help to build a strong economy.
This report explores how revenue from a fracking tax could bolster vital public services if it is not used to finance income tax cuts that would mostly benefit wealthy Ohioans, as Gov. John Kasich has proposed. The Ohio General Assembly should consider an adequate tax on oil and gas extraction to help restore local jobs, schools and services and assist communities impacted by drilling.